Lawmakers vote in favor of preserving bottom tax bracket

Friday, May 14, 2004 | 10:29 a.m.

SUN STAFF AND WIRE REPORTS

WASHINGTON -- Having voted in favor of keeping tax cuts that show up in virtually every worker's paycheck, the House turns next to the child tax credit.

That credit is due to drop from $1,000 to $700 next year unless lawmakers act. Legislation dealing with the child tax credit would be the last in a series of bills preventing several popular tax cuts from expiring at the end of the year.

Rep. Jon Porter, R-Nev., introduced a bill Thursday to make the $1,000 child tax credit permanent.

"We are working to extend a tax cut next year by allowing American families to keep more of their hard-earned money," Porter said in a statement.

Congress increased the child tax credit from $500 to $1,000 as part of the 2001 and 2003 tax cuts offered by the Bush administration, according to Porter's office. Congress must authorize the credit to stay at the level or it will drop to $700 in 2005 and to $500 in 2011.

The House is expected to debate the bill next week.

The bills aimed at preserving expiring tax cuts have moved easily through the House and gained support from some Democrats, although many of them have voiced concerns about worsening budget deficits.

The House voted 344-76 Thursday to pass the tax bracket bill, which makes permanent the bottom bracket created in 2001, when the tax on the first $6,000 in earned wages was lowered from 15 percent to 10 percent. In 2003, Congress expanded the bracket to cover the first $7,000 earned.

Under current law, the bracket shrinks back to $6,000 next year and disappears entirely in 2011. Republicans said 73 million taxpayers can expect to pay higher taxes next year if the law isn't extended.

The House already has voted to preserve tax cuts for married couples and acted to ensure the alternative minimum tax doesn't claw back the tax cuts.

Sun reporter

Suzanne Struglinski and the Associated Press contributed to this story.