The fate of four federal tax breaks for low-income families — all set to expire Jan. 1 unless renewed by Congress — will ultimately be decided with November's presidential election.
If allowed to expire, that will mean tax bill increases for many poor families nationwide and in Louisiana, according to nonprofit Louisiana Budget Project.
The credits set to expire are the products of George W. Bush's Tax Relief Reconciliation Act and President Barack Obama's 2010 Tax Relief Act. They include The Child Tax Credit, Earned Income Tax Credit, Child and Dependent Care Credit and the American Opportunity Credit.
Roberton Wiliiams, a senior fellow at the Tax Policy Center, tells CNNMoney that failing to renew the credits will mean tax bill increases ranging from hundreds to thousands of dollars, even for poor families.
"If you have what it takes to qualify for these particular benefits, you will get hit," says Williams.
According to CNNMoney, allowing all four of the credits to expire will mean:
Some families will take a hit on several fronts if they qualify for more than one tax break. A low-income couple with three kids, for example, will lose as much as $1,500 from expiring provisions of the Child Tax Credit. If their income is low enough, they could also see a smaller refund from the Earned Income Tax Credit, and benefits from the Child and Dependent Care Credit could be reduced as well.
As noted by CNNMoney, the fate of renewing these credits will hinge on re-electing Obama:
The upcoming presidential election has left the fate of these tax breaks uncertain. Democrats and Republicans in Congress continue to butt heads about which tax cuts should be extended, and there's virtually no chance they will agree on a specific plan before the November election, Williams said.
Even if an agreement is reached by the end of the year — which is far from a sure thing, either — next year's tax policy will ultimately depend on who takes over the Oval Office.
Click here for CNNMoney's breakdown on how low-income American families will be impacted by the expiration of each of the four credits.
MAY 17 Here's a column from James Gill, this time in the Advocate. Gill, who has jumped ship from the Picayune, writes about the absurdity of dueling polls in this post. The numbers are so wildly different, it is obvious that both sides are "cooking the books," he writes. In particular, he looks at Sen. Mary Landrieu, and how her recent actions in DC have been received by those polled. Gill's acerbic, amusing prose is a welcome addition to a paper so conservative as to be occasionally lacking in personality.
MAY 17 Blogger Tom Aswell continues delivering bombshells about the state education department and Gov. Jindal's education "reform" efforts. In this post, he reports that students in the Shreveport area have been signed up for a charter school without their knowledge or consent. Most interesting to Aswell is how this Texas-based charter (with ties to GOP types) got the personal student information it has, if the students didn't give it.
MAY 17 This post by JR Ball in the Baton Rouge Business Report is an interesting tongue-in-cheek look at recent Baton Rouge economic development efforts. Among the items he examines is the idea that gaining a Costco makes BR a "world-class city." (Really? All you need is a different brand of Sam's? MK!) This effort, and other recent ones, are all built on the taxpayer's back, with tax zones, tax incentives and tax rebates, Ball writes.
MAY 17 Blogger CB Forgotston is critical of the legislature's reliance on a revenue-estimating committee's decision to include projected tax amnesty income in this year's forecast. That's a problem, CB posts, because the deadline for these people to pay their taxes is June 30, 2014. So when do you think these people who haven't paid taxes in years are going to pay their taxes? Surely not before June 30, and that means the money won't be there for this year's budget, he argues.
MAY 17 Here's an interesting blog out of California by a Hollywood writer, attorney and academic named Brian Alan Lane. He blogs about higher ed, and was a whistle-blower in a scandal over false credentials. In this post, he takes aim at LSU's new top dog, King Alexander. It's convoluted and a little confusing, but it sure makes Alexander a lot more interesting than he was yesterday.
MAY 17 Blogger Robert Mann writes about the LSU Board's refusal to allow Dr. Fred Cerise to testify before the legislature about Gov. Jindal's plan to close down all the state's charity hospitals and dump the poor on the private system. It's hard to imagine anyone more qualified than Cerise to testify about that, so why would anyone try to prevent him doing so? Mann thinks it is because the powers that be aren't interested in hearing any truth about the plan.
MAY 17 This post on the Louisiana Sinkhole Bugle, a blog that notes developments in the Bayou Corne and Jefferson Island salt domes, talks about a proposed expansion of the salt dome storage under Lake Peigneur in Iberia Parish. Residents are working against it for several reasons, including two biggies: the sinkhole disaster in Bayou Corne and the continuing, unexplained bubbling on the surface of the Lake.
MAY 17 NOLA police arrested more people Thursday accused of either being involved in the Mother's Day shooting or hiding the suspect afterward, this Gambit story reports. The NOLA police chief said he suspects the whole thing was gang-related and throws out a challenge to the gangs: he's got informants now, he says, and he knows a lot more than the gangs want him to know. The people who live in the neighborhoods terrorized by gangs are ready to talk, he says.
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It doesn't matter for the low income earners who wins the election in this case. The Democrats will let the tax cuts expire, but also raise tax rates for the higher income earners, like when Clinton was in office!
The Republicans would like to lower income tax rates, remove tax deductions, and spread the base.
Walter, with the various deductions available to me as a small business owner, my effective tax rate is around 16%. If the Republicans get elected and do what Romney says he wants to do, I will be paying around 25%. If the Democrats get elected, I will be paying around 16-17%.
If the Democrats want to raise tax revenue and get a job, then they should vote Republican!