Washington — The House of Representatives on Thursday overwhelmingly approved a boost in the child tax credit as part of a family-friendly tax bill that would cost $400 billion over 10 years.
The legislation, which passed 282-144, would increase the child tax credit from $500 to $600 on income earned this year. That means taxpayers with children would see the extra cash a year from now, when they file tax returns for the year 2001. That would amount to nearly $10 billion in immediate tax relief for families with children a more generous plan than President Bush proposed because it provides these tax breaks faster.
The measure next heads to the Senate, where it faces an uncertain fate. The chamber is evenly divided between Republican and Democrats, and has yet to pass any portion of President Bush's 10-year, $1.6 trillion tax cut proposal.
All House Republicans who voted were joined by 64 Democrats, including Kansas Rep. Dennis Moore, in supporting the family tax bill. It also would eliminate the so-called marriage penalty, a feature of the tax code that forces married couples to pay more than they would if they filed as singles.
"This is not simply a matter of more tax relief. This is a matter of fair tax relief," said House Speaker Dennis Hastert, R-Ill.
Democrats proposed a substitute measure that would have given individual income taxpayers an immediate $300 rebate, and married couples a $600 rebate, but it was rejected 240-194.
The legislation that passed gives married couples double the standard deduction available to single filers, which for 2001 is $4,550. That means a couple could deduct $9,100 from their income before figuring their taxes, up from the $7,600 they can deduct now.
Another major change is an expansion of the lowest, 15 percent bracket. The first $45,200 in income for a couple is now taxed at 15 percent.
With the change, the first $54,100 would be taxed at the low rate. For a single, the first $27,050 is taxed at that rate.
Many House Democrats opposed the House bill because in addition to wiping out the marriage penalty, it in effect would award some couples a "marriage bonus" by giving them more favorable tax treatment than if they filed singly.
Married couples in which one spouse stays home generally would get the bonus.
Both the House and Bush versions double the per child tax credit from $500 to $1,000, phased in over six years. However, the House would make the first increment retroactive to Jan. 1, 2001, in an effort to speed some relief to taxpayers this year to counter the weakening economy.
The idea of immediate tax cuts is getting a larger following by the day on Capitol Hill. But there is one major hitch. Republicans want to tie the quick tax cut to Bush's overall plan, and Democrats don't.
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