House Republicans Pass Bill to Lower Taxes on the Rich and Raise Taxes on the Poor

by onepercenttakers · August 5, 2014

So what are Republicans in the House of Representatives up to these days? According to Danny Vinik, they just passed a bill that would reduce taxes on the rich and raise them on the poor. I know, I know: you're shocked. But in a way, I think this whole episode is even worse than Vinik makes it sound. Here's the background: The child tax credit reduces your income tax by $1,000 for each child you have. It phases out for upper middle-income folks, but—and this is the key point—it phases out differently for singles and couples. The way the numbers sort out, it treats singles better than couples. This is the dreaded "marriage penalty," which is bad because we want to encourage people to get married, not discourage them. So what did House Republicans do? Naturally, they raised the phase-out threshold for married couples so that well-off couples would get a higher benefit. They didn't have to do this, of course. They could have lowered the benefit for singles instead. Or they could have jiggled the numbers so that everyone got equal benefits but the overall result was revenue neutral.
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So what are Republicans in the House of Representatives up to these days? According to Danny Vinik, they just passed a bill that would reduce taxes on the rich and raise them on the poor. I know, I know: you’re shocked. But in a way, I think this whole episode is even worse than Vinik makes it sound. Here’s the background: The child tax credit reduces your income tax by $1,000 for each child you have. It phases out for upper middle-income folks, but—and this is the key point—it phases out differently for singles and couples. The way the numbers sort out, it treats singles better than couples. This is the dreaded “marriage penalty,” which is bad because we want to encourage people to get married, not discourage them. So what did House Republicans do? Naturally, they raised the phase-out threshold for married couples so that well-off couples would get a higher benefit. They didn’t have to do this, of course. They could have lowered the benefit for singles instead. Or they could have jiggled the numbers so that everyone got equal benefits but the overall result was revenue neutral.