Sending a Clear Message: Hispanics Need Not Apply

May 28, 2004 By Jon Garrido — To obtain necessary Senate votes for passage of the tax cut, a $350 Billion ceiling was agreed to sending the Senate tax bill to a conference committee where a last minute revision was approved by House and Senate leaders that will prevent millions of minimum-wage Hispanic families from receiving the increased child credit originally approved in the Senate.

Where tax writers spent days trying to cram many tax cuts — most prominently, cuts in the taxes on stock dividends and capital gains — into a bill that the Senate said could not be larger than $350 billion, the tax writers chose to eliminate millions of minimum wage Hispanic families from receiving the increased child credit.

The tax writers were free to reduce the dividend tax cut but those that pay dividend taxes are members of a large White constituency with strong advocates in the White House and Congress.

Not so with minimum wage families with Hispanics being the largest population among this group of families.

Most taxpayers will receive a $400-a-child check in the mail this summer as a result of the law, which raises the child tax credit, to $1,000 from $600. It had been clear from the beginning the wealthiest families would not receive the credit, which is intended to phase out at high incomes.

A different group of families will not benefit from the $400 increase — Hispanic families who make just above the minimum wage.

Because of the formula for calculating the credit, most families with incomes from $10,500 to $26,625 will not benefit. Those families include 11.9 million children or one of every six children under 17.

Hispanic families with incomes lower than $10,500 will also not receive the refund checks. But under the 2001 tax revision, they would not have been eligible for either the $600 or the $1,000 credits because they do not pay federal taxes.

Proposals to give Hispanic families the credits failed on the House and Senate floors on party-line votes.

Don't these members of Congress who voted no want Hispanic votes in 2004? But then they think hosting a party with a few Mariachis will win them Hispanic support. Shame on Hispanics who sell their souls for a little recognition.

At least the Senate provision that did pass was intended to help Hispanic families making $10,500 to $26,625 who do pay federal taxes and could have taken all or part of the $600 credit. The provision, which would have cost $3.5 billion, would have allowed those Hispanic families to receive some or all of the extra $400 in the new law.

Several centrist senators worked hard to make the child credit fully refundable for all low income families, and the full Senate voted this month to include a provision that would have included the minimum-wage families.

A spokeswoman for the Republicans on the House Ways and Means Committee, Christin Tinsworth, noted that the provision was included in an agreement reached last week by Representative Bill Thomas, Republican of California, the committee chairman, and Senator Charles E. Grassley, Republican of Iowa, chairman of the Senate Finance Committee.

That agreement would have cost $380 billion, but it fell apart when an important swing senator, George V. Voinovich, Republican of Ohio, said he could not approve any bill that exceeded $350 billion. To satisfy him and the Senate, the child credit provision was dropped.

The Republican demand for large cuts in the dividend tax which benefits primarily wealthy taxpayers pushed away the credit from low income Hispanic families.

The conclusion: Wealthy taxpayers have more value than low income Hispanic families.

The lesson: Sending a clear message: Hispanics have no representation in Washington.