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In Wake of Hurricanes: Child Tax Credit leaves out blacks & Latinos; Bankruptcy law favors the rich
by Amee Chew
November 2005
In 2001, President Bush doubled a Child Tax Credit, boasting that the tax cut would aid low-income households. The credit allows families to reduce their federal income tax by $1,000 per year for each child they have. After Hurricane Katrina, Congress is reconsidering expanding this Child Tax Credit.
As it turns out, our federal government's largest child subsidy leaves out over a quarter of all children! The Child Tax Credit leaves out half of black children and nearly half of Hispanic children, because it works through the tax code. The tax credit does not apply to families with incomes over $110,000 or under $11,000, missing many households that don't pay federal taxes. Tellingly, because Mississippi and Louisiana rank among the poorest states, the children seeing the least benefit from the tax credit are also from these states.
The subsidy offered by the Child Tax Credit is worth over $46 billlion this year -- but let's put that in the perspective of our $400 billion military budget.
Meanwhile, the "Bankruptcy Abuse Prevention and Consumer Protection Act," which went into effect in October, adds financial barriers to people seeking bankruptcy protection, while giving lenders and businesses new powers for recovering debts. Credit card companies are expected to reap billions of dollars in profit from the law. Research shows that after a natural disaster, bankruptcies take three years to peak, so the act is expected to have long-lasting effects on hurricane survivors.
Related Articles:
- UN Report: Parts of US as Poor as Third World
- Needs of Asian American Katrina evacuees
- Katrina: A Military Operation Against U.S. Citizens? New Orleans under siege
- Blacks in Need of Katrina Refugee Housing & Other People of Color
- Racist Coverage of Katrina, also how to help
