Saturday, February 01, 2003
Tax plan too pricey for families
It's easy to like President Bush's plan for stimulating the economy by expanding our income. Who wouldn't want a few extra dollars to help keep our ever-growing children in new sneakers and baloney sandwiches?
But look beyond the immediate rewards of a tax cut and there is a lot not to like. This seeming boon to families today could turn out to be a burden to our children tomorrow.
Here's how the Bush plan would affect the average Chicago Parent reader, a family with two children and an income of $60,000:
• The first $14,000 of income-now it's $12,000-would be taxed at 10 percent, resulting in $100 in annual tax savings.
• The "marriage penalty" would be eliminated, raising the personal deduction for a married couple to $9,500. That's another $233 annually.
• The child tax credit would be raised from $600 to $1,000 per child, giving this family an additional $800 in annual tax savings.
• The grand total in federal tax savings is $1,133 for this typical Chicago Parent reader, or $98.58 a month.
But at what cost?
President Bush claims his economic stimulus plan puts average Americans and families first. But these three tax breaks-the only ones aimed at working families-account for less than one-quarter of the $674 billion in federal revenue lost in the next 10 years as a result of the proposal. The biggest portion, $300 million, comes from ending the tax on stock dividends. This is likely to benefit only a handful of Chicago Parent readers since most middle-income families don't receive stock dividends unless they happen to have 401(k) or IRA retirement plans. Those dividends already are sheltered from tax.
This ill-advised plan would cost the federal government $954 billion if you include the interest we'll pay on the higher debt. It comes at a time when the budget deficit already is soaring, state budgets are starved for cash and the specter of war makes the future more uncertain than ever. How does all that affect families?
• A bigger deficit means that the government will pay more to borrow money.
• States must address huge budget gaps-about $5 billion in Illinois alone. Either the feds will bail them out, or states will collect that federal tax rebate from us in higher state taxes, better known as "user fees."
And then there is the cost of a possible war with Iraq. By one estimate, the price tag could hit $200 billion.
The president has couched his proposal as an economic stimulus plan and a benefit for working families. Rather, it is a crass political attempt to use the recession as a lever to achieve two long-coveted Republican Party goals: lowering taxes and ending the dividend tax.
We are not economists, but we know how to balance a budget. You don't spend money on extravagances when the rent is due. Likewise, the president should not be sending us $100 a month in the hope of ensuring his re-election in 2004 when the country faces some dire-and expensive-international challenges.
Make Valentine's Day sweet without sugar
We experienced one of those moments of parental enlightenment as we read what dietitian and mom Jodie Shield had to say about children and food in the November 2002 Chicago Parent: "One of the things I'm shocked at is what's happened at Valentine's Day," she says. "Is it really necessary to stick candy on the Valentines too? We need to look at ourselves as parents and ask what messages are we sending."
What message are we sending? And what message would we like to send?
There are lots of ways to help kids celebrate Valentine's Day, most of which would be more rewarding than giving them yet another dose of sugar. One of the most rewarding is to help them make their own Valentine cards to share with classmates. In ShortStuff, there is a suggestion on how to make cards-and memories-this Valentine's Day. It sounds easy enough, even for those of us who are craft-challenged.
The cards may not be as perfect as the boxed Britney Spears version on sale at the store. But they will be your child's imprint and it will send a new message to your kids: Valentine's Day is a special time to be together, not another reason to eat junk food.