THE CHILD TAX CREDIT….TIME TO PAY THE PIPER….Since I don’t follow the minutiae of tax law and I don’t have kids, the following email that I received this morning was news to me:
This past Friday I got a letter from the IRS. Uh-oh; never a good thing. I open it to find that they’ve corrected my tax refund by $800 because of an “advance child tax credit” I received in 2003. So instead of an $864 refund, I’m getting only $64.
My initial reaction was, what the hell? I didn’t receive any advance child tax credit. Then it occurred to me: oh, yeah, I got that $800 check from the government last year. I called the IRS (who, by the way, was actually efficient and helpful) and they confirmed this for me. That check, sent out as part of Bush’s “tax cuts,” was really just an advance on tax monies I would have received anyway. I had forgotten about that check; I thought I had received it in 2002.
The thing is, Kevin, I knew the $800 check worked that way; there was a letter sent with it that said so. But, as I say, I had forgotten about it. I just wonder if there aren’t a lot of people out there who are going to get a similar letter from the IRS and who didn’t know about the fine print that came with the check (the attached letter notwithstanding). It’s going to be a rude awakening for people who, like me, forgot about that little “payday loan” and who are now learning that instead of getting a $400 refund, they owe Uncle Sam $400.
Just think: all that happened here was that his refund got cut. He’d probably really be pissed if, say, his $200 refund magically turned into a $600 payment.
As I recall, this advance tax credit was generally thought responsible for some portion of last year’s economic growth. If that’s the case, that should turn into a negative effect this year, right?
Even worse for the party in power, it’s just bad PR for lots of people to get IRS letters telling them they owe more taxes than they thought. It doesn’t seem like a good thing to be happening a few months before an election.
I wonder why the Bushies did it?
NOTE: I’m not saying this is bad policy, I’m just saying it doesn’t seem politically savvy. Even if it’s unfair, you don’t want taxpayers getting pissed off in an election year.
However, in comments BRussell says this was a Democratic idea. If that’s the case, who knows? Maybe it was a brilliant piece of opposition party jiu jitsu.