The dividend tax cut is the centerpiece of the Bush Administration's plan to dismantle and cut essential protections for children to pay for massive new tax cuts for the rich. In May, the House and Senate leadership agreed on a framework for a tax and spending package expected to include the dividend tax cut as a key element.
Millionaires would receive an average tax cut of nearly $30,000 each from eliminating the tax on stock dividends in 2004, according to the Urban Institute-Brookings Tax Policy Center.
But 94 percent of Latino children in America will gain nothing at all from the dividend tax cut because their families don't receive any stock dividends. Of the tiny number of Latino families with children who did have stock dividend income in 2001, the majority would have received an annual savings of less than $16 per child with a complete elimination of the dividend tax.
President Bush has promised in the past that his economic plan will help "turn our recovery into lasting growth and opportunity that reaches every corner of America." But as usual, the actual plan is one that leaves millions of corners - in fact, entire rooms, homes, and families - behind.
These numbers say the Bush Administration believes Latino children should subsidize tax breaks for the rich by sacrificing the health care, child care, education, after-school programs, jobs, and income they urgently need. Latino children are disproportionately concentrated in working poor families that rely on child care, health insurance, and other protections threatened by state and federal funding cuts - funding cuts that result in large part from the weak economy combined with ill-timed irresponsible tax cuts for the wealthy.
More than one in five Latino children live in working poor families that often lack needed child care assistance and one in four Latino children has no health insurance. The Children's Defense Fund also found earlier this year that long-term unemployment is spreading fastest in families with young children.
The Bush Administration claims its stock dividend tax cut plan will spur the economy, but ten Nobel Prize-winning economists noted that the Bush Administration's tax plan "is not the answer" to the recent surge in joblessness. Children from most racial and ethnic groups will lose more than they gain from the dividend tax cuts, but the disparities are especially striking for Latino children.
Latino children are less likely than Black or White Non-Latino children to receive dividend income and are more likely than Black or Non-Latino children to live in working poor families or have no health insurance.
It is shameful that the Bush Administration's irresponsible tax cuts for the rich leave behind almost all Latino children. The Administration's rhetorical mask of "compassionate conservatism" has been ripped off by one of the most uncompassionate and dangerous assaults on children in American history. It is irresponsible to borrow money we don't have to spend where it isn't needed while cutting and freezing services for children.
You don't need to be able to debate the technicalities of budget and tax policy to know it's wrong for the White House or Congress to plead no money to invest in children while simultaneously giving trillions of dollars in tax cuts to the wealthiest Americans-or promise us that policies will help everyone when they are really designed to give the most to those who need it the least.
Our children-Brown, Black, and White-deserve more. In this case, the dividend tax cut is very good news for wealthy stockholders, but for the more than nine in ten Latino children who won't see any help from it it's just business as usual.
Marian Wright Edelman is President and Founder of the Children's Defense Fund whose mission is to Leave No Child Behind* and to ensure every child a Healthy Start, a Head Start, a Fair Start, a Safe Start, and a Moral Start in life and successful passage to adulthood with the help of caring families and communities.
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