Repeat after me, John Kerry -- and all Democrats: This is a Republican tax increase.

Bid to Save Tax Refunds for the Poor Is Blocked

Congressional negotiators beat back efforts yesterday to expand and preserve tax refunds for poor families, even as they added $13 billion in corporate tax breaks to a package of middle-class tax cuts that could come to a vote in the Senate today.

Bear with this -- it's a bit complicated:

...The dust-up centers on an obscure provision in the 10-year, $1.35 trillion tax cut that Congress passed in 2001. That tax cut expanded the $500-per-child tax credit to $1,000, but it also made another child credit available as a tax refund to some poor families who pay little or no federal income taxes.

Such families were allowed to claim a child credit worth as much as 10 percent of their earnings over $10,000. But the 2001 law stipulated that the $10,000 threshold would rise with inflation, effectively slicing into or eliminating refunds for families whose income does not keep up with inflation....

But the result isn't complicated at all:

Because incomes at the bottom end of the workforce have largely stagnated, the rising threshold has had a significant impact, said Leonard E. Burman, a senior fellow at the Urban Institute. Of the 11 million families claiming the child tax refund, more than 4 million -- with 9.2 million children -- will see their credit shrink or disappear in 2005, Burman estimated.

Here's what Republican negotiators thought was more important than helping poor families get by:

Instead, they focused on a package of 20 expiring business taxes worth $13 billion, including a research and experimentation tax credit worth $7.6 billion through 2014, a $700 million tax credit for hiring welfare recipients, and smaller breaks to help Caribbean distillers, clean-fuel vehicle manufacturers, environmental remediation and wind energy, among others.

Message: Caribbean distillers get a tax break. Poor American families get a TAX INCREASE.

(If the parties were reversed, isn't that what the Republicans would say?)