WASHINGTON--The Concord Coalition Citizens' Council today urged Senators to oppose any attempt to remove the "Kidsave" mandatory savings tax credit from the tax bill currently before the Senate.
The Kidsave mandatory savings measure, authored by Sens. Bob Kerrey (D-Neb.) and John Breaux (D-La.), would allow a $500 tax credit for each child between the ages of 13-16, only if parents invest the money in a qualified retirement account in their child's name. Under the plan, a portion of the savings could be withdrawn tax free for college tuition and fees.
"Even though Concord has consistently opposed any tax cut while the nation is still running budget deficits and the government must borrow money to finance the tax cuts, we believe Kidsave is far superior to a straight $500 per-child credit," said Concord Executive Director Martha Phillips. "In our view, a no-strings child tax credit is a cruel hoax on the very children who are supposed to benefit from it."
Under the straight $500 per-child tax credit supported by opponents of Kidsave, their would be no limits on how parents could spend the tax credit.
"Without Kidsave, there is no guarantee that the tax credit would be used for a child's benefit," Phillips said. "Even if the entire $500 tax credit was efficiently invested in children, it would merely offset an equal amount of government debt caused by the tax cut. Children would eventually shoulder the burden of that extra government debt through higher tax rates, lower retirement benefits and a lesser economy."
"At least under Kidsave, it would be clear who the beneficiaries are," Phillips said. "We wouldn't be creating a new entitlement for parents at the expense of their children."