Dei'ah veDibur - Information & Insight

A Window into the Chareidi World

15 Sivan 5761 - June 6, 2001 | Mordecai Plaut, director Published Weekly








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New U.S. Tax Law Seen as Boon to Orthodox Jewish Families
by Yated Ne'eman Staff

Orthodox Jews across the United States have "a special stake" in the new $1.35 trillion tax cut enacted by Congress, according to a spokesman for Agudath Israel of America.

"All Americans will benefit, to one extent or another, from the tax law," said Abba Cohen, the Orthodox group's Washington representative. "But the child-friendly, marriage- friendly and education-friendly provisions of the legislation will have an especially great impact on families in our community."

Perhaps most notable in this regard will be the increase in the per-child tax credit, phased in over the next ten years from its current level of $500 to an eventual level of $1000. And, while the credit was previously available only as an offset against tax liability, the new bill expands the credit to make it "refundable" as a rebate to many low- income Americans who owe no federal taxes.

"In communities like ours where large families are the rule rather than the exception," noted Mr. Cohen, "Uncle Sam's thousand-dollar-per-child commitment is cause for great celebration and great appreciation."

The genesis of the proposal to establish a refundable $1000- per-child tax credit may have been the 1992 report to the nation issued by the prestigious National Commission on Children, a 36-member body appointed by Congress and the White House to study the problem and challenges facing American youth and recommend new policies to deal with those problems and challenges. The Commission, which was chaired by Senator John D. Rockefeller of West Virginia and included Agudath Israel's executive vice president for government and public affairs Chaim Dovid Zwiebel, advanced a number of proposals to address the problem of child poverty, the centerpiece of which was the enactment of a thousand-dollar- per-child refundable tax credit. That proposal has now been enacted.

Other provisions of the new tax bill that could prove particularly meaningful to many Orthodox Jews include the increase and expansion of the basic standard deduction for a married couple filing a joint return, thereby eliminating the "marriage penalty" that many two-income couples were forced to bear under the previous law; a new provision that allows most taxpayers to deduct up to $4000 in "qualified higher education expenses," including tuition payments at accredited yeshivos gedolos and seminaries; and a substantial increase, from $500 to $2000, in the amount a taxpayer may annually contribute to an "Education IRA," the tax-free interest on which will now be usable to pay yeshiva tuition even at the elementary and secondary levels.

Mr. Zwiebel and Mr. Cohen had alerted congressional leaders to the importance of these provisions as the House and Senate negotiated the details of the nation's largest tax cut since 1981. Their inclusion in the final version of the bill, say the Agudath Israel advocates, "will make a real difference to many thousands of Orthodox Jewish families across the United States."


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