WASHINGTON — When Darren Hogan of Mount Carmel, Conn., announced the birth of his sixth child, Regina, he called her a “blessing” but also a “tax credit.”

It was meant in jest, but Catholic parents like the Hogans will be keenly interested in the new tax credit that President Bush was expected to sign into law June 7.

The plan increases the child tax credit from $500 per child to $600 immediately, and, by 2010, to $1,000 per child — meaning that families with dependents will eventually get double the current amount sliced from their tax bill.

It also changes the tax credit so that even families that owe nothing in taxes can benefit from it.

Under the current system, the credits can reduce a family's tax burden to zero, but that's all — if parents' credits add up to more than the amount of tax they would pay anyway, the extra credit is ignored. Under the proposed system, tax credit would be “refundable” — that means a qualifying family would not only pay no taxes, but also get a check for the “extra” credit.

The credit would apply to married couples making under $110,000 or single parents making under $75,000. Most parents will get the full credit, but various exceptions change how much of it is refundable.

Bishop Joseph A. Fiorenza, president of the U.S. Catholic Conference, strongly supported the refundable tax credit and urged Bush to veto any tax-cut proposals that didn't include it. The conference has supported refundable child tax credits since 1991.

Bush originally proposed a non-refundable tax credit, but one that gave the credit to families with incomes up to $200,000, a higher ceiling than the Congressional versions.

Allan Carlson, president of the Howard Center for Family, Religion and Society, praised the bill. In 1991 the National Commission on Children, of which Carlson was a member, issued a report calling for a $1,000 per child refundable tax credit.

Carlson saw the refundable credit as a cushion for families leaving the rolls under welfare reform. “It helps poor parents raise their children,” he claimed.

Single-Mom Subsidy?

Critics charged that the refundable credit had been falsely portrayed as “family-friendly.”

Maggie Gallagher, a syndicated columnist and co-author of The Case for Marriage: Why Married People are Happier, Healthier, and Better Off Financially, said, “It would be better if it were not refundable, because [the refundable credit] functions as a fairly small subsidy for single mothers.”

Gallagher cited research in Europe and the United States showing that European-style “family allowances,” in which the government offers subsidies to families in order to ease falling birthrates, had very limited effects. Tax exemptions for children, on the other hand, have “quite powerful effects on marital fertility,” she said.

Gallagher said that this difference in effectiveness occurred because a tax exemption allows the family to keep more of its own money, whereas a subsidy — or a refundable credit — injects money from outside.

A tax credit “increases interdependence among family members,” she said. “It increases the economy of gratitude within the family when the money seems to come from one another, as opposed to a check from the government.”

Gallagher said, “In terms of increasing the proportion of children growing up with their own two parents, the increase in the tax exemption is likely to help. The refundable tax credit is not likely to help, and at the margins may hurt.”

Carlson replied, “I favor strongly that children should be born only inside of marriage, but even children that aren't born that way are a blessing.”

In general, Carlson saw the tax bill as “pro-marriage and pro-child.” He was disappointed that the child-care portions of the bill still grant tax credits only to families who employ outside day care. He would have preferred a bill that would have granted tax credits to all families, so that some could use the money to work fewer hours and stay home with the children, or pay family members to babysit.

However, Carlson noted, Congress “took some steps to lessen the marriage penalty, and they did it the right way.”

The Bush administration had originally proposed a marriage-penalty relief only for two-income families, excluding families where one parent stays home. Carlson said that energetic pro-family lobbyists got Congress to expand the lower tax bracket and the standard deduction for all married couples, not just “high-income, two-career couples.”

The plan also doubles the tax credits for adoption-related expenses, and gives employers incentives to provide day care for their employees' children.

But Gallagher cautioned that although voters are increasingly concerned with fixing family breakdown, “It is striking to me how very little of the tax cut is focused on developing a pro-family tax structure.”

As for Darren Hogan in Mount Carmel, the father of six tax credits acknowledged that the credit might not be the greatest tax policy from “a macro-economics perspective.”

All the same, he said, “we'll be sure to fill out whatever forms are necessary to get it.”