Reyes and Thelma Cuevas live in a part of town where the pros and cons of competing Washington Beltway tax policies have not been a general topic of conversation. The couple, in fact, had no idea new tax legislation had become law or how, if ever, it would benefit them.
For the Cuevas family the survival imperatives of living in the tough, densely packed immigrant neighborhood surrounding Los Angeles's drug- and gang-infested MacArthur Park are basic: Earn enough money to meet the $550 monthly rent on their cramped, two-bedroom apartment; buy food; pay the bills; provide clothes and school supplies for their four minor children; keep the family car running; and, above all, avoid becoming entries under "victim" in the daily crime reports.
Last year they managed, barely - earning a little more than $17,000 combined, with help from food stamps and every cent of the their $2,437 withholding refunded.
They did it by holding down three part-time jobs between them. Both earn $6.80 an hour working for employee-owned Pueblo Nuevo Enterprises Inc., a janitorial service. Thelma also works as a thrift-store clerk at the same pay rate. A fifth child, Jose, 19, Thelma's son by a previous marriage who supports himself bagging groceries at a local market, shares the family's living quarters and contributes $100 a month toward car insurance.
Not all the bases were covered, though. While Pueblo Nuevo, founded by the local Episcopal Church mission, offers paid vacation days, there is no health plan yet. And, except for $500 in Pueblo Nuevo stock accrued through two years of payroll deductions, there is little if anything left to put toward retirement.
What spare time Reyes and Thelma have is spent helping the children with their homework, going to church, or if their 1980 Toyota is running, in family outings to Echo Park just beyond the Hollywood Freeway. A trip to the English-language movies their children prefer is possible only on those rare occasions when a few extra dollars are available.
At their income level, says Robert Barker, chair of the accounting department at California State University, Northridge, new provisions in the tax law will mean nothing for the Cuevas family.
"[People think] it will be great for low-income people, but they're really low income - and $17,000 for a family that size would put them basically at the poverty level - you don't look to income-tax provisions to provide relief," he says, "because at that income they really aren't taxpayers."
But that may change this year. Reyes, who immigrated from Mexico 19 years ago, and Thelma, who came from Nicaragua nine years ago, hope to take the next step up the economic ladder.
"Yes," they say, speaking through an interpreter, they'd like a better place to live, maybe a house. Yes, they'd like a better car. Yes, they'd like their children to stay in school as long as they can - perhaps even university or technical college.
"They've made some progress," says the Rev. Philip Lance, vicar of Pueblo Nuevo Episcopal Mission. "They've moved west of Alvarado. We have kind of a joke around here that if you're east of Alvarado that's a really bad [area]."
And this year the Cuevases' gross income may approach "$25,000 perhaps $26,000," Mr. Lance says, adding that the prospects for Reyes moving from part-time to full-time are good.
LANCE should know, he is not only the Cuevases' minister but, as a founder and general manager of Pueblo Nuevo Enterprises and the Pueblo Nuevo Thrift Store, he's their boss.
If the Cuevases' income does rise that much, Mr. Barker says, then they may be able to take advantage of the most important provision to low-income households in the new bill: the child tax credit.
"There isn't much [new] for the low-income group except that," says Barker. "It is, of course, sensitive to the number of children, so low-income families that have a significant number of children under age 17 will get a significant kicker from this."
The credit, however, would only be valuable if the parent has a tax liability, Barker says. And that wouldn't likely come into play until a family the size of the Cuevases made at least $20,000 of gross income - barring mortgage payments or significant out-of-pocket health-care expenses.
Also of some benefit to Reyes and Thelma is that the earned-income credit wasn't eliminated, Barker says. "The earned-income tax credit, as it suggests, was intended to encourage people at or near the poverty line to work and get a subsidy from the federal government in the form of a credit."
He notes that competition among accountants has driven down the price for low-end families who need help filling out their tax returns. And while other aspects of the tax bill, like tuition tax credits, most probably won't apply to the lowest-income households, Barker says the legislation serves a valuable purpose.
"I think it balances a whole bunch of interests," he says. "It gives a little break to the low-end taxpayer.
"If they ... move up to the next level, another $10, $15, or $20,000, there are tax advantages waiting that will continue to help them ... It puts the steps of the ladder a little closer together so they don't have to reach so far to get to the next [rung]."