Earned (?) Income Credit
We need to do away with the EIC. It's supposed to be a "helping hand", but it's just another wealth transfer, enabling certain people to get a bigger tax refund than they actually had taxes withheld. But how many people get an EIC refund and actually invest it or otherwise apply it to the improvement of their overall financial position? No, it seems like most of them just treat it like a winning lottery ticket, and blow it on something quick and frivolous. (The lottery just being a tax on people who can't do math, but that's another rant.)
The EIC is treated like free money. Folks like H&R Block and Jackson-Hewitt make big bucks from the people that would rather get only 60% of their free money RIGHT NOW than wait three whole long weeks for the check to arrive with 100% of their free money. It would be interesting to get data from the big tax-prep companies to see what kind of correlation there is between customers who get EIC and customers who take refund-advance loans. But you probably won't see such data without a court order, because those companies' business model depends on the complexities and inequities of the tax code.
The EIC is treated like free money. Folks like H&R Block and Jackson-Hewitt make big bucks from the people that would rather get only 60% of their free money RIGHT NOW than wait three whole long weeks for the check to arrive with 100% of their free money. It would be interesting to get data from the big tax-prep companies to see what kind of correlation there is between customers who get EIC and customers who take refund-advance loans. But you probably won't see such data without a court order, because those companies' business model depends on the complexities and inequities of the tax code.
Labels: Tax Rant
posted by Steve | 7:56 AM
1 Comments:
Yeah, it's true that there are problems with the EIC, just like there are problems with many facets of our government.
And yes, the personal income tax is illegal; don't even get me started on AMT, and I don't even make enough to be "eligible" to pay it.
But it's like this: I got an EIC payment once.
I did the figuring on my taxes three times, and couldn't get the math to work. So I finally called the IRS.
They told me that yes, I had followed the instructions correctly, and yes, I was getting back more than was withheld from my paycheck.
But I was a low-income single mom with a child at home, and I didn't even get to take the deduction for a dependant- that went to the child's father (what the IRS didn't realize was that said father didn't contribute as much as the deduction he received. But that's another rant).
The agent told me to consider it as a form of one-time welfare payment. I could use it, right?
Well, I'm really glad I didn't have to wait 5 or 10 years, as you suggest.
We used it for food.
Your sister.
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