What's wrong with this pic

[MonacoMike]

The EIC is nothing Obama started, from what I've read, things like this, it's been around near 40yrs. http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=36&Topic2id=40&Topic3id=42

My understanding also is that 'earned income' is one of the qualifying criteria. Plenty of details on the internet as to how it works for those that want some accurate info, but here's a picture that might help http://www.cbpp.org/cms/index.cfm?fa=view&id=2505

There is no requirement to work minimum hours or earn a minimum income to qualify. One would work a few weeks a year and get the "refund".

"The EITC is "refundable," which means that if it exceeds a low-wage worker's income tax liability, the IRS will refund the balance."

 

[Woody]

It is called EITC earned income tax credit. Even though nothing may actually be earned.

MM

Do you mean no income earned?

Yes.

MM

There is no requirement to work minimum hours or earn a minimum income to qualify. One would work a few weeks a year and get the "refund".

"The EITC is "refundable," which means that if it exceeds a low-wage worker's income tax liability, the IRS will refund the balance."

There certainly is a minimum, you must have worked, that is the requirement...the only way you can generate 'earned income' is by working. You will not qualify for EIC if you do not have any 'earned income'. The amount of that 'earned income' along with other criteria determines the size of the credit. No work= no 'earned income'= you no qualify= you no get EIC $$$. Because the size of the credit is a variable, in part dependent on the amount of 'earned income', those people that work a couple/few weeks certainly aren't pulling the big bucks in from the EIC, it is not structured that way. The graphic I posted in earlier link illustrates that.

 

[MonacoMike]

Woody, I don't profess to be an expert on this, but I have talked to folks who claim to know how to get he "refund" with minimal work. This and similar programs are full of fraud.

MM

 

[Woody]

It is called EITC earned income tax credit. Even though nothing may actually be earned.

MM

Woody, I don't profess to be an expert on this, but I have talked to folks who claim to know how to get he "refund" with minimal work. This and similar programs are full of fraud.

MM

MM, the wires are crossed somehow. This is what I question(above highlighted). This is not correct. The fact that some are guilty of fraud does not change how the program is set up, it requires an individual to have 'earned income' to qualify. Perhaps it's the understanding/definition of the term 'earned income' that's the problem. From 'earned income' dollar #1 they qualify but the amount varies with how many dollars are 'earned' and other criterra like dependents. You realize any productive fraud for the big EIC bucks would have to include falsifying earnings statements and number of dependents, right. I suspect those that "know how to get the refund" aren't doing anything special. Perhaps they also live in one of the many states that have a program similar to the Feds and are picking up $$$ there too. Some of the state EIC are pretty generous. I've come to realize through the years that far to many people can't even read their check stub let alone understand what it is that contributes to the size of their income tax refund. :lol:

 

[JerryS]

Low income earners are people like a single person with children who works in a chicken processing plant or a Wal-Mart store. Or maybe a married couple with children who both work at minimum wage jobs. Some of these people also worked in clothing mills. Those mills are now all overseas and we now import the majority of our clothing.


What if the government did away with the EITC? What would the result be? Would a lot of businesses now be forced to pay a higher wage to their employees? Would we have higher costs for food? Higher costs for general merchandise? More imported items?


Is it possible that the EITC is actually a tool to protect some of our business against foreign competition? Or is it just a back door way to raise the minimum wage and spread the cost out over actual tax paying workers rather than specific businesses?