EITC earned income tax cred

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see child tax credit

merri ok

favored by both left and right?

this includes other tax break for kids etc

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an 2 24

The U.S. House late Wednesday passed legislation that would modestly expand the child tax credit for low-income families while reviving significant business tax breaks, a trade-off that some progressive lawmakers rejected as far too lopsided in favor of corporations.

The Tax Relief for American Families and Workers Act of 2024 passed the House in an overwhelming 357 to 70 vote, with 169 Republicans and 188 Democrats supporting the measure.

Nearly all of the 23 House Democrats who voted against the bill are members of the Congressional Progressive Caucus (CPC), a roughly 100-member coalition whose chair backed the $78 billion legislation.

Rep. Rosa DeLauro (D-Conn.), the top Democrat on the House Appropriations Committee, said following Wednesday's vote that she opposed the bill because it is "deeply inequitable—at a time when we have seen the greatest rise in inequality with the biggest corporations making super profits at the expense of the consumer."

The American Prospect's David Dayen has estimated that "in the time period when all the tax credits are actually in place, the business tax changes are five times more costly than the CTC changes."

"It is a mockery of who representative government works for," DeLauro argued. "This bill delivers massive tax cuts for the biggest corporations while denying middle class families the economic security they had under the expanded, monthly child tax credit. This is a reversal of the largest middle-class tax cut in history. The bill provides millions of dollars in tax relief for the wealthy and pennies for the poor."

Unlike the 2021 child tax credit expansion that eliminated the program's regressive phase-in and drove the U.S. child poverty rate down to a record low before expiring at the end of that year, the legislation passed by the House on Wednesday would exclude families with less than $2,500 in annual income—the very poorest.

The bill, which now heads to the closely divided U.S. Senate, would also not restore the monthly payments that families received under the 2021 expansion. Eligible families would claim the CTC when filing their annual tax returns.

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an 2 23 edit bd

The Iowa Republican party is proposingdraconian new restrictions on what food can be purchased with the state’s food stamps, or Supplemental Nutrition Assistance Program (SNAP).

This attack on the poor at the state level is coming at the same time as the national GOP has successfullyblocked the continuation of the Child Tax Credit, a program which substantially, demonstrably reduced child poverty.

The GOP’s priorities are clear. They don’t want to reduce poverty. They want to police, control and torment the poor. The party that constantly touts liberty doesn’t want liberty for all. They want liberty for the powerful to impose their will on the most vulnerable.

Republican ire

SNAP is a crucial safety net and the country’s most effective anti-hunger program. In 2021, itensured that 41 million Americans — 12 percent of the population — could afford an adequate diet every month.

SNAP also provides valuable emergency economic stability. SNAP enrollment increases in downturns, putting money into the economy to combat recession and boost recovery.

Despite its importance, or because of it, SNAP has long been a target of Republican ire.

Matthew Gritter’s 2017 monographUndeserving: SNAP Reform and Conceptions of the Deserving Poor chronicles how politicians have moved to regulate food stamps in recent decades. They’ve tried to put limits on what foods could be purchased and to prevent people without disabilities or dependents from getting aid.

They’ve also pushed drug testing — an ideaintroduced by former KKK leader and Louisiana Senator David Duke, and instituted in states like Florida and Utah.

Gritter concludes in an earlier paper that the goal of these interventions appears to be to replace “a safety net of last resort” with “a costly method to impose punitive measures on the poor.”

“Evidence suggests that reforms will reduce enrollment without changing the circumstances that led people to seek assistance,” he says.

Iowa is the latest attempt to target SNAP.

Canned tuna and salmon

The new bill,House File 3, would putharsh limits on what low-income families could purchase in Iowa when receiving federal SNAP food stamp funds for healthy food options.

It wouldrestrict purchases to those covered by the Women, Infants, and Children (WIC) program, which uses federal funds for food assistance to pregnant people and new parents.

According to theIowa Hunger Coalition, “this bill would restrict SNAP participants’ ability to make their own food choices, take food away from Iowans, and increase hunger and food insecurity in our state.”

Families under House File 3 could no longer buy white bread, American cheese, coffee, snack foods, canned fruit and vegetables, bottled water, crackers and more.

They also couldn’t buy any meat except canned tuna and salmon. This despite the fact that meat, poultry and seafood is thetop expenditure category for SNAP recipients, accounting for 19 percent of money spent on food.

The Iowa GOP also wants a limit of $2,750 on household assets for receiving SNAP benefits; the cap is raised to $4,250 in assets if one family member is over 59 or is disabled. Houses and one vehicle would be excluded. Children’s savings accounts would not.

These low caps mean that people could not save for emergencies, because doing so would mean they would lose SNAP benefits. Nor could they own a second vehicle — a necessity for getting to work in many rural areas.

Historic low

The assault on SNAP is ugly because we have just conducted a sweeping experiment demonstrating that no-strings assistance to the poor is wildly successful at lifting children out of poverty with virtually no downsides.

The expanded Child Tax Creditinstituted in 2021 provided monthly cash payments to low-income families with children. It closed a loophole that prevented the poorest families from receiving assistance, and increased payments for everyone.

The result? Child poverty dropped to a historic low of 5.2 percent.

Lawmakers allowed the expanded CTC to expire.

Inevitably, child poverty rateswent back up.

Lawmakers refused to renew the expanded CTC in part because, mirroring attitudes towards SNAP, they believed that the people receiving the money were not deserving.

West Virginia’s conservative Democratic Senator Joe Manchin saidhe was worried parents would use benefits to buy drugs. He also wanted to institute work requirements for recipients.

But increasing restrictions prevents the neediest people from receiving benefits. It also mayprevent people from working.

A study of those in line to receive CTC funds found that recipientsbelieved the additional money would allow them to pay for childcare and increase their work hours.

Sure enough, in studies of the program conducted after it expired, there wasno evidence that CTC payments reduced workforce participation.

Undeserving

We know that SNAP is effective at reducing hunger. We know that simply giving people money, without conditions, is an incredibly effective means of pulling children out of poverty.

But conservatives don’t care. That’s because they’re not actually concerned with helping the poor.

They are concerned with policing them.

Conservatives want a poverty policy that is focused onpreventing people from accessing benefits. The goal is to punish the undeserving. And all poor people are assumed to be undeserving.

The success of the CTC shows that poverty and hunger are not intractable problems. They are deliberate policy choices.

The wealthy and powerful impose misery on the poor because they believe desperate people are more tractable and less able to organize.

Or perhaps they attack the poor simply because they don’t like the poor and believe they should suffer.

In any case, the expiration of the CTC, and the Iowa GOP’s assault on the SNAP program, shows that neither the pandemic nor the 2022 midterms have changed Republican commitments. GOP politicians like to cosplay as champions of the working class.

But the truth is they hold people of modest means in contempt and relish the chance to take food out of their mouths.

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https://www.alternet.org/2019/03/democrats-newest-proposal-could-slash-child-poverty-by-a-third-heres-how/

On Wednesday, Sens. Sherrod Brown (D-OH) and Michael Bennet (D-CO) introduced a bold proposal known as the American Family Act. And while it hasn’t yet attracted much attention, this bill is likely to become a fixture of Democratic economic policy in the coming years.

This bill, an earlier version of which was introduced in 2017, would effectively expand the child tax credit into a “child allowance”, much like what other countries including Canada and the United Kingdom currently have. Under the law, families would receive $300 per month for children under 5, and $250 a month for children ages 6-16. According to researchers, this plan would cut child poverty by a third, taking it from 14.8 percent to 9.5 percent — an estimated 4 million children.

The current child tax credit, which was expanded slightly in 2017 as part of the GOP tax bill, is severely flawed — higher-income households are eligible for up to $2,000 in tax credits a year, but lower-income families that actually need the money get almost nothing.

As Vox’s Dylan Matthews explains, Democrats are in a position to unify behind this proposal, and even if the odds of passage in the current Republican Senate are remote, there will be key opportunities down the road to make a serious push for it:

[I]n its latest incarnation, the bill has the support of the majority of the Democratic House and Senate caucuses, including the No. 2 Democrats in the House and Senate (Steny Hoyer and Dick Durbin, respectively); just about every possible Democratic 2020 contender currently in Congress from Tim Ryan in the House to Cory Booker and Elizabeth Warren in the Senate; and leaders of both the moderate (Sens. Amy Klobuchar and Chris Coons) and left (Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez) wings of the party. Thirty-five Democratic senators (out of 48 Democrats total) and 168 Democratic House Reps (out of 235) are sponsors or co-sponsors.

Given that the bill could easily be passed through budget reconciliation — which requires only a bare majority in the Senate — it has a strong shot at being enacted the next time Democrats have a governing trifecta in the House, Senate, and presidency, whether that’s in 2021, 2025, or later. What’s more, the expiration of the Trump tax bill in 2025 will force a reconsideration of the US tax code, giving Democrats an opportunity to push for the inclusion of a child poverty-slashing provision in whatever deal comes out of that deadline.

Over the decades, Democrats have delivered massive reforms for the working and middle classes, from Social Security to Medicare to the Affordable Care Act. The American Family Act would be a similarly large disruption to the status quo, that would combat some of the ugliest, most life-destroying poverty in the United States, and provide for those who need it.

===

OMG evil sorta, the tool to equalize is going after poor and ignoring rich and corps

https://www.democracynow.org/2019/1/14/as_govt_shutdown_drags_on_irs

EIC audits up (1/3) because automated, but rich ppl have complex taxes that take human power, so rates dropping

also large corps not audited much anymore

https://en.wikipedia.org/wiki/Earned_income_tax_credit

United States federal earned income tax credit or earned income credit (EITC or EIC) is a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient’s income and number of children. For a person or couple to claim one or more persons as their qualifying child, requirements such as relationship, age, and shared residency must be met. In the 2013 tax year, working families, if they have children, with annual incomes below $37,870 to $51,567 (depending on the number of dependent children) may be eligible for the federal EITC. Childless workers that have incomes below about $14,340 ($19,680 for a married couple) can receive a very small EITC benefit. U.S. tax forms 1040EZ, 1040A, or 1040 can be used to claim EITC without qualifying children. To claim the credit with qualifying children, forms 1040A or 1040 must be used along with Schedule EITC attached.^[1]

EIC phases in slowly, has a medium-length plateau, and then phases out more slowly than it was phased in. Since the credit phases out at 21% (more than one qualifying child) or 16% (one qualifying child), it is always preferable to have one more dollar of actual salary or wages (although technically, since the EIC table moves by fifty-dollar increments, it is always preferable to have an extra fifty-dollar increment of salary or wages) considering the EITC alone. If the EITC is combined with multiple other means-tested programs such as Medicaid or Temporary Assistance for Needy Families, it is possible that the marginal tax rate approaches or exceeds 100% in rare circumstances depending on the state of residence; conversely, under certain circumstances, net income can rise faster than the increase in wages because the EITC phases in.^[2]

For tax year 2013, the maximum EITC benefit for a single person or couple filing without qualifying children is $487. The maximum EITC with one qualifying child is $3,250, with two children, it is $5,372, and with three or more qualifying children, it is $6,044.^[3][4] These amounts are indexed annually for inflation.

The earned income tax credit has been part of political debates in the United States regarding whether raising the minimum wage or increasing EITC is a better idea.^[5][6][7] In a random survey of 568 members of the American Economic Association in 2011, roughly 60% of economists agreed (31.7%) or agreed with provisos (30.8%) that the Earned Income Tax Credit program should be expanded.^[8]

Overview

Enacted in 1975, the initially modest EIC has been expanded by tax legislation on a number of occasions, including the widely publicized Tax Reform Act of 1986, and was further expanded in 1990, 1993, 2001, and 2009, regardless of whether the act in general raised taxes (1990, 1993), lowered taxes (2001), or eliminated other deductions and credits (1986).^[9] Today, the EITC is one of the largest anti-poverty tools in the United States.^[10] Most income measures, including the poverty rate, do not account for the credit.^[11]

A qualifying child can be a person's daughter, son, stepchild, or any further descendant (such as grandchild, great grandchild, etc.) or a person's brother, sister, half sister, half brother, stepbrother, stepsister, or any further descendant (such as niece, nephew, great-nephew, great-great-niece, etc.). A qualifying child can also be in the process of being adopted provided he or she has been lawfully placed. Foster children also count provided either the child has been officially placed or is a member of one’s extended family. A younger single parent cannot claim EIC if he or she is also claimable as a qualifying child of their parent or another older relative, which can happen in some extended family situations. This restriction does not apply to a married couple who is claiming EIC with a child, even if one or both spouses are under the age of 19.

A person claiming EIC must be older than his or her qualifying child unless the “child” is classified as "permanently and totally disabled" for the tax year (physician states one year or more). A qualifying "child" can be up to and including age 18. A qualifying "child" who is a full-time student (one long semester or equivalent) can be up to and including age 23. And a person classified as "permanently and totally disabled" (one year or more) can be any age and count as one’s qualifying "child" provided the other requirements are met. Parents claim their own child(ren) if eligible unless they are waiving this year's credit to an extended family member who has higher adjusted gross income. There is no support test for EIC. There is a six-month plus one day shared residency test.^[3][12]

In the 2009 American Recovery and Reinvestment Act, the EIC was temporarily expanded for two specific groups: married couples and families with three or more children; this expansion was extended through December 2012 by H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Effective for the 2010, 2011, 2012 and 2013 filing seasons, the EIC supported these taxpayers by:

Increasing benefits for larger families by creating a new category or “third tier” of the EIC for families with three or more children. In this tier, the credit phases in at 45 percent of income (up from 40 percent), effectively increasing the maximum credit for these families by almost $600.
Increasing marriage penalty relief by raising the income threshold at which the EIC begins to phase out for married couples to $5,000 above the amount for unmarried filers, thereby giving MFJ filers a longer plateau. The combined plateau and phase-out range for married filing jointly is still not double that for single filers, and thus there still is a marriage penalty, just less than there used to be.^[4]

As of early 2012, 26 states have enacted state EITCs: Colorado, Connecticut, Delaware, District of Columbia, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Rhode Island, Vermont, Virginia, and Wisconsin.^[13] Some of these state EICs are refundable, and some are not. In addition, a few small local EICs have been enacted in San Francisco,^[14] New York City,^[15] and Montgomery County, Maryland.^[16]

Earned income

...

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death spiral IRS cuts: but also polar Matthew Effect

[OMG]

The story has been different for poor taxpayers. The IRS oversees one of the government’s largest anti-poverty programs, the earned income tax credit, which provides cash to the working poor. Under continued pressure from Republicans, the IRS has long made a priority of auditing people who receive that money, and as the IRS has shrunk, those audits have consumed even more resources, accounting for 36 percent of audits last year. The credit’s recipients — whose annual income is typically less than $20,000 — are now examined at rates similar to those who make $500,000 to $1 million a year. Only people with incomes above $1 million are examined much more frequently.

http://www.msnbc.com/msnbc/eitc-anti-poverty-partisan-divide

The partisan divide over the Earned Income Tax Credit

03/04/14 07:23 PM—UPDATED 03/05/14 10:56 AM

By Timothy Noah

President Obama’s new budget increases spending on and expands eligibility for the Earned Income Tax Credit, the largest and most successful government assistance program for the working poor.

The much-praised House GOP tax reform introduced last week would cut the EITC, even though a House GOP report excoriating most federal assistance to the poor singled out the program for applause.

This new partisan difference over the EITC – a program that in the past has been a rare source of bipartisan agreement – speaks volumes about Republicans’ newfound ambivalence toward the working poor.

The EITC was created back in 1975 by Sen. Russell Long, who–despite being the son of populist Louisiana Gov. Huey ” Long – was fairly conservative. The idea was to use government assistance to reward work rather than indolence among the poor; you only got the money if you could show that you had worked.

This conceit had obvious appeal to President Ronald Reagan, who expanded the program, and later to President Bill Clinton, who expanded it much further even as he eliminated “welfare as we know it,” i.e., long-term, no-strings cash assistance to the poor. (The EITC was further expanded under Presidents George W. Bush and Barack Obama.)

Welfare reform should have ended the partisan scrimmage over welfare dependency. Instead, it merely shifted the goalposts. Previously, the GOP had praised the “deserving” (i.e., working) poor even as it derided the “dependent” (i.e., welfare-collecting) poor. But with Clinton’s abolition of long-term assistance and imposition of work requirements, it became more difficult to isolate a class of nonworking, government-dependent poor that Republicans could reliably scapegoat. So they gradually came to rebrand as “dependent” any low-income person who collected government assistance, even if that person also had a job. In effect, conservatives broadened their definition of “welfare” to the breaking point, including food stamps (most of which go to people with jobs), Medicaid (a benefit you collect only if you get sick), and even Pell Grants.

The EITC wasn’t targeted explicitly. But it ran afoul of a growing doctrine put forth by then-Rep. Jim DeMint, R.-S.C., and the *Wall Street Journal* editorial page, that said too many lower-income people were getting away with paying no income tax. The theory was that too many of them were getting too used to the idea that government was all benefit and no cost (a formulation that overlooked the many regressive state, local, and federal payroll taxes already being paid by the poor). House Budget Committee Chairman Paul Ryan and House Majority Leader Eric Cantor cautiously signed on – the usual code phrase was “broaden the base”—before a version of this construct (“the 47%”) helped blow up Mitt Romney’s 2012 presidential campaign. An interesting debate ensued on the right, with no particular resolution about whether conservatives should boast about inventing the EITC or quietly favor its demise.

House Ways and Means Committee Chairman Dave Camp’s tax reform reflects that ambivalence. Camp would in effect replace the EITC with a payroll-tax exemption up to $4,000 and impose various restrictions. A Ways and Means Committee document argues that this would eliminate fraudulent or erroneous claims, and, because it’s simpler, might be used by some people currently put off by the EITC’s complexity.

The committee document also says that “exempting a portion of wages from payroll tax would represent a tax cut, whereas the current EITC constitutes government spending.”

Really? To me, both alternatives look like tax breaks. At any rate, such hair-splitting over definitional formalities can be of interest only to highly partisan Republicans.

The trouble with Camp’s EITC proposal is that, by the reckoning of the Joint Committee on Taxation, it would cut this highly-regarded program by $217 billion over the next decade. Robert Greenstein, chairman of the Center on Budget and Policy Priorities, a Washington nonprofit, calculates that a mother with two children working full-time at the minimum wage would lose roughly $2,000 per year once the change went fully into effect.

The president’s new budget goes in precisely the opposite direction, increasing the EITC by about $60 billion over the next decade. It would do this by easing eligibility and expanding benefits for childless workers to receive the benefit, which today is reserved mostly for custodial parents. Childless workers today must be 25 or older to receive the credit; that threshold would be reduced to 21. Childless recipients of the EITC today receive a maximum tax credit of $500; that would be doubled to $1,000. Also, the maximum-income eligibility limit for childless recipients would be raised from about $15,000 to about $18,000. According to the White House, this would increase the EITC benefit for a currently-eligible single person working 35 hours per week at minimum wage from $161 to $823.

The expansion’s $60 billion cost would be paid for by closing two notoriously inequitable business loopholes: one, for “carried interest,” that allows hedge fund and private-equity managers to define much of their income as capital gains, thereby lowering the rate at which it’s taxed; and another, for S-corporations, that allows self-employed individuals to avoid paying Social Security and Medicare taxes.

The GOP tax plan, much to Camp’s credit, already proposes eliminating both these loopholes. But rather than using the savings to lower marginal tax rates, some of them on very high incomes, and reduce their number, the White House plan would use the money to help the working poor. That encapsulates as well as anything the current difference between prevailing Democratic and Republican notions of reform.