Who was that guy

[Black Bart]

who said "If you subsidize something, you get more of it?"

He was right and I've got proof. This morning I did a wages-only return for a young couple ($27K income). They don't have any children. Refund due - $42.

After printing it out and just for fun, I added two children. New result with all applicable kid credits -- $6,482.

When these things hit $2K or so, I thought "Well, that's enough! How much higher can it go?" And now I'm finding out -- there's apparently no limit. I mean, I know some people need help, but this is completely out of reason. Wonder who we could complain to the vote-buyers shoveling out the money hit the bottom of (China's) barrel?

Brings to mind a recent bank Ceo joke: "We gave him an unlimited expense account and he exceeded it!"

[RitaB]

You got that right!

Try it with three kids. Then try it with the purchase of an $80,000 house on November 1, 2009 under a full moon.

Then try this: two people shacked up with 6 kids... each make $27,000. Now see how it turns out when they marry. (Which they won't, of course, because we subsidize cohabitation...ok, ok, single parenthood.)

Yes, I will admit it. I built a house in 2005 with nice doors and windows and insulation, and I didn't get nothin. I am a little aggravated about it.

[JohnH]

who said "If you subsidize something, you get more of it?"

That would be Ronaldus Maximus

Here's another of his gems:

"Recession is when your neighbor loses his job. Depression is when you lose yours. And recovery is when Jimmy Carter loses his."

[Bees Knees]

In essence, the very idea of an income tax is a subsidy for someone else. The very first tax return in 1913 which was as simple as it ever has been only applied to the top 1% of income earners in the country. That 1% subsidized the cost of government for 99% of the rest of the nation.

If you want to get rid of subsidies, get rid of the income tax and replace it with a national sales tax on all products and services. That way everyone pays in proportion to the products and services they consume.

[Black Bart]

Ahem...on the other hand

...If you want to get rid of subsidies, get rid of the income tax and replace it with a national sales tax...

it ain't that bad -- and, of course, we must help our fellow man, do unto others..., minister unto the poor, charity is the noblest virtue, it is more blessed to give than receive...etc., etc., etc.

[Burke]

In essence, the very idea of an income tax is a subsidy for someone else. The very first tax return in 1913 which was as simple as it ever has been only applied to the top 1% of income earners in the country. That 1% subsidized the cost of government for 99% of the rest of the nation.

And I have a copy of that return. Two pages.

[taxxcpa]

Soak the rich

In essence, the very idea of an income tax is a subsidy for someone else. The very first tax return in 1913 which was as simple as it ever has been only applied to the top 1% of income earners in the country. That 1% subsidized the cost of government for 99% of the rest of the nation.

If you want to get rid of subsidies, get rid of the income tax and replace it with a national sales tax on all products and services. That way everyone pays in proportion to the products and services they consume.

The idea of soaking the rich back in 1913 was that whopping 6% bracket if you made over $500,000--which would be about the equivalent of $10 million or more today.

[PIGLEE]

If you want to get rid of subsidies, get rid of the income tax and replace it with a national sales tax on all products and services. That way everyone pays in proportion to the products and services they consume.

I now have a reason to support a national sales tax. Although the EIC people would probably have a card and instead of paying sales tax, they would pay none, and get a discount on their purchase. Oh what a wicked web has been woven, to get rid of the EIC I think we would see a revolution like never imagined.

Jan

[taxxcpa]

Eic

The EIC is such a great thing that every man, woman and child should get an EIC credit.
After all, it's only money and we can borrow all we need from China and our grandchildren can take care of the interest on the national debt until the annual interest exceeds our gross national product. Then we can default on it, like Russia did when the Communists took over and bumped off the Czar.

[powerage]

on the other hand...

Thanks to the EIC, I can have taxable income, pay nothing in, and get a small refund.

[RLymanC]

How about this

Single Mom with two handicaped children.

$54,000 coming from in home health care, on top of that the kids each get $9,600 from Social Security,

Total public money income $73,000.

So know she is a stay at home Mom, what next, well of course, take in 3 Foster kids with $1,500 a month payments (tax free), $54,000 + $73,000...Boggles the mind.

[David1980]

Single Mom with two handicaped children.

$54,000 coming from in home health care, on top of that the kids each get $9,600 from Social Security,

Total public money income $73,000.

So know she is a stay at home Mom, what next, well of course, take in 3 Foster kids with $1,500 a month payments (tax free), $54,000 + $73,000...Boggles the mind.

I grew up in a welfare family myself (after my parents divorced at like age 8). It amazed me how much better I had it being on welfare than before when my family was just an average working family. So many of those benefits for low-income families just pile on top of each other. It's as if one of those benefits alone was supposed to make up for the poverty, but you had many different programs stacking benefits and they never seemed to account for the other low income benefits you received.

So we'd have health care, food stamps, free breakfast/lunch at school, section 8 housing, welfare, the food bank, free meals at the local charity, etc... I remember one thanksgiving we received 7 food baskets. 7 turkeys and tons of food.

The other thing I really remember from that time, I lived in a low-income apartment complex where probably most of the people there received government assistance. You'd see kids wearing clothes that were 3 years old while mommy & daddy had brand new clothing a big TV and nice cars.

There just wasn't any mechanism to ensure the money that was supposed to help the kid actually helped the kid.

One reason I'm a *HUGE* supporter of government healthcare and against EIC and other "money" programs. Give the health insurance and you know where that benefit is going to go - towards the health care of those receiving it. Give a parent $5000 to care for their kid and the parent has $5000 of spending money.

[Black Bart]

Good post and

I grew up in a welfare family myself (after my parents divorced at like age 8). It amazed me how much better I had it being on welfare than before when my family was just an average working family. So many of those benefits for low-income families just pile on top of each other. It's as if one of those benefits alone was supposed to make up for the poverty, but you had many different programs stacking benefits and they never seemed to account for the other low income benefits you received.

So we'd have health care, food stamps, free breakfast/lunch at school, section 8 housing, welfare, the food bank, free meals at the local charity, etc... I remember one thanksgiving we received 7 food baskets. 7 turkeys and tons of food.

an eye-opener. I didn't realize things were that good in some places. Here the kids and the parents both look pretty scruffy. We've got government apartments but they're pretty beat-up with junk cars in the driveway. The "old folks" living there are mostly okay, but several of the younger ones are taking/making meth.

Lots of older people (50-60-70s) live here, some retired-some working, their kids are gone, no such credits are available to them, and there's tremendous resentment among them about "big" money handed out for adding kids to the welfare rolls. It's not that they want welfare for themselves (it's "looked down on" here by anybody that's anybody), but they feel the government is rewarding deadbeats (I know some are decent people, but they get lumped into the group) instead of "good" people.

Some of the hard feelings may be our low regional income standard (nobody complained too much when EIC was smaller) because $6K is a huge windfall here, while it might not be much where you are. Minimum wage is common, a fairly good job is $12-14 an hour, $15-25K jobs are common, cops make upper 20s-low 30s, and those $50K post office jobs sneered at in other parts of the country are much-sought after here.

The other thing I really remember from that time, I lived in a low-income apartment complex where probably most of the people there received government assistance. You'd see kids wearing clothes that were 3 years old while mommy & daddy had brand new clothing a big TV and nice cars. There just wasn't any mechanism to ensure the money that was supposed to help the kid actually helped the kid. One reason I'm a *HUGE* supporter of government healthcare and against EIC and other "money" programs. Give the health insurance and you know where that benefit is going to go - towards the health care of those receiving it. Give a parent $5000 to care for their kid and the parent has $5000 of spending money.

While I agree about EIC, I do see -- contrary to your position -- an upside in the sense that it seems to me a child would derive some benefits, albeit inadvertently, from his parents' receiving money because he/she would at least live in a better-furnished house and ride in a safer car and maybe have access to some of the better things of life . Of course, having lived the life, you would know better than I. Is there anything to that argument?

[David1980]

While I agree about EIC, I do see -- contrary to your position -- an upside in the sense that it seems to me a child would derive some benefits, albeit inadvertently, from his parents' receiving money because he/she would at least live in a better-furnished house and ride in a safer car and maybe have access to some of the better things of life . Of course, having lived the life, you would know better than I. Is there anything to that argument?

Well, yes, some of it ultimately does benefit the child. I'd be lying if I said none of it did. After all, if you're paying for the parents luxuries they aren't paying for it themselves so whatever money they do have goes further on their own expenses meaning they most likely have some extra money left over. And the kids get to watch the big TV's too! Just saying that a lot of that money provided on the basis of having kids in need doesn't help the kid as much as (I think) it should.