Vent

[DaveO]

No matter if you think the EITC is sound social policy or the slippery slope to complete despotism. The question in my mind is, “Is this something the IRS should be doing?” I think refundable tax credits distort the tax system and provide way too much incentive to game the system. Nina Olson made some very good points in her report to Congress this year. She first questions if a given tax expenditure is promoting the right behavior or social good. She then goes on to ask if the outcome can be measured with a suitable metric to see if the behavior has been modified or the social good desired achieved. She then questions if this is something the IRS is able, qualified and in fact should be doing.

This is my big problem with tax expenditures in general and refundable credits in particular. The function of the tax code should be to raise the necessary funds for the functions of a small, efficient and constitutionally restrained federal government. It is without question that the Federal government spends vast amounts of money foolishly and wastes it on programs designed to do little more than assure their re-election. For some the EITC and the various other social safety net programs provide a leg up and enable the recipient to get an education and go on to a life of self reliance and productivity. For far too many it becomes an inter-generational trap which keeps them in poverty and dependency.

[taxxcpa]

If you buy into the idea of the top 2% paying 50% of the taxes, get some statistics about the new polarization of wealth now versus 40 years ago. Then tell me where you think the re-distribution is occuring.

You make some good points. I would add that we are being squeezed from both sides, both the government and the corporations. Like the corporate drain from price increases and exportation of jobs, the government spends billions, maybe trillions on "nation-building," un-winnable wars, welfare, foreign aid, useless government agencies, and pork barrel projects.

The taxpayers, whether you are in the 10% bracket or the 35% bracket are paying the price. Of course some get back more tax dollars than they contribute so they have little to complain about. If you run an EIC/RAL tax business, the EIC and the RALs are costing you a little, but your increased income makes it to your advantage.

[FEDUKE404]

Reply to G Rocket

I have no fundamental problem with the EITC concept, even in its present form. (Go back and look how it started...and then how it has expanded over the years.)

What I do have a problem with is how blatantly it is abused (ask any tax preparer!!), combined with the basic fact that apparently no one in the government really seems to give a rat's southern end about such flagrant abuse.

Who pays what "fair" share of their hard-earned income is a complete non-issue regarding this aspect regarding those who repeatedly and fraudulently abuse the EITC.

I think we should be able to "rant" on a limited access tax discussion board about this aspect of the EITC. Getting into any social issues is probably borderline outside TOS for this forum.

FE

[Golden Rocket]

Other Side to This

Probably not the best forum for a social commentary, but since EIC precipitated this, I'll offer an opposing view. I'm not telling anyone that I embrace this view entirely, but certainly in part.

EIC replaces the incremental "minimum wage" increases. There have been only two such minimum wage increases in the last 20 years, one of them in 2007 and another during the Clinton administration. Until EIC, these increases were much more frequent. The difference is that companies no longer have to pay the increases, the GUBBERMINT does. The difference flows into the coffers of corporate profit.

Taxation as a means of "wealth re-distribution?" Most of the people who complain about this do NOT complain about $4/gallon for gasoline, the high price of commodities or the incredible shrinking candy bar. Oh, they complain about paying it, but they do not see the redistribution of wealth being sucked to the top in greater measure than the gubbermint sucks it to the bottom. Sometimes you hear the argument that the "top 2% of income earners pay over 50% of the income taxes" as if this is clear proof of wealth redistribution.

I ask if this is true, HOW DID IT GET THAT WAY? The answer is because the top 2% have been sucking the wealth up in such distortive amounts that they are now the only people in a tax bracket significant enough to pay anything.

I'm not a big supporter of the EIC crowd, but I am a big supporter of the working middle class. And I believe by anyone's look at true demographics, the middle class is being squeezed out. The EIC, like it or not, is an investment in the economy by the government, whereas this investment used to be made by corporate America. Not only are they not paying it anymore, they are importing true middle-class jobs overseas, but are charging more for what they sell at an ever-avaricious intensity when compared to the public's ability to pay.

If you buy into the idea of the top 2% paying 50% of the taxes, get some statistics about the new polarization of wealth now versus 40 years ago. Then tell me where you think the re-distribution is occuring.

[BHoffman]

LOL! Stand back, Pilgrim. I'll show ya a RANT. (insert John Wayne swagger)

Some things should be hard. It should be hard to establish and maintain good credit. It should be hard to buy a house. It should be hard to provide for a family. It should be hard to get an A in school. That effort makes success more important, and raises the value of these things - honesty when dealing with others, pride in homeownership, responsibility to family, respect for one's skills.

[luke]

No

I wouldn't do the tax return if I had the suspicion, especially one that involved the EIC.

There was no suspicion of "wrong doing" just UNFAIRNESS of "tax welfare" system.......

I was almost "over it" until I read B Hoffman's Sat RANT - NOW THATS A RANT! haha

[BHoffman]

You mean those "shovel ready" jobs?

[dyne]

Our highways and bridges are disintergrating. Someone must be paid to repair them.
Why does't the goverment hire some of the unemployed to repair the roads and bridges?
This would help solve two problems.

[Questionguy101]

I've had several. The ones that REALLY kill me are the ones I suspect are working for cash and not reporting it. I don't mind helping people that need it, but AAUGH!

I wouldn't do the tax return if I had the suspicion, especially one that involved the EIC.

[BHoffman]

taxxcpa - That would be insulting to ants.

The whole idea is to put everyone into gray government housing, working a gray government job, riding a gray government bus, wearing gray government clothing, eating gray government food, depending on gray government health care, watching gray government TV. No homelessness, no hunger, no unemployment, all environmentally correct, no smoking or drinking or drug addiction, no obesity. A bland, gray, government Utopia for everyone.

Everyone except the academic theorists and politicians and the enforcers. They will be living in full color like kings and queens. Just like they do now in Cuba and Venezuela and North Korea and other dictatorships that started out with charismatic fellows who loving mouthed those gentle sounding Marxist principles. Some of them probably started out as true believers but they all have or will end up so enslaved to luxury that they will starve their own people.

It takes generations of cultural degradation for the population to submit to the gray government life. America isn't even close to this. I have great hope for our country.

[kpangelinan]

"From each according to his ability. To each according to his need."

The more you need the more you get. The more your ability generates, the more you have to contribute.

The whole idea is to transform society into something like an ant colony.

I think ants are smarter than us!

[kpangelinan]

Good heavens - you call that a rant? Please, allow me.

I think it's hit the point where hard work and an honest life must be its own reward. The big problem is the system. And the few people who are in charge of fixing the system are not motivated to fix it. In fact, it would be detrimental to their careers if they did. So we have a moral hazard.

There are those who believe they are somehow entitled to "free" money because the law says so. Some people think working for a living is for suckers, living within one's means is for suckers. Until the American people, en masse, decide that earned income is more morally valuable than living off the work of others then we are on the same path as the European countries who are imposing "austerity" on their spoiled populations.

Frances Fox Pivens, who enjoys great fame among liberals and American socialists, wrote the following article for "The Nation", a left-leaning publication:

http://www.thenation.com/article/157292/mobilizing-jobless

This article has been criticized by some conservative pundits as calling for violence. Notice how she calls for mobilization of the unemployed and the disadvantaged, blames the employers and conservative politicians, and sees the government as responsible for job creation. I think she is calling for the American people to give moral status to free riders. I think she is calling for the government to spread the wealth. I think she is ignorant of the fact that income transfer programs administered by government spreads nothing except poverty, misery, and leads to dictatorship when fully implemented. Whether she is actually advocating downright street riots is a question, but I think she would sit in her expensive penthouse far above the fray and feel very satisified if violent riots were to occur and especially smug if she got the credit for the death and destruction.

In any civilized society, it is our responsibility to care for our needy. Americans get that. We are a generous and responsible people. If given the chance, I believe the needy would be better off depending on family and charity than the cheese. And, what defines "needy"? An 18 year old woman with two children and no husband and no job skills and no rich family is needy. Yet, the third child is on the way. We cannot let her children be hungry. We cannot insist upon her sterilization. As a general society, we have only one real way of controlling her behavior - we can publically shame her. As a general society, we can loudly voice our disapproval of behaviors that are disruptive.

Ms. Fox Pivens and others have not only removed society's ability to discourage activities that disrupt and harm the social unit by shaming, she and her ilk seek to elevate the disruptors to a higher moral standing merely because they are needy.

From the article: "....(Welfare moms in the 1960s did this by naming themselves "mothers" instead of "recipients," although they were unlucky in doing so at a time when motherhood was losing prestige.)...." Unlucky, Franny. Let's really prey on the weak to further our fame and test our academic theories - let's convince poverty-stricken minority teenage girls that it's a wonderful thing, it's a government check, it's a way to elevate your community status, it's your right, it's prestigious, to have a baby when you're 15 years old.

Now, THIS is a rant! Happy Saturday

Holy smoly....this is a rant.....nice job.

So, I had a t/p come in, with 28k in income....."ZERO" withholdings and received an 8k refund.

This one is worse....client with 20k in income, had 1300 withheld and received a 9k refund....wow!

[taxxcpa]

Milking the system

"From each according to his ability. To each according to his need."

The more you need the more you get. The more your ability generates, the more you have to contribute.

The whole idea is to transform society into something like an ant colony.

[BHoffman]

Moral Hazard

Good heavens - you call that a rant? Please, allow me.

I think it's hit the point where hard work and an honest life must be its own reward. The big problem is the system. And the few people who are in charge of fixing the system are not motivated to fix it. In fact, it would be detrimental to their careers if they did. So we have a moral hazard.

There are those who believe they are somehow entitled to "free" money because the law says so. Some people think working for a living is for suckers, living within one's means is for suckers. Until the American people, en masse, decide that earned income is more morally valuable than living off the work of others then we are on the same path as the European countries who are imposing "austerity" on their spoiled populations.

Frances Fox Pivens, who enjoys great fame among liberals and American socialists, wrote the following article for "The Nation", a left-leaning publication:

http://www.thenation.com/article/157292/mobilizing-jobless

This article has been criticized by some conservative pundits as calling for violence. Notice how she calls for mobilization of the unemployed and the disadvantaged, blames the employers and conservative politicians, and sees the government as responsible for job creation. I think she is calling for the American people to give moral status to free riders. I think she is calling for the government to spread the wealth. I think she is ignorant of the fact that income transfer programs administered by government spreads nothing except poverty, misery, and leads to dictatorship when fully implemented. Whether she is actually advocating downright street riots is a question, but I think she would sit in her expensive penthouse far above the fray and feel very satisified if violent riots were to occur and especially smug if she got the credit for the death and destruction.

In any civilized society, it is our responsibility to care for our needy. Americans get that. We are a generous and responsible people. If given the chance, I believe the needy would be better off depending on family and charity than the cheese. And, what defines "needy"? An 18 year old woman with two children and no husband and no job skills and no rich family is needy. Yet, the third child is on the way. We cannot let her children be hungry. We cannot insist upon her sterilization. As a general society, we have only one real way of controlling her behavior - we can publically shame her. As a general society, we can loudly voice our disapproval of behaviors that are disruptive.

Ms. Fox Pivens and others have not only removed society's ability to discourage activities that disrupt and harm the social unit by shaming, she and her ilk seek to elevate the disruptors to a higher moral standing merely because they are needy.

From the article: "....(Welfare moms in the 1960s did this by naming themselves "mothers" instead of "recipients," although they were unlucky in doing so at a time when motherhood was losing prestige.)...." Unlucky, Franny. Let's really prey on the weak to further our fame and test our academic theories - let's convince poverty-stricken minority teenage girls that it's a wonderful thing, it's a government check, it's a way to elevate your community status, it's your right, it's prestigious, to have a baby when you're 15 years old.

Now, THIS is a rant! Happy Saturday

[RitaB]

Yep

I've had several. The ones that REALLY kill me are the ones I suspect are working for cash and not reporting it. I don't mind helping people that need it, but AAUGH!

Don't get me started about the healthy people on disability.

Really, really, makes you want to overcharge. Helps a little.