Millions of Americans receive what's known as the Earned Income Tax Credit (EITC) every year. This means that, even if they paid no income tax at all, they receive money from the IRS, credited to them as if they'd overpaid taxes and were receiving a refund. (The small print in IRS definitions doesn't put it that way, but that's what it amounts to, IMHO.)
The sums involved are huge. In 1999, 19.3 million Americans received a total of $31.9 billion in EITC payments, for an average of about $1,693 per recipient. In 2022, the latest year for which figures are available, 23 million Americans received a total of $57 billion in EITC funds, for an average of $2,478 per recipient.
If, as President Trump has suggested, the Internal Revenue Service is to be abolished, along with income tax as we know it today, who would calculate and pay out EITC every year?
I've seen many arguments that the EITC appears to be nothing more or less than a (thinly disguised) attempt to implement "reparations for slavery" by tying them to a complex financial calculation that just happens to benefit a very large proportion of black Americans, while leaving most taxpayers from other racial groups out in the cold. (The IRS isn't very helpful in providing a racial breakdown of who gets what, and who is denied what, so that's a speculative analysis based on what information is available.) If anyone disagrees with the purported link between the EITC and reparations, please share your thoughts with us in Comments. I'm sure the topic will be controversial.
My position on reparations for slavery, a topic beloved of left-wing and progressive politicians, is that I'll support them for two groups of persons only:
- Those who were themselves slaves, and are now free;
- Those who were born with living ancestors (parents, grandparents, whatever) who were or had been slaves, and who can thus claim that their immediate family was affected by slavery.
At any rate, if there is a link between reparations and the EITC, and the former is off the table, then I see no reason for the EITC (as currently constituted and calculated) to continue. Let it be abolished, along with the IRS and income tax in general.
What say you, readers?
Peter