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
26 comments:
I still favor a flat 15% tax. No exclusions.
We cannot “abolish” the IRS. We can give it another name if you like or we can overhaul it in the most spectacular way but we cannot abolish a means of collecting revenue.
My opinion is there should be no reparations because of the billions that the black community has leached out of society in 'welfare' and other social assistance plus the massive increases in costs associated with black crime. I also don't believe in generational welfare. I worked at a bank for a while and saw families that celebrated when a kid turned 18 because they could apply for welfare vs just being an add on to mom's welfare. And 18 year old new welfare recipients looking for a sperm donor so they could get pregnant at get an extra $234 a month in welfare for said baby.
Exile1981
The IRS will be abolished. Tax collection will go back under the Treasury Department. A sales type tax only - no income tax. Lower income people will be exempt/file a simple form for a refund. Just because all we know is the IRS system doesn't mean it is the only way to skin a cat. The pre-IRS US tax system is way better. The IRS tax ssatem has been used to destroy middle class America.
A flat sales tax disproportionately advantages the wealthy because it taxes spending rather than income, placing a heavier relative burden on those who must spend most of what they earn.
There should be no reparations for descendants of slaves. They are allowed to live in the USA and they have an opportunity to better themselves but don't.
Shirnk the government. Only way forward. that will limit the needed tax revenue to what Tariffs and Government land leases can cover.
Your take on reparations is missing the other half. The first part, that you list above is fine. It just leaves out that the people paying reparations will be everyone else, in particular anyone whose family who arrived in this country after about 1865 and couldn't possibly have held them as slaves.
Reparations should only be paid by people who can be demonstrated to have held those slaves, or whose immediate family held those slaves' immediate families.
It's a gold mine for those who chart family trees, or "23&Me".
If you go back far enough, at least half of the modern world is related to someone who has been a slave (I think Thomas Sowell says 80%) and at least half has held a slave. I wouldn't be surprised a bit to learn that some families pay reparations to themselves.
EITC is based on income and number of dependents. It does heavily benefit groups who are likely to have many children and be under- or un-employed, but since your race isn't on your 1040 form, it's not a direct determining factor.
I'd rather see a flat income tax - say, 10%, across the board, no deductions. If all of my income is W2 income, I don't need to file anything. If I have 1099 income, I just file a copy of my 1099s with a check for 10%.
And while I'm making wishes, people who are collecting welfare should be rendered unable to bear or father children until they have been off welfare for 6 months.
My son worked at a tax preparer's office for a while. His tales of customer's tax filings were astounding. Customers arriving in high dollar SUVs claiming minimum wage levels or less of income and numerous dependents. Racial makeup and national origin of the filers can be deduced by my unwillingness to classify further. I suggested that he should drop a dime to the feds. He told me to STFU. I am certain the feds have a clue but don't care for whatever reason.
The income tax was supposed to be temporary, so about time it should be abolished. Reparations should be in the form of a plane ticket to any African country desired, the only conditions are it is 1 way and you are barred from ever being on US soil ever again.
It would be an interesting experiment to take some of the folks who want reparations and send them to Africa for a year as a Peace Corps initiative. Some would come back grateful, very grateful.
The Earned Income Tax Credit was to incentivize working a job instead of just collecting welfare. Whatever it has become, it did start out as a good idea.
When it comes to collecting welfare, don't forget that corporations are the biggest hogs at the trough. Even farmers are shameless about collecting their big government checks.
Glass houses and all that.
I don't know anything about the EITC being linked to reparations -- I always thought it was a form of negative income tax as advocated by Milton Friedman. The idea is that people with no income have a basic stipend from the IRS (replacing various welfare programs) so they don't starve to death.
But NIT payments are structured such that they have an incentive to work and earn more until they reach some income level where the tax becomes positive and the NIT ends. Of course I assume the IRS is more than capable of screwing up this basically simple idea.
As for schemes like a flat tax or national sales tax, I doubt they'll ever replace our current system, unwieldy though it is. As Thomas Sowell points out, there are no simple solutions, only tradeoffs. A flat tax, for example, means no deductions. So what happens when you have catastrophic medical expenses? You can lose all your wealth and property, that's what. Every deduction in our creaky Rube Goldberg tax code was put there because some constituency wanted it . . . and politicians are not going to be eager to get rid of them, however attractive a flat tax seems to be.
I'm all for abolishing the IRS. I'm of 2 minds when it comes to taxes. 1) The federal government isn't limited to its spending by its revenue, so get rid of all taxes. 2) If we keep taxes make it a flat tax with no upper or lower bounds so that everyone can easily calculate how much their tax liability is. The only caveat/deductions would be for married-filing-jointly and/or minor children.
"...who would calculate and pay out EITC every year?" If the IRS and income taxes are abolished, well, then no one...
Let's not forget either, that ILLEGAL ALIENS get this credit as well...
I'm seeing a lot of people writing about a flat income tax.
I'd very much like to know where/to exactly what my money is going: some sedentary (another word for fat-assed), authoritarian with a room-temperature IQ who "corrects" the simple fifth-grade mathematics on my tax form and, should I argue the point, will send another of the same ilk who didn't make it to 4th grade to threaten me with fines and time in prison if I don't send a check yesterday.
I'm simply sick and tired of (just another of scams foisted upon us, like the COVID injections) the income tax.
And please, don't get me started on local taxes.
Here is my two cents worth: I've been a flat tax believer since I was a young adult. But first, all the waste has to be eliminated, AND the budget has to be balanced: no money coming in, no money going out. That's how my household works. Income tax is unconstitutional because The Sixteenth Amendment was never properly ratified. Check it out.
As for reparations, NO, they have had since 1865 to improve their lot in life as they saw fit, which is 159 years or 8 generations (20 years to a generation). They are not victims anymore of a social ill but actively perpetuating a myth of being downtrodden.
As a low fixed income retiree, i have benefited from the program - and I'm a 2nd gen. of German decent, so race wasn't a part of it. But i pay tax on my pension and Soc.Sec., eliminate the tax and the payments, id be better off!
On a separate note, any clue what's going on with Lawdog's blog? It's been suspended or some such crap, and I miss my daily reads when they're MIA! Hoping they get it ironed out okay....
While I agree with your premise for reparations for Union soldiers who fought to free the slaves, it should be taken a step further.
What about reparations for the vast majority of Southerners who did not own slaves but nonetheless lost their homes and livelihood during Sherman's march to the sea.
Therefore, the blacks today are owed reparations for never being slaves, owe the Yanks today reparations for fighting for their freedom (even though noone alive fought for the Union), who owe the Southerners (who are also all long dead) reparations for destroying the South.
Confused? Me too.
I like the idea of reparations.
Give every aggrieved individual $1,000,000 and be done with it. Forever.
BUT
Let's charge royalties whenever they use anything invented by a melanin-deficient person.
Television, telephone, cell phone, phonograph, the WWW, our system of electrical power generation and distribution, penicillin, the encryption that enables online shopping, refrigeration, heart transplant surgery, the light bulb, movies, etc...
Earn our money back again soon enough.
Just sayin' 😁
But a progressive tax system overwhelmingly favors the 'rich' because it's the rich who can afford tax attorneys and hide their money.
No tax is 'fair.'
I've watched the national sales taxes in Europe and the UK go from "3% and we eliminate all the other taxes" to the current "12-24% and we keep all the other taxes" in the last 30 years or so. No, thank you.
TXRed
Lawdog discussed the issue during the Bored Yet? podcast yesterday.
And many of them were doing fine (marriage, jobs, moving up) until LBJ ("I'll have those n*****s voting Democrat for the next 200 years!") created the new form of slavery misnamed the "Great Society". What you see today is the result.
I would think that very few Union soldiers died to free slaves. That was sold as the cause in mid-War, when it looked like England and/or France might recognize the CSA.
--Tennessee Budd
Income Tax is relatively new, for about the first half of it's existance, the federal government survived without it
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