Please ensure Javascript is enabled for purposes of website accessibility
January 29, 2023

Senators Look to Expand Eligibility for a Successfully Dysfunctional Tax Credit

Today, Senators Dick Durbin (D-IL) and Sherrod Brown (D-OH) introduced legislation that will not only extend the Earned Income Tax Credit, but will also expand its eligibility. Both men are keen on the idea: 

“Enhancing the earned income tax credit should be a bipartisan goal, as President Reagan called EITC the most effective tool in fighting poverty,” Brown said in a statement. “We need to reward Americans who work hard and play by the rules and ensure that they can work and continue to take care of their families.”

“This bill is pro-family, pro-work legislation that would permanently extend critical refundable tax credit provisions that have helped lift millions of working families out of poverty,” Durbin added.

Pro-family! Pro-work! Those sound like pretty good things and lots of other people think so too. The Hill reports that two dozen other members of Congress have signed onto the legislation including Finance Committee Chairman Max Baucus.  

However, as you may or may not be aware, the EITC has some problems; Chris Bergin wrote about it just yesterday:

The EITC program leaks like a sieve. More bluntly and honestly stated, well-intentioned as it may be, the EITC has been corrupted. Don’t take my word for it. Recently, the Treasury Inspector General for Tax Administration released a report stating that up to one-quarter of EITC payments made in fiscal 2012 were improper. How much does that represent? Try $13.6 billion. In one year. Using a ten-year budget window, that’s $136 billion, and that’s just the tainted stuff.

Now, check me if I'm misguided here, but if one-quarter of a refundable (i.e. checks get cut) tax credit is improper, then expanding it might not be the thing to do. But maybe this is one of those GEFGW sorta things and everyone is cool with a 75% success rate? If so, tell me. I'll recalibrate my expectations if necessary.

Brown, Durbin unveil tax credit bill [The Hill]
Dilemma – The Earned Income Tax Credit [Tax Analysts via Tax Update]

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

Comments are closed.

Related articles

Now That Six Years of His Tax Returns Are Public, Here Are Four Words That Describe Donald Trump the Businessman

From the Los Angeles Times today: During the years in which Trump battled disclosure, much of the information he sought to keep secret about his pre-presidential finances became public anyway, largely from a 2020 New York Times investigation. The picture that emerged showed that for all Trump’s claims to be a great businessman, his core businesses […]

Exposure Drafts: A Very Taxing Thanksgiving

Listen to Oh My Fraud, a podcast by Caleb Newquist and Greg Kyte, and get free CPE through Earmark. And Exposure Drafts holiday cards are now available for purchase through Rubook Creative. Latest Accounting Jobs–Apply Now: Remote Senior Accountant, Part-time Remote Posted 3 weeks ago Sales and Use Tax Accountant – Contract Remote Posted 3 weeks ago Remote […]