What? A) yes, the federal government is allowed to distribute benefits without income testing them. B) You misunderstand how the EITC works -- it's a credit, not a cash gift -- it can't go negative. In fact, its benefits disappear for someone without an income (or with too low an income), which is what differentiates it from a real basic income or "negative income tax".
You misunderstand how the EITC works. EITC is "refundable", which means that you can get more money back from the government than what you paid in tax. It can, so to speak, "go negative".
EDIT: Am I wrong? I took a taxation class, that's what I learned.
Nope, you're not wrong, I am. Sorry! It's definitely the case that in marginal cases it does go negative (it's hard to actually tell but it looks like the correct narrow income bracket AND a spouse and some kids, e.g. "normal" families++). Eyeballing it, it doesn't look like it could go more than a couple thousand $ negative in the most optimal circumstances, but not exactly sure.
I was familiar with the fact that EITC doesn't provide a credit if you don't have an income and narrows to zero with less income (and I've checked it out at both ends of the spectrum in a couple weird years), but not so much with its politics, which are surpluses for low-income-but-not-no-income families.
++ or at least how politicians like to pretend normal families look.
Comments
What? A) yes, the federal government is allowed to distribute benefits without income testing them. B) You misunderstand how the EITC works -- it's a credit, not a cash gift -- it can't go negative. In fact, its benefits disappear for someone without an income (or with too low an income), which is what differentiates it from a real basic income or "negative income tax".
You misunderstand how the EITC works. EITC is "refundable", which means that you can get more money back from the government than what you paid in tax. It can, so to speak, "go negative".
https://www.irs.gov/uac/newsroom/earned-income-tax-credit-do...
EDIT: Am I wrong? I took a taxation class, that's what I learned.
EDIT: Am I wrong? I took a taxation class, that's what I learned.
Nope, you're not wrong, I am. Sorry! It's definitely the case that in marginal cases it does go negative (it's hard to actually tell but it looks like the correct narrow income bracket AND a spouse and some kids, e.g. "normal" families++). Eyeballing it, it doesn't look like it could go more than a couple thousand $ negative in the most optimal circumstances, but not exactly sure.
I was familiar with the fact that EITC doesn't provide a credit if you don't have an income and narrows to zero with less income (and I've checked it out at both ends of the spectrum in a couple weird years), but not so much with its politics, which are surpluses for low-income-but-not-no-income families.
++ or at least how politicians like to pretend normal families look.