Tax credit= tax payer keeps dollars even if he didn’t actually pay any income taxes, dollars taken from another taxpayer.
I don’t think that’s right. I think what you’re thinking of is a REFUNDABLE tax credit. Otherwise all it can do is bring you down to paying no taxes. Example your income was $30,000 and there is a tax credit of $1000 then you you would pay taxes on $30,000 (let’s say a flat 10% just to make it simple) your payable taxes would be $3000. With the tax credit you would only pay $2000. If the tax credit were $4000 then you would pay $0. If you have a REFUNDABLE tax credit you would get a tax refund of $1000 in scenario 2. I believe this is how it works and this is why I’m fine with it. If I’m mistaken please correct me. I think the proposal calls for a tax credit, not a refundable one.