It’s not about collecting taxes, it’s about crushing the peasants.
The reason is it’s easy to identify who is qualified for earned income. It’s a quick audit and a letter saying you owe back taxes. Very simple. I personally don’t think there should be earned income credit at all.
1) The rich can afford accountants who are more likely to ensure that their tax filings are accurate and follow current tax law.
2) The poor are more likely to hire cheap seasonal tax firms that bend the law and pile on deductions and credits that result in what appears to be a large refund, until, of course they get audited and have to amend and repay their inaccurate filing.
3) The poor, especially those illegally here, are more likely to commit outright fraud, claiming head of Household and Self Employment income, but only up to the point where they can realize the maximum credits. (yes Senor, I only earned $14,500 last year and have 5 children, I owe no tax, so where is my refund?)
Which group would you audit? Its not the group with professional accountants.