The poor don't pay payroll taxes.

www.cbpp.org ^ | Center on Budget & Policy Priorities

[VeniVidiVici]

The demorats keep saying that the poor don't participate in the tax cuts and that they DO pay taxes via the payroll tax (ss/medicare). But the rats never mentiong the 'Earned Income (tax) Credit'. After finding brochure on a left activist website on how to encourage people to sign-up for the program, pdf file HERE ,it seems to me that not only do people that qualify under the table in the document pay very little, if any, income tax, they also pay very little if any payroll tax!

Am my assumption wrong here? Why aren't we beating the dems over the head with this? Make sure you check-out the table at the end of the brochure.

Excerpts:

Who can get the EIC (Earned Income (tax) Credit) and how much is it worth? Single or married people who worked full-time or part-time at some point in 2001 can qualify for the EIC, depending on their income.

• Workers who were raising one child in their home and had family income of less than $28,281 in 2001 can get an EIC of up to $2,428.

• Workers who were raising more than one child in their home and had family income of less than $32,121 in 2001 can get an EIC of up to $4,008.

• Workers who were not raising children in their home,were between ages 25 and 64 on December 31, 2001, and had income below $10,710 can get an EIC of up to $364.

Example:

How does the EIC work? • Eligible workers can get a check from the IRS.

Ms. Berger has two children in college and earned $19,000 in 2001. Her federal income tax for the year was $365, all of which was withheld from her pay. She is eligible for an EIC of $2,763. The EIC pays her back the $365 she paid in income tax and gives her an additional cash refund of $2,398.

Does the EIC affect welfare benefits? In most cases, the EIC does not affect eligibility for benefits like cash assistance (“welfare”), Medicaid, food stamps, SSI, or public or subsidized housing.

Can military personnel claim the EIC? Yes. Military personnel can claim the EIC, whether they live in the United States or overseas, but some special circumstances are important to note: Combat pay and allowances for housing and subsistence — including the value of meals and lodging furnished in-kind to personnel residing on military bases — are considered earned income for EIC purposes even though some of these sources of income may be nontaxable.

Can immigrant workers get the EIC? Many legal immigrants can qualify for the EIC, as long as they meet the eligibility requirements.

Workers Without Children Can also Qualify for the EIC

What about child support? Child support payments a parent receives do not count as income when determining eligibility for the EIC or the amount of the EIC.

Can military personnel claim the EIC? Yes. Military personnel can claim the EIC, whether they live in the United States or overseas, but some special circumstances are important to note: Combat pay and allowances for housing and subsistence — including the value of meals and lodging furnished in-kind to personnel residing on military bases — are considered earned income for EIC purposes even though some of these sources of income may be nontaxable.

State and local economies • EIC participation boosts state and local economies. In the first eight months of 2001 alone, nearly $31 billion in federal EIC funds flowed into the states.

Saver’s Tax Credit for 2002: Workers Can Save for Retirement

Example: Randy and Meg expect to earn $24,000 in 2002 and have two children attending college. They ordinarily would owe income tax of $415 and would qualify for an EIC of $2,143.

After paying income tax, their EIC refund would be worth $1,728 ($2,143 - $415). However, during 2002 they plan to make pre-tax salary reduction contributions of $1,000 to Meg’s retirement plan at work.This reduces their taxable income to $23,000, and lowers their income tax by $100 to $315.

Beginning in 2002, only their taxable earned income will be considered in calculating the EIC; thus, they will qualify for a higher EIC of $2,354, an increase of $211. And, they can take the Saver’s Tax Credit,worth up to 50 percent of their contribution amount, or as much as $500. The Saver’s Tax Credit eliminates their $315 income tax, and they still receive their EIC of $2,354.

Overall, by making the $1,000 contribution to Meg’s retirement account and taking the Saver’s Tax Credit, the couple gets a tax benefit of $626. (Their original income tax amount was reduced by $100 and then the remaining $315 was eliminated, for a total reduction of $415. In addition, by reducing their taxable income, they were able to claim an EIC that was $211 higher than it would have been originally: $415 + $211 = $626.)

[valkyrieanne]

Why don't Republicans bring up the EITC? For one thing, human nature - when you do something so fundamentally opposed to your principles, it's embarrassing to admit you did it. For another, the EITC is a way to surreptitiously slip welfare benefits in the back door while ostensibly sweeping them out the front. It lets you make points with mushy-middle voters while changing nothing substantial. Finally, Republicans don't bring up the EITC these days because it's devastating to the argument for school vouchers. Everywhere you turn around, someone is claiming "let's let the parents keep their tax money." Guess what - they *don't pay taxes to start with.* The Emperor has no clothes in this argument.