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Originally Posted by MrTia
i'm questioning whether earned-income tax credits can actually take your tax liability into surplus status:
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With the EIC and Child Tax Credits - yes. But that is not the point. the point is that lowering a net 30% marginal tax rate, gives a person more disposable income which is good. It is good for poor people, good for rich people and good for the economy.
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you seem to be saying that in the first instance the woman's tax writeoffs actually get her a refund as though she'd made more money than she actually did? i have no evidence to disbelieve that, but i just find it astonishing the tax code would be put together that way.
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Don't take my word for it, use Pub.17 and go through some examples, or ask your tax professional.
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but the upshot of what you're posting seems to be that someone whose income is in the lower-middle-class range -- 30s, 40s -- has a tax burden far outstripping someone whose tax burden is negligible due to poverty. the egghead in me wants to say that any sum seems significant when compared to zero, but i actually agree that the middle-class tax burden is oppressive. government at this moment is huge and is consuming lots of tax money, and despite reams of happy-talk about tax cuts, the middle class seems by and large to be paying for it. the question is, why? what is the government spending it on?
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Progress.
Now understand that the major benefactors of Bush's tax cuts are hourly/salaried working class people. Sure the rich benefited but, like i posted they have options, i.e. Bill Gates can have a $1 per year salary, run expenses through his corporations, charities, trusts, etc. to avoid taxes all day long if he were so inclined and if he thought the income tax rates to high. Our current tax system is too complicated and has too many holes in it for rich people to get screwed one way or the other. Why don't Democrats get that?