by Joe Kirkpatrick
When I speak to people concerning finances, I often ask the question, "Do you know what Earned Income Credit" is? Probably 95% will answer "yes." I then put them in a somewhat awkward position by saying to them, "Tell me about it." I have never had one person who could tell me what it is.
Earned Income Credit was signed into law under the Clinton Administration. Basically, it is a program which was misguidedly enacted to help parents get an extra financial boost one time a year to help provide for their children. In reality, it became a one time a year cash cow for the "poor" so they could go out for a few days and blow money like crazy. More often than not, the money intended to help poor children is spent on Big Screen TV's, Nintendo's, pot, beer, cigarettes, eating out, and, of course, drugs. 99% of the money goes for everything but necessities for their children.
Here is how it works: For families living under the poverty level, even if they have paid $0 in income tax during the year, they still file an income tax return. If they have one child, the IRS sends them a refund for $1800. If they have two children, they get a check for $2700, and it goes up $900 per child from there. This "bonus" every year is not counted as income, thusly does not affect their food stamps, TennCare, section 8 housing, free breakfast and lunch at school, free cheese, WIC vouchers, or any other government program they already receive aid from.
One of my "dead beat" renters would sell one of his $900 exemptions to his wife's uncle every year for $900, and since the uncle didn't have any dependent children, he would claim it on his return and get $1800. One of my former employees would always treat all the guys out in the shop to a big party when he got his annual check. Within a week, he was broke. Another man I know got almost $6000 back last year, and within two months, he was broke and couldn't pay his rent.
As you are preparing your tax return this year, feel good about it. If you owe $2500 in taxes, you just helped sponsor one of these "poor" families. If you owe $5000, congratulations, you perhaps helped two "poor" families get that LCD big screen you thought you couldn't afford for yourself. If you owe $7500 or more, you can really be proud of what you have done for our "poor." Instead of living in huts in some third world country, you have helped America's poor live just like you!