THE WORKING POOR ARE PAYING FOR ANTI-POVERTY BENEFITS: FIXING THE HOLE IN THE ANTI-POVERTY PURSE

摘要

The working poor are paying an estimated $2 billion in annual tax compliance costs. Even though mostrnof these families do not have any taxable income, they are required to file an income tax return tornreceive their anti-poverty, refundable Earned Income Tax Credit (EITC). In many cases, these workingrnindividuals are paying their tax compliance costs with their anti-poverty EITC dollars. Congress enactedrnthe EITC to keep the working poor out of poverty rather than to provide a profitable niche business forrntax practitioners. However, Congress has also enacted a tax system so complex that the working poorrnrequire professional tax assistance to claim these critical anti-poverty benefits. This paper exploresrnseveral alternatives to shift the anti-poverty benefits of the EITC back to the working poor.