House GOP Goes After Tax Overpayments To Low-Income Families, Lets Tax-Dodging Corporations Off The Hook

http://thinkprogress.org/economy/2011/05/25/173972/gop-goes-after-eitc/

By Pat Garofalo on May 25, 2011 at 2:30 pm

In a hearing this morning, the House Ways and Means Committee examined “improper payments” made in the Earned Income Tax Credit program, which distributed $64 billion in refundable tax credits last year to low-income families during the worst recession in 70 years. “Refundable tax credits not only reduce an individual’s tax liability, they can also result in payments from the government when the credits exceed one’s tax liability; meaning that millions of Americans have been able to eliminate any income tax liability and even get a check back from the government via refundable credits,” said oversight subcommittee chairman Charles Boustany (R-LA).

So instead of going after tax scofflaws that effectively rob the national treasury of hundreds of billions a year, House Republicans have decided to target one of the country’s largest anti-poverty programs, one that Ronald Reagan called “the best antipoverty, the best pro-family, the best job creation measure to come out of Congress.”

Of course, the IRS and Congress must be vigilant about all errors — and some overpayments undeniably occur with the EITC — but policymakers who are serious about reducing the deficit could focus on far larger examples of waste in our federal tax system. For example, the government loses $100 billion every year in revenue to offshore tax havens. It loses another $90 billion when multinational corporations shift their profits out of the country. While low- and middle-income families sacrifice to pay their share, dozens of profitable U.S. corporations like Exxon Mobil and Boeing manipulate loopholes to dodge federal taxes altogether.

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