Those pesky common people. So what if the Earned Income Tax Credit they receive is credited with keeping 9.4 percent of the U.S. population out of poverty, and even with helping 7.3 percent keep their jobs? They’re responsible for billions in tax fraud, Senate Republicans claim in their Appropriations Bill that recently passed. Let’s complicate the forms, and make those lower- and middle-income folks pay for professional help on their tax filings!
What the Senate GOP hopes that no one will find out, though, is that the same companies that provide that “help” are the ones directly responsible for this tax fraud. And their proposed “correction” will only make those same taxpayers more dependent on those same companies, which means the same problems will continue on a bigger scale.
In their recent budget bill, the Senate GOP claims that tax filers eligible for Earned Income Tax Credit – a simple one-page form – are trying to rip off the government. They even cite a report from the Government Accountability Office, too. You see, GAO did an investigative study that found EITC filers got $18 billion in extra tax refunds they weren’t truly eligible for, and in just the last fiscal year. Making the filing for EITC more complicated – requiring an extra four-to-five pages and with more complicated calculations – would somehow prevent those fraudulent claims, Senate GOP argues.
What Senate GOP hopes you don’t know is that those huge errors were the fault of tax-filing companies, though, including ones that also make tax-filing computer programs like “Tax Cut” (H&R Block) and “TurboTax” (Intuit). That’s what GAO actually reported.
In an undercover investigation, GAO learned that those same companies and their programs produced EITC filings that told taxpayers they were entitled to an average of $1,500 in additional tax refunds. But those extra refunds were based on false claims and incorrect calculations.
So who’s at fault for these errors? Those tax-filing companies, that’s who, along with their tax-filing software. It was their accountants and their programs that made the mistakes on EITC filings.
But who does the Senate GOP want to pay for that error? The low- and middle-income families that qualify for EITC.
And how does Senate GOP want them to pay? By making the forms for EITC longer and more complicated. That way, those lower- and middle-income taxpayers will have greater need to pay those same companies for help when filing their tax returns.
And how much will they have to pay? Even more than they already have! The companies that make the software will have to produce new updates to their programs, of course. (And which will give them more opportunity to make more errors.) As a result, the companies can then charge more for those new programs.
And why did Senate GOP decide to punish low- and middle-income families instead of the companies responsible for the errors? Because those tax-filing companies lobbied their asses off, that’s why (both H&R Block and Intel).
It gets even worse, too, according to the Center on Budget and Policy Priorities. In that same Appropriations Bill, the GOP proposes the IRS complicate the forms used to claim tax credits for college tuition and health insurance, and for the Child Tax Credit, too. So more Americans will need more help to file more tax forms, and even though that same “help” is what caused the problem to begin with.
That’s today’s lesson on the GOP. If you make mistakes that cost billions, just lobby and pay-off your Republican representatives, who’ll make ordinary folks pay for those mistakes.
Of course, the Appropriations Bill still needs to be okayed by the House. But that branch of Congress has even more Republicans, so don’t get your hopes up.
Featured image by 401kcalculator.com via Flickr