For years now, I’ve been advocating the need to make Earned Income Tax Credit (EITC) payments to Poor & Working Families automatic. President Bush did this a few years ago when practically every American got a check in the mail for $600 as the first round of economic stimulus.
This time, President Obama should target only those U.S. families with an income under $42,000 per year and are deemed eligible for EITC (go to www.irs.gov/eitc for more info). The federal budget for EITC is about $40 billion per year, so this is revenue neutral—no new money is needed to fund this benefit. Typically, seven million Americans leave over $7 billion on the table because they do not file for EITC. Be the blessing and remind all of your relatives and friends with families making under $42K per year to file for EITC.
Making EITC payments automatic to some of the poorest families in our country, including military personnel, who often neglect to file would create the economic stimulus President Obama hoped for from our world banking leaders. When you add the typical EITC benefit of $4, 500 to Child Tax Credits, Energy Tax Credit, and Homestead Tax Credits offered by some states; many Americans would realize a tax benefit of almost $6,000, if not more. We must get money in the hands of Americans who need it the most—they live on Main Street not Wall Street.
The cool thing about EITC is that you can back-file up to three years, so if you never filed that IRS Form W-5 (and do not pay for tax preparation if you’re poor—call 211 in Metro Detroit for free tax assistance help) there is an economic windfall waiting for you.
The shame of it all, of course, is that many Americans fail to file. In Michigan, we typically leave a half billion dollars on the table by not filing for EITC. Our former Governor Jennifer M. Granholm has tried to change this by adding EITC information to the state’s web site (www.michigan.gov/eitc). It’s working here in Michigan, but think of the impact President Obama would have in reminding all Americans to file for EITC in a nationally televised public service announcement paid for by the Ad Council or the Gates Foundation or the Democratic National Committee.
The implementation of making EITC payments automatic is not rocket science nor is it brain surgery—the federal government has everyone’s address that filed taxes with the IRS last year. There is no reason not to mail payments ahead of schedule given the poor shape of the economy. Our country’s poorest and working families deserve a break and are in dire need of an economic recovery of their own.
Mr. President, please mail eligible Americans their EITC checks now and create the surge in the economy you envisioned at the beginning of this year. It will be a wonderful blessing to almost 40 million Americans. Thank you.
By Victor L. Marsh, Sr. Senior Political Editor of The Oracle