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Be Aware of Various Tax Breaks;
You May Be Surprised When it comes to tax breaks for low-income families, you may be surprised at the identities of two individuals who helped pave the way starting nearly 40 years ago.
One is former U.S. Senator Daniel
Patrick Moynihan, an iconoclast Democrat from New York State.
The other is Richard Nixon, a
president who was not always as conservative on domestic policy as
he may have seemed.
What this all means today is that
low-wage and even low-middle wage families qualify for tax credits,
even though some still don't realize it.
The minimum wage was debated just as sharply during the 1960s and 1970s as today, and in fact these battles took place more often because poverty programs were higher on the national agenda.
Moynihan made a pitch to reconcile
advocates who desired a higher minimum and Chamber of Commerce types
who said hikes would wipe out jobs.
He proposed an idea that he described as a 'negative income tax' in which the government would give credits instead of raising the minimum so often. Some of the Lowest income folks could get the credits even if they owned no taxes. Hence the term 'negative', which in other words has added up to a subsidy.
Nixon counted Moynihan among the few
Democrats he trusted, and lent an ear as always. The result was
creation of the Earned Income Credit, or EIC. This didn't
take effect until 1975, a year after Nixon resigned amid Watergate,
but he was the first president to submit the proposal.
Expansions gradually have taken
place, especially under Bill Clinton during the 1990s. The
maximum income limit has risen up to between $37,000 to
$39,000 for a parent of two or more children, regardless
of whether married or single. When there's one child, it's closer to
the mid-$30,000 range.
People without offspring who are
school age or attending college will find far stricter rules to
qualify for the Earned Income Credit, and the limits top out near
$15,000. This is because of so much emphasis on families,
children, education and so forth in typical political discourse.
Two other 'breaks' for lower-income
families have followed the EIC. The Child Tax Credit expands
upon the standard deduction for dependants, and the Child and
Dependant Care Credit refunds at least a little bit of the cost
for having someone else look after the kid, or kids, while at work.
Residents are possibly more familiar
with Michigan's Homestead Property Tax Credit and Home
Heating Tax Credit.
To receive various credits, it can be
worth shelling out some cash to a certified preparer. However,
beware of the steep possible costs from refund advance loans.
Two sources offer free tax prep. One
is the VITA Program (Volunteer Income Tax Assistance) through
the United Way at 755-0505 and the other is the Saginaw
County Community Action Committee at 753-7741.
The IRS is at 1-800-TAX-FORM. (But don't tell 'em that Dick Nixon sent you.)
Citizens who have failed to reap
their credits in the past can arrange to file retroactively back to
the 2004 tax year.
Family Values
In this Presidential election year it appears that the leading candidates in the Republican & Democrat parties would be wise to rethink the emphasis in recent past election years of focusing campaigns upon the nebulous notion of 'family values'.
Rudy Guiliani has been quoted
as calling pedophilic priest Alan Placa one of his "closest
friends", while Mitt Romney notes that his five combat-age
sons are "showing support for our nation by helping me get elected."
Meanwhile, Mike Huckabee's son
David lynched a stray dog at Scout Camp in 1998 and was arrested
for attempting to board a plane with a loaded Glock in April.
John McCain was still married
to his first wife when courted the 25-year old woman who became Wife
number two, whereas Fred Thompson cited his most prized
possession in an AP questionnaire as his 'trophy wife.'
Of course, the Democrats are not
fairing much better, with Barack Obama having bought more
than $50,000 in stock in Skyterra, a satellite
communications business with four principal owners consisting of
campaign contributors who also raised more than $150,000 for
Obama.
And while she was never charged with
any wrongdoing, let us not forget that Hillary Clinton became
the only First Lady to be subpoenaed, testifying before a federal
grand jury as a consequence of the Whitewater scandal in 1996.
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