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Originally Posted by tbwinner
Child tax credit or earned income credit?
The "increased" child tax credit is more an advance on one's "normal" credit that they get at tax time. You get the full amount up to 100K in earnings IIRC. You will see people with lower refunds this year wondering what happened to their normal 5K-10K they've become used to "free" from the government.
Say you have 3 kids over 6, you're currently getting $750 a month in advance. At tax time, assuming everything else is Zero tax at tax time, you will get $4500 refund (9k child tax credit minus 4500 advances). In prior years when CTC was 2K/kid they'd get $6000. A lot of people will claim they've been shorted, when really they squandered most of it throughout the year.
On the EIC side, you could make a case that it is cheaper and more beneficial to work 1 or 2 days a week collecting EIC credit along with CTC than it is to work a FT job and pay childcare forgoing any EIC.
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#1, there should be no child tax credit whatsoever. You have a kid, that's on you to make it work economically. Why should I have to pay for someone else's mistake during sex?
#2, Biden and the dems want to make the monthly child tax credit permanent. Pure and simple, this child tax credit is wealth redistribution. It does nothing to improve the lives of these children, nor their families, nor small business, nor America. It is idiotic to an extreme.
#3, the child tax credit does not get any one of these families out of poverty. They are simply working less to "maintain" their "lifestyle", which is why the unemployment rate fell even though few jobs were created. Fewer people actually want to work. There is a huge segment of the population that prefers to live paycheck to paycheck, and an extra $5 in their pocket is a mistake that has to be spent. In the spring when people get their tax refund, they will take off two weeks because they will live off the refund until it runs out. In our business, if we give out a pay raise to one of these people, it means they won't want as many hours each week, so it makes us reluctant to reward them as it hurts us both financially and in getting the contract work completed. It's insanely counterintuitive.
#4, these freebies are unsustainable in a market economy. At some point, just like you see in Venezuela, Cuba, and the Soviet Union, the hard workers trying to get ahead work less hard until the tax revenue cycle spirals out of control. Conversely, the free money floating around increases inflationary pressure to where the govt needs to hand out more and more freebies until the system collapses, but at that point we'll be at war with each other.