Wanna know why lots of people don’t pay federal income taxes? Well, the answer is largely the result of efforts by president Ronald Reagan and his successors to the White House. The Earned Income Tax Credit (EITC) began in 1975 as a modest program to put more money into the pockets of the working-class by reducing their federal tax liability. It was signed into law by then Republican president, Gerald R. Ford.
The EITC was greatly expanded during the Reagan presidency and over its history it has enjoyed broad bi-partisan support and was greatly expanded by both presidents Clinton and G.W. Bush. Republicans like it because it cuts taxes and Democrats because it gets people off the welfare rolls.
Today the EITC is but one of the reasons, albeit a major one, so many Americans don’t pay federal income taxes. It is also one of those things today’s right-wing politicians don’t mention when they make the claim that 47% of Americans don’t pay income tax and imply such is because they are somehow cheating the remaining 53%.
For more than you ever wanted to know about the Earned Income Tax Credit click HERE.