Chalk up one more White House lie—that is, if you haven’t already run out of chalk.
When President Obama announced his unilateral—and probably illegal—executive amnesty program, Washington Post reporter Karen Tumulty wrote that White House spokesman Shawn Turner told her by email that “that the estimated 5 million immigrants granted protection from deportation will not be eligible for other federal benefits such as student financial aid, food stamps or housing subsidies.”
The Associated Press got the same message when it reported, “None of the immigrants who would be spared deportation under Obama’s executive actions would be able to receive federal assistance such as welfare or food stamps, or other income-based aid.”
Or maybe not. But, hey, who believes anything this White House says anyway? (The White House initially said the immigrants wouldn’t be eligible for Social Security and Medicare and then backtracked.)
Now IRS Commissioner John Koskinen has confirmed that the newly amnestied will be eligible for the Earned Income Tax Credit (EITC)—which is definitely “income-based aid.” And not just in the future; once they have their Social Security cards they can file for EITC benefits for up to three years retroactively.
The EITC is a sliding-scale, income-based, refundable tax credit wherein the federal government subsidizes low-income workers with taxpayer dollars.
Let the Congressional Budget Office explain the EITC:
Refundable tax credits differ from other tax preferences, such as deductions, in that their value may exceed the amount of income taxes that the person owes. Refundable tax credits thus can result in net payments from the government to a taxpayer: If the amount of a refundable tax credit exceeds a taxpayer’s tax liability before that credit is applied, the government pays the excess to that person.
The Tax Policy Center outlines the 2014 maximum payouts: “Families with three or more children may receive a credit of up to $6,143 in 2014. The maximum credit is $5,460 for families with two children, $3,305 for families with one child, and just $496 for those without children.”
The EITC was enacted in 1975 as a way to financially help low-income families. Many economists saw it as a better solution than raising the minimum wage, since doing that makes it harder for low-skilled workers to find or keep a job.
Interestingly, Nobel Prize-winning economist Milton Friedman proposed something similar to the EITC, though he called it the “negative income tax.” He argued that if society wanted to help the poor, giving them the money and letting them spend it as they saw fit was much better than creating a slew or welfare programs. He specifically warned against providing both an EITC and multiple welfare programs—but, of course, that is exactly what the U.S. has done. And kept increasing the minimum wage to boot.
The EITC currently costs taxpayers about $65 billion a year. It is one of the federal government’s largest anti-poverty programs. And you’ll love this: The IRS said it wrongly distributed about $14.5 billion in 2013, according to The Hill.
Of course, if the president’s whole purpose in life is to redistribute income—which apparently it is—the fact that $14.5 billion is being paid out improperly isn’t a problem. It’s a good start!
And one more thing. Obama says that his plan will “hold accountable those undocumented immigrants who have lived in the US for more than five years,” and “by registering and passing criminal and national security background checks, millions of undocumented immigrants will start paying their fair share of taxes …”
Actually, if they are eligible for the EITC, they will start receiving their “fair share of taxes.”
How is it holding illegal immigrants accountable by requiring them to pay taxes when at the same time we give them EITC tax credits that could more than offset the taxes they owe—which will be true for most lower-income eligible immigrants?
And that doesn’t even include the child tax credit, which will redistribute to those families with children thousands more in taxpayer dollars.
Congress should be able to stop this redistribution by passing legislation prohibiting the newly amnestied from receiving EITC benefits—or at least the three-year retroactive provision. It would be interesting to watch Democrats and Obama defend the retroactive handouts.
We are going to have to forget that old maxim that “crime doesn’t pay,” because in Obama’s redistribution economy crime (i.e., entering the country illegally) pays handsomely.