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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Cogito who wrote (95645)	11/13/2008 7:18:17 AM
From: Lane3	Read Replies (2) \| Respond to of 544260

Or I could be wrong. That has been known to happen now and then. I accepted your correction on this because I, too, have been known to be wrong on occasion. But it bugged me. So now I've looked it up. From Wiki. "Tax credits as a form of state benefit Tax credits may be characterized as either refundable or non-refundable, or equivalently non-wastable or wastable. Refundable or non-wastable tax credits can reduce the tax owed below zero, and result in a net payment to the taxpayer beyond their own payments into the tax system, appearing to be a moderate form of negative income tax. Examples of refundable tax credits include the earned income tax credit and the additional child tax credit in the U.S., and working tax credits or child tax credits in the UK. A non-refundable or wastable tax credit cannot reduce the tax owed below zero, and hence cannot cause a taxpayer to receive a refund in excess of their payments into the tax system. Some examples of non-refundable tax credits are the Hope and Lifetime Learning educational tax credits in the U.S. or the former children's tax credit in the UK. Another example would be declared gifts made to registered charities in the UK under the current Giftaid scheme, which attract tax relief (claimed by the charity) at the standard rate but which cannot reduce the donor's liability beyond the amount of tax actually paid by them in a given year. All tax credits in Ireland are non-refundable. Conservatives or libertarians, who generally favor tax cuts, often criticize refundable tax credits, saying that they are actually subsidies disguised as tax cuts. In other words, they are spending in the form of direct transfers from the treasury to individuals, except that they are administered by the tax authorities rather than the agencies usually responsible for welfare." The only tax credit I ever personally considered was the one for installing replacement windows. There's no indication in the description that it is refundable. I'm pretty sure that the basic idea behind them, the historical framework, was that tax credits are not refundable. But when they started using tax credits as a vehicle for poverty programs, they had to make those tax credits refundable. I suspect that the default for tax credits is that they are not refundable.