Refundable tax credits
I have been surprised how recent news about people’s tax refunds often omits discussion of refundable tax credits. I shouldn’t be surprised. I didn’t know anything about them until I became a volunteer tax preparer. Like the news articles, I thought people got refunds because they had more money withheld than they owed in taxes.
That is only part of the story. About one in five tax filers qualify for the Earned Income Credit. This year, almost all families qualify for the Child Tax Credit. These refundable credits were designed to put money in the pockets of low and moderate-income workers, especially those who have children.
Consider the case of Tom and Jane, a married couple with two children: They earned $25,000, just under the official poverty level. They take the standard deduction of $24,000 and are left with $1,000 in taxable income. Their tax is $100.
If their children are under age 17, they can take a Child Tax Credit of up to $2,000 per child, of which $600 is non-refundable. Tom and Jane can only use $100 of the non-refundable part because that reduces their tax bill to zero. The remaining $1,400 per child is refundable, giving Tom and Jane a refund of $2,800.
Tom and Jane can also claim the Earned Income Credit. With their family size and earnings, this refundable credit is worth $5,574. Adding that to the Child Tax Credit yields a refund of $8,374 plus any federal income tax that was withheld. Their income for the year has increased by a third.
Let’s compare this with the tax return of Will and Sandra, who also have two children, but earned $50,000: Their tax is $2,742. They can take the full $4,000 Child Tax Credit, zeroing out their tax and qualifying for a refund of $1,258. They are near the limit for the Earned Income Credit and qualify for only $309. Their refund is $1,567 plus whatever federal tax was withheld.
These refundable tax credits make a big difference in the tax returns and the lives of low and moderate-income families.
In support of Rep. Omar
Dear Representative Omar,
I’m a 11th generation American. I want to thank you for your courage, honesty and integrity during these troubling times in our country.
After reading about your journey from Mogadishu to Washington, I add a deep sense of admiration as well. You exemplify the ideals my ancestors and many others envisioned for this country.
A few years back, I donated to Rhode Island Historical Society, part of a military uniform my grandfather (fifth) wore in 1778 battle for Rhode Island.
He was a farmer, politician, father of six and militia commander of 128 fellow patriots.
In early 1776, a large British Fleet was visible from his farm. The mightiest military power in the world at the time. On May 4, 1776, as a member of the General Assembly, they declared absolute independence from Great Britain.
I can only imagine the extraordinary courage it took for him as a politician and father to challenge the extraordinary power offshore of his farm and a direct threat to his family and neighbors. Just breathtaking.
A very powerful fleet rests just off your shore. Please keep up the good fight.
The country is better for it. Godspeed. Count me a supporter.
Smoking is bad
Hi, I’m Georgia Tate and smoking is bad for you and everyone around you. No business should allow smoking because secondhand smoke is as bad as firsthand smoke. I care for clean air!
Hi, I’m Mason and I think smoking is bad. I care for clear air and there should be no smoking.
Thanks to volunteers
Here’s a big shout out to all the volunteers who kept the warming shelter open this winter. If not for them — and Riverside Community Church — how many of our unhoused neighbors might have died this bitterly cold week? I hate to imagine.
Call to action
The Green New Deal (GND) has brought needed energy and attention to the climate debate. At the same time, it is more aspirational than achievable. What we desperately need is climate policy focused on affordable, actionable strategies for reducing global emissions that can be passed by this or the next Congress.
Reducing CO2 emissions will be expensive, very expensive. Spending on climate action will compete for funding with other important priorities in a budget with projected trillion-dollar annual deficits. Climate policy should focus on least-cost strategies for reducing “global” emissions rather than focusing solely on U.S. emissions or overreaching to a list of progressive ideas.
The U.S. contributes around 14 percent of global emissions, and it won’t be enough to reduce or even eliminate our emissions. Our policies need to include environmental tariffs or other inducements pushing developing counties to limit their emissions.
A least-cost approach should invest in global efforts, like reforestation and hydro development, rather than wringing out the costly last ton of U.S. carbon emissions. It should redirect existing subsidies, like those for biofuels, to the most cost-effective projects and use carbon taxes to encourage market innovation and fund research on carbon capture.
Tying the GND to a larger social agenda or unrealistic and unaffordable goals will not lead to meaningful climate action. The urgency of the crisis requires us to focus to what is achievable and affordable. It may also require sacrificing environmental purity around nuclear plants, natural gas generation and dam removal.
The Green New Deal is a call to action. We should not let the perfect stand in the way of acting now.
‘Save its soul’
Trump’s folly? Hogwash? Dangerous?
These were the titles of articles written on Feb. 3, 2019. I think they need an answer. First, to “Dangerous,” how dare you say we residents of the United States and spew your warped view of our President of the United States.
We residents voted for him and won. Now is the time for you and the other two to get over it. He won because of what he stands for, and what America has stood upon for the last 250 years.
As the Declaration of Independence was being signed, Samuel Adams declared: “We have this day restored the Sovereign Lord to whom all men ought to be obedient. He reigns in heaven and from the rising to the setting of the sun.”
President Woodrow Wilson said in 1923: “Our civilization cannot survive materially unless it is redeemed spiritually. It can be saved only by becoming permeated by the Spirit of Christ and being made free and happy by the practices that spring out of that Spirit.” I urge you to read the Bible.
Second, “Hogwash.” I pray the newly-elected Democrats in congress are doing a reality check. Their only platform so far is “destroy Trump.”
And third, to “Trump’s folly.” Your concern is for everything that might happen or is happening to “Mother Earth and make fun of his reference to abortion.
Hitler murdered over 6 million Jews and everyone agrees that was a heinous crime against humanity.
America has murdered (aborted) over 60 million babies since Roe v. Wade. And you make fun of that.
Mother Teresa said, “a Nation that kills its children in the womb has lost its soul.”
Trump is trying to save its soul.
Pastor Mike Harrington
Editor’s note: Samuel Adams’ full quote is, “We have this day restored the Sovereign, to whom alone men ought to be obedient. He reigns in Heaven, and with a propitious eye beholds his subjects assuming that freedom of thought, and dignity of self-direction which He bestowed on them. From the rising to the setting sun, may His kingdom come.”