The leaders in the Iowa Senate are pushing to increase Iowa’s Earned Income Tax Credit from 7% of the federal credit to 20%. A report on the federal credit from the Treasury Inspector General for Tax Administration should give them pause:
The IRS estimates that 21 to 26 percent of EITC payments were issued improperly in Fiscal Year 2011. This equates to $13.7 billion to $16.7 billion in EITC improper payments.
It should give them pause, but it won’t.
Related: Incentives to stay poor
TIGTA link via the TaxProf.