tag:blogger.com,1999:blog-2135788133426971614.post8946807970987103774..comments2024-03-28T01:09:48.303-07:00Comments on 21st Century Taxation: Continuing EITC Problems Contribute to Tax GapProfessor Nellenhttp://www.blogger.com/profile/03288632402197167948noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2135788133426971614.post-62588116629311052822011-02-22T09:22:01.150-08:002011-02-22T09:22:01.150-08:00Eliminating the EITC altogether would eliminate th...Eliminating the EITC altogether would eliminate the tax gap, of course, although that will never happen.<br /><br />The biggest thing that needs to be done is to reduce or eliminate the built-in incentive to earn *no more* than the income that allows you to maximize your credit. It becomes too easy for people to game the system to take advantage of that incentive - and you'd be surprised at the number of people who know almost to the dollar how much they can earn to get that maximum, and come in with W-2s with only that amount of income.<br /><br />If you tied the EITC to withholding, and paid it out over the course of employment during the year rather than in one lump sum at tax time (almost no one that I saw used Advance EITC, probably because it made it harder to game the system), that would probably help - it would shift the compliance burden toward employers, who are a little bit easier for the IRS to police than are individual taxpayers.Anonymousnoreply@blogger.com