Originally posted May 21, 2015.
Leave it to good ole’ Warren Buffett to create a stir. In a recent op-ed in The Wall Street Journal, he calls for an expansion of the Earned Income Tax Credit (EITC) to help low-income workers. How about a reduction in the size of government instead Mr. Buffett? Let workers keep more of what they make and this economy would be much better off. If government is such a great wealth transmission system, why not donate your money to the Treasury rather than the Bill and Melinda Gates Foundation?
Elite businessmen like Buffett do nothing to help this economy when they forget about the successful workers who helped them get there. As it is, the successful already pay far too much of their hard-earned income into worthless government programs like the EITC. A “better” EITC simply creates an increased incentive to game the system. I like what this reader has to say in the comment section:
Mr Buffett is either coy or fails to consider how the worker who is around the top of the bracket of the EITC will behave. I did taxes for a single parent with two kids, I told her if she cut her hours down from 40 to 32 a week that she would gain about 30% of the earnings back with a much higher EITC and lower state taxes. She choose to cut her hours. Businesses will cut back raises, and some employees will cut back hours just to get the freebies, which now includes Obamacare subsidies. It is a perverse incentive to work, but only work just enough to maximize the freebies.