Test Your Poverty and Tax Credits IQ

1
Test Your Poverty and Tax Credits IQ!

• Ann Warshaw and Lucy Gorham

2
Q What does EITC stand for?

• A Earned Income Tax Credit, also known as the
  Earned Income Credit or EIC

3
Q The federal minimum wage is 5.15/hour. How
high would it need to be to make up for the loss
of the EITC and food stamps to working families?

• A More than double, or roughly 10.50/hour.
  North Carolina just rejected a proposal to raise
  the minimum wage to 6.25/hour so we have a ways
  to go.

4
Q What percent of US taxpayers claimed the EITC
in 2005? In NC?

• A About 17 in the U.S., 20 in NC.

5
Q In a recent speech, John Edwards referred to
the practice of poverty profiling. To what was
he referring?

• A Freezing refunds, excessive auditing, and
  requiring that tax filers for the EITC
  pre-certify that their children live with them
  (unlike any other tax benefit).

6
Q What percentage of IRS audits are of tax
filers claiming the EITC?

• A While EITC claimants represent only 17 of all
  tax filers, they represent 48 of tax filers
  audited by the IRS

7
Q Under which President was the EITC instituted?

• A In 1975 under President Gerald Ford

8
Q Which of the following Presidents did not
raise the EITC benefitCarter, Reagan, Bush,
Sr., Clinton?

• A Jimmy Carter. Presidents Reagan, Bush Sr.,
  and Clinton all raised the EITC.

9
Q Low- and moderate-income households receive
roughly 71 billion in tax refunds each year.
What share of this is from the EITC?

• A Over half, or 38 billion.

10
Q How much does the EITC bring into NC each year?

• A Just over 1.3 billion.

11
Q Which one of the following is not eligible to
receive the Child Tax Credit?

• 1. Immigrant workers with only an Individual
  Tax Identification number (ITIN).
• 2. Families earning below 11,000 per year.
• Families with over 100,000 in assets.
• Families earning over 75,000 per year.
• A. Families earning below 11,000/year.

12
Q The bottom 60 of families in the income
distribution earn what of income? What of
wealth do they own?

• A The bottom 60 of households in the income
  distribution earn 23 of income and own just 5
  of wealth.

13
Q For every dollar of wealth owned by White
families in 2002, how much did Black Families
own? And Hispanic/Latino families?

• A For every dollar of wealth owned by White
  families, Blacks owned 7 cents and
  Hispanic/Latino families 9 cents.

14
Q What is the current poverty rate in NC? For
how many years has it been at this level?

• A The poverty rate in NC is 12.9 percent, where
  it has remained stuck for the past 16 years.

15
Q In the early 2000s, what was the average
income of the top 5 of NC families? And of the
bottom 20?

• A For the top 5, average income was 183,253.
  For the bottom 20, 14,884.

16
Q In the early 1980s, the ratio of income
of the top 5 of NC families to the bottom 20
was 7.8 to 1. After the economic boom of the
1990s, what was it in the early 2000s?

• A 12.3 to 1.