Tax fraud

The Earned Income Tax Credit (EITC) is one of the most effective weapons to tackle poverty in the working-class population. Unfairly, it is also a favorite target for conservatives to combat tax fraud.

In this case, the fraud that Rep. Dave Camp, chair of the House Ways and Means Committee, is referring to, involves undocumented immigrants who benefit from the EITC. If the Republican congressman gets his way, it would mean that the undocumented could still pay taxes with their ITIN number—but to receive the tax credit, they would have to use a Social Security number.

The proposal makes an important change by deciding to shift the burden to demonstrate eligibility in order to receive the tax benefit from children to adults. Meaning, 73% of U.S.-born children, out of the 5.5 million children born to undocumented immigrants estimated by Pew Hispanic, won’t get the benefit despite being citizens.

A while ago, a similar idea was proposed to pay for the extension of unemployment benefits and then again recommended to adjust military spending.

We think that fighting tax fraud is a good option to obtain funds to finance domestic spending. However, it is best to target the more than $100 billion that companies and individuals remove from the country to evade taxes—instead of $4 billion that would be spent in our country, helping the economy.

It is unfortunate that those who seek to eliminate a tax credit for the children of undocumented workers oppose—claiming privacy issues—measures against tax evasion. Specifically, they are against banks reporting money that leaves the country, which today is required under FATCA.

The undocumented pay taxes, even for benefits they won’t receive, like Social Security. The EITC reimbursement is not fraud; it is what is fair for low-income workers. Fraud is saying you are against fiscal deception, punishing the most vulnerable and then supporting action that contributes to tax evasion.

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EITC ITIN

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