Governor Romney's 47% remarks have re-ignited the fight between the so-called "makers" and "takers." But what Romney failed to mention during his candid fundraiser comments was that Republicans are one of the main reasons some households are not paying federal income taxes.
Case in point: the Earned Income Tax Credit. Created in 1975, the program provides refundable tax credits to poor working families, essentially zeroing at their federal income tax bills. It saw a huge expansion in 1986 when President Ronald Reagan--yes, you read that right--signed his Tax Reform Act into law.
"Millions of working poor will be dropped from the tax rolls altogether," Reagan declared. "I'm certain that the bill I'm signing today is not only an historic overhaul of our tax code and a sweeping victory for fairness, it's also the best antipoverty bill, the best profamily measure, and the best job-creation program ever to come out of the Congress of the United States."
The idea of the EITC was not to give poor families handouts. Instead, it was designed to allow people to achieve the American Dream by working. According to the Tax Policy Center, of the 38 million households that didn't pay federal income taxes in 2011, 30% qualified for refunds like the EITC. Based on studies, the credit appears to be doing the trick. According to the Center on Budget and Policy Priorities, the EITC and the Child Tax Credit lifted 8.9 million people out of poverty in 2010.
For a further look at the EITC and the falsities of Romney's 47% comments, check out Alex's discussion with the Washington Post's Ezra Klein.