Talk:Tax credit/Archive 1

Archive 1

Tax credits in the UK

The the things that tax credits are definted as in this article - items treated as payments already made - do exist within the UK tax system - but Working Tax Credit and Child Tax Credit aren't tax credits in this sense. So the article is a bit misleading as it stands. Tax credits and income tax are completely separate in the UK, and a credit on one can't be offset against a liability on the other.

The article currently says So it should be questioned why simply raising the personal allowance can not do the same for single workers with reduced administrative burden for both employers and the Inland Revenue. The reason is simple. Unlike most income tax allowances, Working and Child tax credits are means tested. If you have savings much over 50K, you don't get them. In that sense they're more like a state benefit than a form of tax - though the government prefers not to call it a state benefit.

Also, your tax credit entitlement has a cash value. Although tax allowances have a cash value if your income is within a certain band, its cash value will be different if your income rises or drops into a different band - but this does not apply to tax credits. Many people who work for part of the year only, and are unemployed for the rest of the year, will pay no income tax at all for that year, yet may still be entitled to some tax credit payments.

Maybe I'll get round to editing the article some time and create separate articles to explain this properly, unless someone else does it first. Squashy 02:24, 17 November 2005 (UTC)

"If you have savings much over 50K, you don't get them" in the above post is incorrect, any savings you have is not included. Only the interest made on those paymnets is. Peledavid 13:35, 3 October 2006 (UTC)

"Poverty trap"

There's a paragraph on the idea that refundable tax credits are a kind of "welfare trap". I took out some material that was very UK-specific, too POV, and not really about the tax credits. The paragraph still needs citations, but I'm pretty sure that the claim has seriously been made and seriously disputed.

I agree with Saluton that this article should be about the concept in general, independent of nationality, and link to specific national programs like the EITC in the US or the programs in the UK and elsewhere.

Mark Foskey (talk) 02:08, 22 October 2008 (UTC)

Also there are tax credits like the Earned Income Tax Credit in the US and the Working Tax Credit in the UK which are specifically designed to balance incentives so that people don't fall into the welfare trap, and are encouraged to work.

However, tax credits based on yearly income encounter other problems like tax credit overpayment, underpayment, and underutilization.

--Yefrem (talk) 18:03, 17 March 2009 (UTC)

Tax Credit Problems

Does anyone think that it would be useful for a paragraph on the difficulties caused by tax credit overpayments/administration in the UK?[1] --ScMeGr 02:02, 16 January 2007 (UTC)

I think that detail on the problems in the UK would be better placed in the Working tax credit article. I think it's slightly off-topic in this article. Perhaps it would be better to have a section explaining the kinds of problems that can take place with overpayment worldwide, refering to the particular troubles in the UK as an example.Saluton (talk) 23:18, 6 August 2008 (UTC)

see tax credit overpayment --Yefrem (talk) 18:07, 17 March 2009 (UTC)

Proposed expansion re: US; restructure by type of credits

I propose a significant expansion of the article, especially with respect to tax credits in the U.S. Following is my proposed outline, for comments:

• Intro
• Credit for payments (will retain the UK portions of current article & put here): to include withholding at source (globalized)
• Individual income tax credits
  • Low income subsidies, including the UK items in present article
  • Family relief (e.g., child credit, etc)
  • Education, energy & other subsidies
• Business tax credits (income & property)
• Foreign tax credit (little more than xref to article on same)
• Credits for alternative tax bases (AMT, IETU & former Mexico asset tax, IVA, etc)

Comments here greatly appreciated. I will post a draft of the new article on my talk page for 2 weeks prior to making changes to this article. Regards,Oldtaxguy (talk) 02:48, 20 May 2010 (UTC)

Draft posted on my talk page.Oldtaxguy (talk) 20:06, 22 May 2010 (UTC)

Over-expansion of U.S. Federal business credits

I believe the extensive coverage of U.S. Federal business credits may be excessive. The article already is far too skewed toward U.S. matters. I will insert appropriate headings and re-order a bit. Trimming may be in order. Discussion welcome, please post here. Oldtaxguy (talk) 23:11, 10 November 2010 (UTC)

Unreferenced copy and paste from a website.

I don't really know how to go about fixing this without doing a lot of work that I don't have the time for right now, but I just noticed that a large portion of this article is copied and pasted from the Foss & Company website. As you can see, sections 4.2-4.5 appear to come directly from that page. It happened a while ago. I went through the revision history and found that an unregistered user added it in November of 2010. Since then some helpful editors noticed there was a need for references, and a couple of legitimate ones were added, but the overall wording is still nearly identical. - Lambajan 18:11, 12 February 2012 (UTC)