Friday, February 11, 2011

$12 billion

That's how much is paid by IRS in bogus claims of the earned income tax credit.  Every year. A 25% error rate.

I believe that $12 billion is  significantly more than the amount expected to be collected by the federal estate tax this year and next.  My quick search showed that in December 2009 the CBO expected federal estate tax collections of $31.7 billion in 2012 (with the then-scheduled $1 million exemption).  The JCT scored the increase to a $5 million exemption as costing $28 billion in 2012, which leaves a net of $3.7 billion to collect.

Think of all the economic activity generated for lawyers and accountants to bring the estate tax down to that $3.7 billion in collections.  Do we get a similar bang for our EITC buck?

Does anyone have a better number for  projected estate tax revenue?

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