Do you think most tax credits benefit low- or high-income taxpayers? Why do you think this...

Do you think most tax credits benefit low- or high-income taxpayers? Why do you think this is?

Expert Solution

Tax credit- It is the amount that tax payers can deduct from tax. It reduces the actual amount of tax while other deductions and exemptions reduce the taxable income. Tax credit is given to individuals and business,

it's of following types that include:

Nonrefundable tax credit
Refundable tax credit
Partially refundable tax credit

Yes, I think, most tax credits benefit low income people. Low income group and poor people benefit from the tax credit, if we take the example of Child tax credit, low income families can receive a refundable child tax credit that is equal to 15% of earning or above $2500 up to maximum credit of $1400. All families of low income get the benefit of Child tax credit.

Mostly low income people do not have to pay taxes because they have very less tax liability that is offset by the tax credit and some get substantial rebate via refundable tax credit.

We can say that lower income people get more benefit from tax credit.

ekkarill92 answered 2 hours ago

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