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Stimulus gone bonkers

February 06, 2009

It's not as if we haven't been "stimulating" for a long time. The Treasury Inspector General for Tax Administration released a report on how well the continuing "stimulus" of the Earned Income Tax Credit, a sort of negative income tax for low-income earners, is going:

The report concludes that the IRS has successfully developed processes to identify erroneous EITC payments prior to their issuance to taxpayers. However, the IRS estimates that between $10 billion and $12 billion in erroneous EITC payments were made in Tax Year 2006. This estimate was based on data for Tax Year 2006, which was the latest data available at the time the audit was conducted. The IRS received $43.7 billion in EITC claims during that time.

This is a preview of how well "stimulus" is likely to be spent and how well "targeted" tax provisons hit their mark.