Which of the following policies provides a Tax refund on all or part of a poor family's Social Security Tax?

The correct answer is Earned Income Tax Credit.

Key Points

• The Earned Income Tax Credit (EITC) is a refundable tax credit for low- to moderate-income working individuals and families, particularly those with children.
• The credit amount depends on the recipient's income and the number of children they have.
• It is designed to encourage and reward work as well as offset federal payroll and income taxes.
• Eligible individuals can receive a tax refund even if they do not owe any taxes.

Important Points

• The EITC is available only to those who work and earn income, and it varies based on marital status, number of children, and income level.
• It has been credited with lifting millions of people out of poverty each year, particularly children.
• The EITC was first enacted in 1975 under President Gerald Ford, and it has been expanded multiple times since.
• To claim the EITC, individuals must file a tax return, even if they do not owe any tax or are not required to file.

Additional Information

• Temporary Assistance to Needy Families (TANF): This is a federal assistance program that provides financial help to low-income families. It is designed to help needy families achieve self-sufficiency through temporary financial assistance and work opportunities.
• Food Stamps: Officially known as the Supplemental Nutrition Assistance Program (SNAP), it provides financial assistance for purchasing food to low- and no-income people. It aims to alleviate hunger and malnutrition.
• Supplemental Security Income (SSI): This is a federal income supplement program funded by general tax revenues (not Social Security taxes) designed to help aged, blind, and disabled people, who have little or no income. It provides cash to meet basic needs for food, clothing, and shelter.