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I understand the concern here, but a few quick points:

(1) Though EITC is currently done once a year, it is relatively easy to change it to a quarterly system.

(2) The marginal tax paid will not be a large amount. It would probably be several tens of dollars per month.

(3) Depending on jurisdiction, "food and medicine" is often construed narrowly. Thus certain items we think of as "food" are actually taxed anyway because they aren't "food as defined by the taxing authority." Think soda, Doritos, or candy. Food items? Yes. Taxable? Depends on your jurisdiction.

(4) The marginal tax paid will be offset by lower taxes paid on everything else. On net, we cannot say if people will pay more or less. That calculation depends on the composition of goods that each individual buys.

(5) Filing status is determined by several factors. This started as my own Maryland-specific recommendations, and I'm not willing to do the research to make specific informed comments about DC's income tax filing compliance. However, if the Government wants to make it easier to file, they can. Many of my other suggestions were designed to do that.

(6) How much people pay under this tax is determined by the incidence of the sales tax. There is good reason to believe it ultimately falls on the consumer, but also good reason to believe some part will fall on corporate shareholders, farmers, or distributors. Ultimately, I tried to present at worst case, where the whole tax falls on consumers.

(7) I also see you're running for the At-Large Council seat. Good luck, but please pass CPA Mobility legislation!

by WRD on Feb 27, 2011 5:10 pm • link • report