The large number and size of refundable tax credits is a substantial factor. Democrats have given refundable and non refundable tax credits like candy. They have created a vicious tax system in which almost 50% of the population pay little or no federal income taxes and the top 5 to 10% have confiscatory tax rates. This system creates dual incentives for non compliance and lack of effort. At the low end, working more results in loss of lucrative tax credits. At the top end, working more means entry into confiscatory taxation. Some of these refundable tax credits are given without regard to income for Democrat priorities such as renewable energy. These tax credits are misallocating scarce resources for areas with little potential for economic viability.
“This system creates dual incentives for non compliance and lack of effort.”
Brilliant, isn’t it?!