Earned Income Tax

Gov. Martin O'Malley's concern is trying to eliminate a $1.7 billion budget shortfall, but his tax proposal unveiled last week might have unintended consequences on the behavior of the rest of us. People are funny about taxes. We take all sorts of measures to sidestep them. Sometimes those measures cost us more than the taxes we'd otherwise pay. Take the investor who won't sell a stock destined to crater because he doesn't want to pay capital gains tax. If taxes go up in Maryland - and that's a safe bet - you can be sure there will be people trying to lessen the bite.

You can grouse and gripe all you want about the IRS. But does anyone listen? As it turns out, Emilio Cecchi does. The Rockville retiree is among more than 90 volunteers across the country who serve on the Taxayer Advocacy Panel. Their job: listen to taxpayer complaints and suggest ways for the IRS to do better. Volunteers log 300 to 500 hours a year. Cecchi, 57, says he volunteered for the panel after retiring in 2005 from a marketing and sales job. He was surprised to learn early on that taxpayers want to avoid the IRS so much that they won't even open a letter from the agency, even if it might contain good news.

IT'S creating class warfare. It's soaking the rich.That has been the rhetoric since the compromise budget plan squeaked through Congress.If you are among the 1.2 percent of Americans who are the top wage-earners in the country, it's understandable that you would be unhappy with the prospect of higher taxes on your hard-earned money.But let's look at the flip side -- those working families now at or near poverty.Thanks to this budget, working families that earn up to about $25,000 a year will get an increase starting next year in their earned income tax credit.

AUSTIN, Texas -- Some days, you have to believe right-wing ideologues have lost touch with reality completely. Their latest proposal to prevent future Enrons is -- ta-da! -- cut the capital gains tax. And exactly what does that do to prevent future Enrons? Nothing. Except Ken Lay won't have to pay taxes on the stock he sold while his company cratered and his employees watched their life savings disappear. Enron & Etc. are not the consequence of a few greedy executives cutting corners -- they are the result of a series of deregulatory measures and other changes in the law that set up the opportunity for theft on a staggering scale, making it not only possible but inevitable.

This is tax season. Predictably, we are being bombarded with advertisements for same-day tax refunds by commercial tax-preparers selling high-priced refund loans and predatory tax preparation products. If only the advertising for the earned income tax credit (EITC) were as powerful and far-reaching as these commercial offerings, thousands of eligible taxpayers could receive the EITC and enjoy access to free tax preparation. EITC-eligible taxpayers filing their 2006 returns can receive a federal tax refund of up to $4,536 and a state tax refund of up to $907.

BATON ROUGE -- John B. Breaux, friend of Bill Clinton, ally of Louisiana's energy industry and the senator who figures to broker the deal that will save the president's energy tax, couldn't resist invoking the Kingfish.Pointing from a window in his 20th-floor office to Huey Long's statue on the state Capitol grounds, Mr. Breaux noted that the legendary governor is buried beneath the monument and that his likeness faces the state house to make sure the legislators "don't screw up."Mr. Breaux predicted that after the Senate Finance Committee votes on the tax bill later this month, "I'm going to be buried right next to him -- facing down into the ground."

At the end of his speech Wednesday night, President Clinton asked the audience to judge his plan not so much according to what's in it for "you and me" but according to what's in it for "us." That's certainly the better criterion. But before you can apply it, you have to decide what you think is most in the national interest.There are four major economic goals embedded in President Clinton's budget plan: deficit reduction, fairness of sacrifice, near-term job creation and long-term economic growth.

The latest statistics last week from the Census Bureau are grim. Household income has fallen sharply; poverty is up. And that's based on data from a year ago, when employment was in better shape. Even more so now, every penny counts. So is there any way to get extra money in your paycheck without asking the boss for a raise? One way is to get an advance on the Earned Income Tax Credit, a credit worth thousands of dollars to lower-income workers. Usually, people claim the credit on their tax returns.

REPUBLICAN leaders are about to do something so stupid and venal that maybe they don't deserve to retain control of Congress in this year's election. They want to make Puerto Rico the 51st state in the union, and next week, the House will vote on a measure to start the process. Why? Expect to hear plenty of platitudes about self-determination and full democracy for Puerto Rico's 3.7 million people. But what the Republicans are really interested in is the potential votes of some 25 million Hispanics on the U.S. mainland.

The Internal Revenue Service is offering extended walk-in service at the Fallon Federal Building in Hopkins Plaza, Baltimore and Hanover streets, on Saturdays in March and April.The schedule includes the remaining three Saturdays of this month, April 4 and April 11. The service will be available from 9 a.m. to 3 p.m.On March 28, April 4 and April 11, IRS employees will assist low-income and elderly taxpayers -- as well as those eligible for the Earned Income Tax Credit -- with tax returns.