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The Corner

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Liberal Economist Wanted...



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…to explain the following from today’s Washington Post:

“The dust-up centers on an obscure provision in the 10-year, $1.35 trillion tax cut that Congress passed in 2001. That tax cut expanded the $500-per-child tax credit to $1,000, but it also made another child credit available as a tax refund to some poor families who pay little or no federal income taxes.”

Explain the following media math problem: A family pays no federal income taxes, but have been receiving a federal tax “refund.” How is that possible?

Please show your work.



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