Tax

There are two types of tax credits and they are refundable and non refundable. The child tax credit is an example of refundable. The credit is $2,000 for each child under the age of 17. The taxpayer gets this money even if no tax is owed. The $7,500 tax credit for the purchase of an EV is an example of non refundable meaning that you only get the credit if you owe taxes. Most people who buy a $50,000 EV owe some taxes so they get a tax break. Say you own $10,000 in taxes your credit means you only pay $2,500. The same thing is true for the 30% tax credit on solar panels. If the cost of solar panels is $60,000 you get a credit of $18,000. The people who qualify for this credit are people with high incomes and most low and middle income people do not qualify. Once you install solar panels your cost of electricity is not only free but you can sell the excess back to the power company. This means they have to raise the rates to cover the buy back which means that the rich people who can afford the panels are causing the prices to increase on the poor and middle income groups. One of the best ways to fight income inequality is to increase the child tax credit. A single mom with one child working part time and earning $20,000 per year will pay no income tax and get a refund check for $2,000.