The federal earned income tax credit is supposed to help the working poor rise above the poverty level. It has probably done some good in that area; however, it has definitely helped several tax return preparer/loan companies soar to the heights of profitability.
Tax return preparers and lenders get about $1.75-billion in fees for lending money against anticipated earned income credit refunds, which total about $30 billion a year. This data is part of a report recently issued by the Brookings Institution and the Progressive Policy Institute based on their analysis of IRS data. The study found that nearly 7