I know a woman who is unmarried and has a 10-year-old son. She’s in her mid 30’s, has no skills, and is, for all practical purposes, unemployable. Her income for the past few years has been next to nothing. She has paid almost no taxes for nearly five years.
You might be tempted to feel sorry for her. She is, on paper anyway, well below the poverty level.
If you only looked at her tax returns, you’d probably imagine her to be penniless. Based on her income alone, she qualifies for every single government program meant to help poor people. In fact, she recently received a letter from The White House telling her she can expect to see her full share of the “Child Tax Credit” soon.
With little to no income, she can’t afford her own home. So, she lives with her elderly father.
On paper, she is living in poverty. But she is far from poor.
To be honest, she doesn’t actually live with her father. She and her son share their own house located on her father’s ranch. The house, and the few acres that surround it, come with a panoramic view of the Pacific Ocean.
Her dad pays for everything. He owns the house, and he pays for all the utilities. He paid for the new Mercedes she drives as well as the electric Audi parked next to it. He pays to send her kid to a private school, and he pays the family accountant to prepare and file his daughter’s income tax returns every year.
On top of all that, he gives her $10,000 per month as an “allowance” to use as walking around money.
With the money burning a hole in her pocket, she buys her kid every toy imaginable. He wanted a puppy, so she paid thousands of dollars to import some exotic breed of dog that is now mostly ignored by the both of them. In addition to her designer-label dog, she pretty much pays cash for whatever other designer-labeled thing she desires.
This woman isn’t struggling to put food on the table. Life isn’t a struggle for her at all. It never has been. Yet, she qualifies for the full “Child Tax Credit”. And soon it will be on the way.
She’s a great example of what I told you about yesterday. Joe’s “Child Tax Credit” isn’t a tax credit at all. It’s a government handout. A true tax credit can never be larger than the amount of taxes someone has paid, or is expected to pay.
And don’t call it a tax refund either. This woman pays hardly any taxes, yet she’s going to get thousands of dollars back. Well, not “back”, per se. Because “back” implies that she paid those taxes in the first place. Which she didn’t.
Although it’s true that she qualifies for all types of government assistance, she’s not the type of person to take advantage of any of it. I doubt she even knows that, in the eyes of the government, she’s considered to be destitute. When she receives her “Child Tax Credit” checks in the mail, I’m pretty sure she’ll just return them.
Here’s the thing: Not everyone who gets money they really shouldn’t is going to be willing to give it back.
How many millions, if not billions of dollars will be sent to people who are wealthy enough to appear, on paper, to be poor? Just like this poor little rich girl.
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