Warren Buffett’s solution to income inequality is to expand the Earned Income Tax credit

Yes, this is a weird post and lot of you will be wondering why i am posting this on a blog meant for kids.Well, Income Inequality is something a lot of economists are trying to solve for a long time. It impacts society in many ways – it is not about just affording the next generation iPad or having the ability to take a vacation thrice a year.It is about staying at pace with everyone and be able to put food on the table for your family on a consistent basis.

Raising the minimum wage is one way to solve this.

But increasing the Earned Income tax credit is one solution to the problem.It rewards work.

A tax credit in the United States which benefits certain taxpayers who have low incomes from work in a particular tax year. The earned income credit (EIC) reduces the amount of tax owed on a dollar-for-dollar basis, and may result in a refund to the taxpayer if the amount of the credit is greater than the amount of tax owed.
(borrowed from http://www.investopedia.com/

Go over this video for a better understanding. http://finance.yahoo.com/news/warren-buffett-s-solution-to-income-inequality-could-work-171802051.html

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: