This is a discussion on 2012 Earned Income level within the Current Events forums, part of the US Discussion category; On the new Federal tax form for 2012, the Limit on earned income credit is: Adjusted gross income is less than $13,660 for single filer ...
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2012 Earned Income level
On the new Federal tax form for 2012, the Limit on earned income credit is:
Adjusted gross income is less than $13,660 for single filer and
Adjusted gross income is less than $18,740 for married filing jointly.
There is no $400 "Making Work Credit" that was on last years form.
The result is for low income workers (they must have worked during the year) their returns will bill considerably less (For low income workers $400 is considerable) when they file. This is a considerable portion of the population and the loss of buying power by this segment will definitively have an effect on the economy, especially with rising fuel prices. Gas is over $1 more a gallon this January than last and if it follows the same pattern as last year it will be $5 a gallon by May stunting whatever growth we are encountering now.
High gas prices = less spending on other things. Lower tax returns = less spending.
Less spending = higher inventory
higher inventory = less production
less production = layoffs and unemployment.
Forecast: The economy after a modest increase in the first part of the year falls back into a recession in the summer, mainly due to fuel prices.
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