only a few credits are actually “refundable.” What does it mean for the credit to be refundable?

Answer the following questions

 

1-      1- What is the difference between a deduction and a credit in the income tax system?  Which is preferable?

 

 

2-      2- As discussed in the reading, only a few credits are actually “refundable.”  What does it mean for the credit to be refundable?  Looking to the few refundable credits, why do you think the Congress singled these out for special refundable treatment?  What policy or logic do you think was at work?  Do you think they were correct in their thinking?  What possible tax abuse schemes are created by refundable credits?  Do you have any suggestions on how they might provide for these refundable credits but curtail or minimize possible abuse?

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