[Congressional Record Volume 149, Number 60 (Saturday, April 12, 2003)]
[Extensions of Remarks]
[Page E778]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   INTRODUCTION OF LEGISLATION TO EXPAND THE EARNED INCOME TAX CREDIT

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                          HON. XAVIER BECERRA

                             of california

                    in the house of representatives

                         Friday, April 11, 2003

  Mr. BECERRA. Mr. Speaker, the earned income tax credit (EITC) 
provides cash assistance to lower income working parents and 
individuals through the tax system and is an important part of the 
Federal ``safety net'' of programs for Americans living in poverty.
  Under current law, there are three categories of EITC recipients: 
those with no children, those with one child, and those with two or 
more children. One does not need to owe taxes at tax time in order to 
benefit--the EITC benefit amount may exceed tax liability and be 
received in the form of a payment from the U.S. Treasury after the tax 
year's end. Moreover, certain eligible workers with children may choose 
to receive a portion of the EITC in the form of advance payments 
throughout the tax year.
  While the EITC has been tremendously successful and has lifted more 
children out of poverty than has any other government program, I 
believe that our efforts to use this important tax credit to fight 
poverty can be further improved. Recent studies have shown that 29 
percent of all children in families having three or more children 
subsist at incomes below the poverty level. This is more than double 
the poverty rate among children in smaller families. Nearly three of 
every five poor children in this country live in families with three or 
more children. Our former colleague Rep. Bill Coyne introduced 
legislation during the 107th Congress that targeted this particular 
problem and made other needed improvements to the EITC program. Today I 
reintroduce that bill.
  The bill will create a new EITC benefit level for families with 3 or 
more children, with a credit percentage of 45 percent, to provide a 
higher benefit than what they currently receive under the ``two or more 
children'' category (which has a 40 percent credit rate). The bill 
would also double the credit percentage for workers with no qualifying 
children from 7.65 percent to 15.3 percent. This change recognizes the 
fact that there is virtually no safety net for people in this category, 
who face high federal tax burdens. The 15.3 credit percentage is the 
amount needed to fully offset the amount of the payroll tax, including 
the employer's share.
  In addition, the bill will increase EITC benefits for all family 
categories by raising the maximum creditable earnings used to calculate 
the credit. For all eligible individuals with children, this amount for 
the year 2002 will be $10,710, the annual wages of a full-time worker 
earning the minimum wage. For childless workers, the maximum creditable 
earnings will rise to $6,000, approximately 60 percent of those wages. 
In order to balance program costs, benefits will phase out at the same 
income level, as is the case under current law.
  The creation of the additional EITC category involving three or more 
children will benefit approximately 3.2 million households and further 
reduce poverty among these larger families. The economic stimulus 
function of my bill cannot be overlooked, as it will benefit the U.S. 
economy by providing additional incentives for more people, especially 
low-income women, to join the work force.
  Mr. Speaker, at a time when our country is facing so many economic 
challenges, we must not forget that our low-income families continue to 
remain at the margins of our economy and are the first to suffer the 
effects of an economic downturn. I urge all my colleagues to join me in 
this effort to further enhance the highly successful EITC by 
cosponsoring this legislation.

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