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Rangel Introduces EITC For Childless Workers Act Of 2014

Feb 28, 2014 Issues: Economy, Taxes, Working Families

WASHINGTON, DC – Today Congressman Charlie Rangel (D-NY) introduced a bill to expand the Earned Income Tax Credit (EITC) to cover even more hardworking Americans. The EITC is a federal program that provides a refundable tax credit for people whose incomes are below or at the poverty line. Congressman Rangel’s bill will decrease the qualifying age for single people from 25 to 21, increase the benefits for childless workers, and index the benefits to inflation.

“This bill gives young people a way to work their way out of poverty,” Rangel said. “I have been fighting to protect and expand the EITC for the past 30 years, and I’ll keep doing so until every worker earns a living wage that allows them to pursue the American Dream. By providing childless workers a little boost to help them succeed, this bill can stimulate economic growth, which is a win-win for America.”

Currently, the average one child family receives $2,101 a year while the average childless adult receives $270 a year. Because of this discrepancy, a single childless adult making $11,905 in 2013 would face a federal tax burden of $1,826, making it the lone group that is taxed deeper into poverty by the federal tax system. Not only will Rangel’s bill boost the tax credit that single adults receive, but it will also make people from ages 21 to 25 eligible for the EITC.

"While the EITC has consistently provided relief for working families with children, it has largely excluded childless workers from the benefits it affords," said Rangel. "Because of this hole in the EITC, single childless adults are taxed deeper into poverty by the current federal tax system. Expanding the EITC will promote work, reduce poverty, and supplement income for young people who are already burdened with rising costs in education and scarce job opportunities. "

The EITC kept 10 million people out of poverty in 2012. It is estimated that 300,000 childless workers would be lifted out of poverty and the severity of poverty would be reduced for 3.8 million others.

Rangel fought for the biggest ever expansion of the EITC in the Tax Reform Act of 1986, and he has since led the effort to expand and improve the EITC, one of the largest and most successful anti-poverty measures in the nation. In 2007, he included provisions to extend EITC to low-income working adults without children in his tax reform plan released by the Ways and Means Committee when he was Chairman. 

*The announcement of Rangel's bill to extend EITC comes a day after Ways and Means Committee Chairman Dave Camp released the Republican proposal on tax reform that weakens the EITC. President Barack Obama, in his 2014 State of the Union address, called for expanding the EITC for workers without children. The City of New York, which has its own program, this year expanded the EITC for low-income single workers without children, allowing them to claim up to $2,000 a year over three years with earnings up to $26,800.

Highlights of Rangel's EITC for Childless Workers Act of 2014:

  • Drops the qualifying age to 21 from 25
  • Raises the maximum EITC a childless adult can receive to $1,500 (currently $496)
  • For single and no children, phase-out begins at $16,630 (currently $8,110) and ends at $23,110 (currently $14,590)
  • For married childless workers, phase-out begins at $24,630 (currently $13,540) and ends at $31,110 (currently $20,020)
  • Indexed to inflation
  • Extends refundable EITC to the residents of U.S. possessions, including the Commonwealths of Puerto Rico and the Northern Mariana Islands.