WASHINGTON Feb 9 U.S. President Barack Obama on
Tuesday proposed expanding the earned income tax credit (EITC),
which helps low-income taxpayers, to give a bigger boost to
Some Republicans as well as Democrats in Congress back
increasing the tax credit. House of Representatives Speaker Paul
Ryan, a Republican, favors expanding the credit as an incentive
for pulling people into work.
In his budget blueprint for the fiscal year starting Oct. 1,
Obama proposed doubling the tax credit for workers who are not
raising children, bringing the credit to a maximum of about
$1,022 a year for them.
He said it should be expanded to cover workers with earnings
up to 150 percent of the poverty line, so about $18,180 for a
single person. Under current law the cutoff comes at about
Obama also favors expanding eligibility to single workers
between ages 21-24 to help draw them into the workforce;
currently they must be 25 to qualify.
The Earned Income Tax Credit, created in 1975, is intended
to promote work as well as help low-income people. Because it is
a refundable credit, it produces a refund if the taxpayer does
not owe any taxes.
Currently it gives more generous benefits to families with
children. Obama has proposed expanding it for the past two
years; Ryan agrees it should be increased for childless workers.
But they disagree on how it should be funded. Obama has
talked about closing tax loopholes, while Ryan has talked about
Obama's budget proposed making the credit available to
workers aged 65 and 66, and to workers in the struggling
territory of Puerto Rico.
The White House said its proposal would help 13.2 million
low-income people. The Congressional Research Service (CRS) said
recently that in 2013, a total of $68.1 billion was claimed by
28.8 million tax filers under the program.
But it said the rules were too complex and up to a quarter
of payments were issued "improperly".
Obama's budget also proposed $12 billion over 10 years to
supplement food stamps for poor families when school meal
programs are closed in the summer.
It asked for $2 billion in emergency aid for families in
crisis, a $1.2 billion increase in rental assistance to poor
families, $328 million in education and housing grants to poor
neighborhoods, and a $15 million pilot program to help poor
families move to better neighborhoods.
(Reporting by Susan Cornwell; Editing by Chizu Nomiyama)