EXPANSION AND SIMPLIFICATION OF THE EARNED INCOME TAX CREDIT (EITC)

WHEREAS, the EITC is designed to reward employment for low income families struggling toward self sufficiency and to reduce poverty; and

WHEREAS, low income working families may be eligible for an EITC cash refund of over $3800 per year with the average EITC refund of $1500; and

WHEREAS, the EITC has been proven effective with the most recent data showing 19.2 million low income tax payers claiming $31 billion in credits, $26 billion of which was refunded in cash up from $7.5 billion in 1990; and

WHEREAS, if all low income working families who are eligible for the EITC were to apply for it, an additional $30 billion could be pumped into our national economy; and

WHEREAS, EITC cash refunds do not only benefit low income working families but also provide a significant economic development boost in our cities because recipients spend their refunds in their communities; and

WHEREAS, according to a recent survey, as many as 20% of eligible low income working families do not take advantage of the EITC either because they are not aware that they are eligible or the filing process is too complicated; and

WHEREAS, aggressive outreach efforts, in conjunction with the IRS, have been demonstrated to be effective in informing families of their eligibility for EITC and increasing the numbers of eligible families who actually apply for the credit and receive the much needed benefit; and

WHEREAS, efforts to greatly simplify the EITC, such as the Simplified Family Credit proposal that incorporates the EITC, the Child Tax Credit, the Dependent Exemption and the Additional Child Credit into one easy-to-claim credit, are being reviewed in Congress;

NOW, THEREFORE, BE IT RESOLVED that The U.S. Conference of Mayors calls on Congress to expand the EITC and provide additional flexibility, and funding, for aggressive outreach efforts in conjunction with the IRS; and

BE IT FURTHER RESOLVED that the U.S. Conference of Mayors urges Congress to look for ways to significantly simplify the EITC, such as the Simplified Family Credit.