The U.S. Conference of Mayors
2007 ADOPTED RESOLUTIONS
JOBS, EDUCATION AND WORKFORCE

USING THE TAX CODE TO HELP LOWER INCOME FAMILIES DEVELOP ASSETS

WHEREAS, the Earned Income Tax Credit is the nation's largest wage support for low-income workers, currently benefiting more than 21 million of America's workers, or approximately 15 percent of the nation's labor force; and

WHEREAS, while the EITC is an effective support for many low-income workers, it does not provide needed assistance to most low-wage childless workers, and two-worker families are much less likely to qualify for the EITC than one-worker families; and

WHEREAS, renewing the Saver's Credit would provide matching contributions to retirement plans of up to 50 percent for families earning $50,000 or less per year, up to a maximum of $1,000; and

WHEREAS, California's "ReadyReturn" program has reduced the tax-filing burden for many eligible Californians through the State's use of information it already has on hand, such as that contained in W-2 forms, to provide taxpayers with a completed return which they can approve and submit to the State; and

WHEREAS, while most of the major new federal policy expansions that benefit lower and middle income households have happened through the tax code, most of the subsidies available have disparate eligibility standards, are difficult to understand, and vary between nonrefundable and refundable tax credits; and

WHEREAS, consolidating all of the existing tax credits into a Comprehensive Family Tax Credit could expand access to the various tax credits now available and ease administrative burdens and costs; and

WHEREAS, savings incentives, such as preferential tax treatment of IRAs and 401(k)s, do not help low- and moderate-income families, and nearly two-thirds of the benefits go to the top 20 percent of income earners; and

WHEREAS, many low-income families and individuals are forced to go to expensive tax preparation services and thus spend a significant portion of the tax credits they are due just to be able to file a return,

NOW, THEREFORE, BE IT RESOLVED, that The United States Conference of Mayors calls on Congress to reform the federal tax code so that the benefits available to lower income families will be increased, simplified, and easier to access; and

BE IT FURTHER RESOLVED, that specific reforms to the federal tax code include: Substantially expanding the EITC so that it better rewards hard working, lower income families and expands eligibility for single adults by increasing the maximum benefit for childless, single adults from $399 to $1,600, allowing two-income households to deduct the lower of the two incomes from their eligibility, indexing the EITC to the minimum wage, and simplifying regulations to fit the current demographics and ensure that it is helping the people who need it most; Increasing and making refundable the federal Saver's Credit, which provides matching contributions to families, providing further incentives for families to save; Adopting California's "ReadyReturn" program, which would greatly simplify tax compliance for the great majority of Americans who do not itemize their taxes; Considering the establishment of a Comprehensive Family Tax Credit which would pool together the many different policies that currently support lower income, working families; Creating a single, consolidated Jobs Tax Credit to create jobs in high poverty areas; Providing tax credits to employers and financial institutions that match savings of low-income employees and consumers; Increasing 410(k) participation by encouraging companies to auto-enroll employees; and

BE IT FURTHER RESOLVED, that free tax preparation services be available to lower income working families and individuals, and that an extensive outreach campaign be undertaken to encourage eligible families to take advantage of them.

2007 The U.S. Conference of Mayors
Tom Cochran, Executive Director
1620 Eye Street, NW, Washington, DC 20006
Tel. 202.293.7330 ~ Fax 202.293.2352
info@usmayors.org