U.S. Rep. Bill Pascrell, Jr. (D-NJ-08), a member of the House Ways and Means Committee, today introduced a bipartisan measure in the House of Representatives that would extend the earned income tax credit (EITC) provision of the federal tax code to United States residents of Puerto Rico.
"The earned income tax credit has proven its worth in the United States by helping to reduce the welfare caseload, increase employment for single mothers and ultimately lift working families and individuals," stated Pascrell. It is a powerful incentive in encouraging workers to come out from the underground economy and contribute to the formal economy. With 15 percent unemployment in Puerto Rico, the earned income tax credit will encourage workers to come out from the shadows and join the Commonwealth's economy."
"I want to thank Rep. Pascrell for his leadership on this issue, as well as to thank Reps Crowley, Towns, Maloney, Sires and Mica. These members are good friends to the people of Puerto Rico, and I am deeply grateful for their support," stated the Resident Commissioner of Puerto Rico, Pedro Pierluisi.
The legislation, called the Puerto Rico Work and Empowerment Act, would extend the EITC to help reduce poverty, increase employment and improve local economies in Puerto Rico just as it has done in the United States. In order to control the cost of the benefit, the legislation limits the amount of the credit by the amount contributed by the taxpayer and his or her employer in payroll taxes.
The Earned Income Tax Credit (EITC or EIC) began in 1975 as a temporary program to return a portion of the Social Security tax paid by lower income taxpayers, and was made permanent in 1978. In the 1990s, the program became a major component of federal efforts to reduce poverty, and is now one of the largest federal anti-poverty programs.
Childless adults in 2006 (the latest year for which data are available) received an average EITC of $237, families with one child received an average EITC of $1,838, and families with two or more children received an average EITC of $2,864.
"With United States residents of Puerto Rico contributing so heavily to America, I firmly believe that the earned income tax credit should be extended to the Island," stated Pascrell. "EITC is a proven tool and valuable resource in combating poverty and unemployment and boosting local economies. As long as U.S. residents of Puerto Rico serve honorably in our military, contribute to the tax base and make our country better, I see no reason to exclude them from this proven anti-poverty program."
Residents of Puerto Rico have fought with valor and distinction in every war since World War I, and the island's level of service in Iraq/Afghanistan exceeds that of all but one state in the United States.
The Puerto Rico Work and Empowerment Act is bipartisan and co-sponsored by Resident Commissioner of Puerto Rico Pedro Pierluisi, (D-Puerto Rico), Rep. Joseph Crowley (D-NY-07), Rep. Carolyn Maloney (D-NY-14), Rep. Albio Sires (D-NJ-13), Rep. John Mica (R-NJ-07), and Rep. Edolphus Towns (D-NY-10).