Chairmen Tiberi and Davis, thank you for holding today's hearing. President Ronald Reagan once said, "the Earned Income Tax Credit is the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress." The EITC is truly a bipartisan idea. It was signed into law by President Gerald Ford - and then expanded by every President since Ford, both Democrat and Republican.
And there's a reason for that - President Reagan was right - the EITC is extremely successful at increasing work and lowering welfare receipt, making our tax rules more fair for low- and moderate-income families, and most importantly, reducing poverty. In 2010, the EITC lifted about 6.3 million Americans out of poverty, including about 3.3 million children. Without the EITC, the number of children living in poverty would have been one-quarter higher.
Is the EITC perfect? Of course not, there's no provision in our Tax Code that's perfect. And I'm open to working with my Republican colleagues to strengthen the credit.
However, I get nervous by recent comments I've heard from my Republican colleagues that seem to imply that we should increase taxes on low- and moderate-income families. For example, Majority Leader Cantor recently stated, "we also know that over 45 percent of the people in this country don't pay income taxes at all, and we have to question whether that's fair "
Majority Leader Cantor and I clearly have very different definitions of the word "fair." Republicans are calling for increasing taxes on poor and moderate-income Americans, at the same time they're calling for lowering taxes on the wealthy. Is that fair? The Republicans tell us that we can't increase taxes on the wealthy because of the negative impact on jobs - but ironically they think increasing taxes on poor people will encourage them to work.
The Republican party has clearly come a long way from the days when President Reagan proudly proclaimed at the signing ceremony for the Tax Reform Act of 1986 that, "millions of the working poor will be dropped from the tax rolls altogether" and the wealthy will "pay their fair share."
Before I conclude, I'd like to highlight that I'm working on legislation that would extend for one year the recent enhancements to the EITC and child tax credit that would otherwise expire at the end of the year. I invite my Republican friends to join me in this effort.