Statements on Introduced Bills and Joint Resolutions
Floor Speech
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - June 25, 2008)
By Mr. SCHUMER:
S. 3190. A bill to amend the Internal Revenue Code of 1986 to require employers to notify their employees of the availability of the earned income credit; to the Committee on Finance.
Mr. SCHUMER. Mr. President, I am pleased to introduce today, along with my colleague from the House, Rep. Rahm Emanuel, an important and noncontroversial bill designed to increase the percentage of eligible families that claim the Earned Income Tax Credit, or EITC, every year.
The bill is endorsed by the Service Employees International Union, SEIU, Wal-Mart, the Center on Budget and Policy Priorities, the Citizens for Tax Justice, the Leadership Conference on Civil Rights, Corporate Voices for Working Families, the College and University Professional Association for Human Resources, TJ Maxx, Kindred Healthcare, and Cintas.
Even in these tough economic times, Wal-Mart is still the nation's top private employer, and they place a huge emphasis on keeping their business costs low. If they are taking such a lead role on this bill, it should send a strong signal to the business community and to Republicans that it is a good idea and that the cost burden on business is next to nothing.
The EITC is a hugely important and popular program for working families. Started under President Ford after President Nixon advanced a similar program, and expanded under virtually every President since, the EITC sends a message that if you work hard and play by the rules, you shouldn't live in poverty.
I know the program isn't perfect, but it's the best tax tool we have for helping working families make ends meet. Combined with the recent increase in the minimum wage that Democrats pushed through the Congress, the EITC is improving the lives of million of families.
For tax year 2006, more than $44 billion in benefits were distributed to more than 22.4 million American families. That shows what a success the program is.
As one of the most populous states, with millions of working families of modest means, the numbers for New York State by itself are impressive. In 2006, nearly 1.5 million New York families took advantage of the EITC, claiming $2.8 billion in benefits. That's an average of $1,867 per family. But if the estimates from the Government Accountability Office are right and 25 percent of eligible families do not file for the credit, that's almost 500,000 families in my state who are missing out.
At an average EITC benefit of nearly $1,900, that means that more than $900 million could be going back into the pockets of New Yorkers--without a single change in the law--if we could find a way to reach these families. It could represent a second stimulus package for 500,000 working families as large as the one we passed earlier this year--and all eligible families have to do is ask for it.
With gasoline costing over $4 a gallon, and health care and tuition costs on the rise, if we can get an average of $1,900 into the pockets of 500,000 New York families, or 7.5 million people nationally--that's an opportunity we can't pass up.
Since these families are eligible for the credit under current law, it's not a policy that has to be scored or ``paid for'' under the PAYGO rules, because current law assumes these benefits will be paid. I can't imagine anyone objecting to this bill.
The Emanuel/Schumer legislation simply requires that employers notify their workers of their potential eligibility for the EITC when they send out the annual W-2 wage notice. To satisfy the notice requirement, employers would provide either a copy of IRS Notice 797, which explains how one qualifies for the EITC, or a separate written notice that is described in the language of the bill.
For those that might be concerned about the cost to business, our bill exempts firms with less than 25 employees.
This is a bill that is such common-sense, and represents such little cost to business, and offers such a large potential benefit to so many families, that it's something that we ought to be able to pass unanimously before the end of the year.
Rep. Emanuel and I sent a letter to Treasury Secretary Henry Paulson today about the bill. Even though the Bush Administration is nearing its end, the goals of this legislation could be accomplished via regulation or executive order, and I urge the Administration to take such action and render the bill moot. Rep. Emanuel and I would be happy not to have to pass this bill. Otherwise, we will push it and hope to pass it with broad bipartisan support by year's end. With unions and major employers both supporting the bill, there really should be no objection.
Mr. President, I ask unanimous consent that the text of the bill and a letter of support be printed in the Record.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
S. 3190
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June 25, 2008.
Hon. Henry Paulson,
Secretary, Department of the Treasury, Washington, DC.
Dear Secretary Paulson: Over the last 30 years, the Earned Income Tax Credit (EITC) has grown into the largest Federal anti-poverty program in the United States. In 2006, over 22 million taxpayers received almost $44 billion through the EITC. During its history, the program has been supported by both Democrats and Republicans. President Ronald Reagan described the earned income credit as ``the best anti-poverty, the best pro-family, the best job-creation measure to come out of Congress.''
As you know, millions of eligible Americans fail to take advantage of this critical program, costing themselves billions in tax benefits. Based on an analysis conducted by the General Accountability Office, 25 percent of those eligible to receive the EITC do not take advantage of it. The Internal Revenue Service (IRS) estimates that between 20 and 25 percent of taxpayers who are eligible don't claim the credit. While this issue has been a persistent source of concern, it is particularly troubling now when Americans are contending with record high gas prices and surging costs for other consumer goods.
On October 13, 2007, Governor Arnold Schwarzenegger signed into law Assembly Bill 650, the Earned Income Tax Credit Information Act. The legislation seeks to reduce the number of eligible taxpayers who fail to take advantage of the EITC by requiring California employers to notify their employees of their potential eligibility for the EITC. We believe that the California law should serve as a model for federal action, and will shortly introduce legislation to accomplish this goal.
We bring this to your attention because we believe that the goal of increasing awareness of the EITC, and thus expanding the number of taxpayers who access it, can also be accomplished through administrative rule-making.
Earlier in the year, you played a critical role in providing needed economic stimulus to working Americans that is now helping to soften the brunt of our current economic downturn. By increasing the number of eligible taxpayers who take advantage of the EITC program, you can build on this accomplishment and add further stimulus by providing, in some cases, thousands of dollars of assistance that can be used to buy gas or groceries, or pay the mortgage.
For this reason, we ask you to explore what the Administration can do to improve EITC outreach efforts, and specifically ask that you examine the possibility of requiring employers to provide information to their employees about the EITC at the same time that they provide W-2 statements. Earlier this year, at an EITC Awareness Day event, you noted: ``Ensuring that more eligible families receive their EITC is important this year, as it is every year. I encourage people all across America to check to see if you are eligible for the Earned Income Credit.'' We couldn't agree more, but believe we should also look to employers to help taxpayers take advantage of critical federal tax programs like the EITC.
Finally, we are aware that the Administration instructed federal agencies on May 9, 2008 to not undertake any new rulemaking procedures after June 1, 2008. We sincerely hope that this policy will not prevent the Administration from helping hardworking Americans who need it the most.
We look forward to your response and thank you for your consideration.
Sincerely,
Rahm Emanuel,
House Democratic Caucus Chair.
Charles Schumer,
Senate Democratic Caucus Vice-Chair.
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