WASHINGTON, D.C.—U.S. Representative Rahm Emanuel (D-IL) introduced a bill last week to name the federal Earned Income Tax Credit (EITC) in honor of the late President Ronald W. Reagan (HR 4729, the Ronald Reagan Earned Income Tax Credit Act).

President Reagan once called the EITC “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.”  The EITC was created in 1975 to help low-income workers.  The credit supplements their income by providing refunds on taxes paid to the government.

Under President Reagan, the EITC was expanded in 1986.  His support helped the EITC become one of the most effective instruments in fighting poverty and moving Americans from welfare to work.  The EITC was expanded again in 1990 and 1993, the last expansion occurring when Emanuel worked in the Clinton administration.

“I was at the other end of Pennsylvania Avenue when we expanded the Earned Income Tax Credit to 15 million families in 1993,” Emanuel said.  “Between 1993 and 1997, the EITC helped reduce the number of children living in poverty by 2.2 million.  We believed, as President Reagan did, that if you work, you ought not to live in poverty in this country.”

In 1997, the Clinton administration ensured the Balanced Budget Agreement increased the EITC refunds that some families received by creating the first-ever $500 per child credit.  By the late 1990’s, the credit was lifting 4.3 million Americans out of poverty each year.  In 2002, the credit provided $37 billion in tax relief to over 21 million recipients, all from households earning less than $35,000 annually.  Last year, nearly 823,000 working families and individuals in Illinois claimed the federal credit, injecting $1.4 billion in tax refunds into the economy.

“These families represent some of the hardest working members of our society,” said Emanuel.  “The Earned Income Tax Credit has translated into down payments for homes and money for college.”

Congress has a long history of naming federal buildings and programs after illustrious Americans.  For instance, the Roth IRA retirement savings plans were named in honor of the late Senator William Roth (R-DE), and the Coverdell education savings accounts were so named in tribute to the late Paul Coverdell (R-GA).