Pascrell Puerto Rico Relief Bill Passes in Committee

Bipartisan tax legislation would help create equitable EITC benefits for island residents facing pervasive poverty now heads to House floor

WASHINGTON, DC – U.S. Rep. Bill Pascrell, Jr. (D-NJ-09), a member of the tax-writing House Ways and Means Committee, celebrated the passage in the committee today of his Tax Equity and Prosperity for Puerto Rican Families Act. The legislation would provide a federal supplement to Puerto Rico’s newly-created Earned Income Tax Credit (EITC) program, as well as funding for EITC education and outreach to the island. In addition, the legislation would provide a similar supplement to the other U.S. territories. It was included in H.R. 3300, the Economic Mobility Act of 2019, which cleared the Ways and Means Committee today.

“Puerto Ricans are Americans and they deserve to treated on equal footing, especially as they continue to recover and rebuild from Hurricane Maria,” said Rep. Pascrell, who first introduced legislation to provide an Earned Income Tax Credit for residents of Puerto Rico in 2007. “By denying working Puerto Rican taxpayers access to the federal EITC that all other Americans can use to supplement their own incomes, this deficiency has hobbled the commonwealth as Puerto Ricans deal with pervasive high unemployment and poverty. Our Puerto Rican brothers and sisters should be able to earn the same benefit, and with this legislation they will. I look forward to its consideration on the House floor.”

The Joint Committee on Taxation estimates that this provision would reduce poverty by putting an extra $6.8 billion into the pockets of working Americans in Puerto Rico and other U.S. territories over the next ten years. Pascrell’s legislation, H.R. 3307, is cosponsored by Reps. Don Beyer (D-VA-08), Suzan DelBene (D-WA-1), Bonnie Watson Coleman (D-NJ-12), Darren Soto (D-FL-09), Barbara Lee (D-CA-13), Nydia Velázquez (D-NY-07), Brian Higgins (D-NY-26), Danny K. Davis (D-IL-07), Alexandria Ocasio-Cortez (D-NY-14), and Tom Suozzi (D-NY-03), and Dels. Gregorio Kilili Sablan (D-No. Mariana Islands) and Michael San Nicolas (D-Guam).

As part of a comprehensive tax package that was enacted on the island in December 2018, Puerto Rico started implementing a local EITC in January 2019, joining the District of Columbia and 29 other states that have successfully implemented their own EITC.

In the 1990s, the EITC became a major component of federal efforts to reduce poverty. The local earned income credit will cost the Commonwealth an estimated $204 million annually and offer maximum credits between $300 and $2,000 depending on family size and configuration. The federal supplement is geared to serve as an incentive for Puerto Rico and the other U.S. territories to increase the size of their EITC.

The Earned Income Tax Credit is a proven policy success, incentivizing work and lifting 8.9 million Americans out of poverty in 2017 when paired with the Child Tax Credit. A growing body of research links the EITC to better infant health, improved school performance, higher college enrollment, and increased earnings throughout one’s life.

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