Economic Report of the President 1994 - The American Presidency ...

lation than is, say, an increase in the minimum wage, because minimum-wageworkers are found in all family-income brackets. It issimple to administer, requiring no special bureaucracy. And, finally,it apparently reaches a larger fraction of the eligible recipientsthan is typical of other income-support programs, perhaps becauseit is easy to claim and carries no stigma.Chart 1-12 Earned Income Tax Credit for Families with Two or More ChildrenThe expanded earned income tax credit will substantially increase the creditfor eligible families.Tax credit in 1994 dollars4,0003,000 -2,000 -1,000 -Source: Department of the Treasury.10,000 15,000 20,000 25,000 30,000Earnings in 1994 dollarsThe goal of the innovative empowerment zone program is tostrengthen business activity in certain geographic areas that areextremely depressed, so that synergies from concentrated economicactivity can help revive these areas. The program's main tax incentiveis a 20-percent tax credit for wages up to $15,000 per year paidby a zone business to a zone resident. This should be a powerfulincentive to create jobs in the zones. In addition, a variety of regulatorywaivers may be granted to give communities greater flexibility,and several Federal agencies will direct spending toward thezones.Beginning this year, nine empowerment zones, six urban andthree rural, will be selected by a competitive process that shouldencourage both imaginative thinking and private-public partnerships.In addition, 95 other neighborhoods will be designated enter-52