Early Entitlement Age. The age at which individuals qualify for reduced retirement benefits if they choose to collect benefits before the normal retirement age; the early retirement age for Social Security is 62. (Also known as Early Eligibility Age and Early Retirement Age.)
Earned Income Tax Credit (EITC). A refundable tax credit that increases with earnings up to a point, stays the same over a range of income called the "plateau," and then phases out at higher earnings levels. The tax credit rate for families with two or more children is 40 percent; the maximum credit in 2003 was $4,204. Smaller credits apply to families with one or no children. The beginning of the phaseout range is slightly higher for married couples than for single heads of household.
Economic Income. A very broad income concept similar to a measure developed by Treasury's Office of Tax Analysis in the 1980s and used in its distribution tables until 2000. Economic income is AGI minus business income, foreign earned income, farm income, Schedule E income, taxable interest, dividends, taxable state and local tax refunds, net realized capital gains, taxable IRA deductions, taxable pension income, plus total deductions, returns to capital and labor, non-taxable social security income, cash transfers, fringe benefits, worker's compensation, employer's share of payroll taxes and corporate tax liability. It is then adjusted for family size.
EGTRRA. Economic Growth and Taxpayer Relief and Reconciliation Act of 2001. A tax bill that reduced most tax rates, increased the child tax credit and made it partially refundable, expanded tax-free retirement savings, reduced marriage penalties, increased the child and dependent care tax credit, and phased out the estate tax. Most provisions were scheduled to phase in slowly between 2001 and 2010, and then expire at the start of 2011. JGTRRA accelerated some of the EGTRRA tax cuts and added others.
Employee Stock Ownership Plans. Retirement plans that invest in employer securities of the corporation that establishes the plan.
Empowerment Zone. Small rural and urban geographic areas of economic distress eligible for special grants, business training, improved access to capital, tax benefits, and regulatory relief aimed at encouraging economic development and greater opportunity.
Entitlements. Payments to individuals, governments, or businesses which, under law, must be made to all those eligible and for which funds do not have to be appropriated in advance. Social Security, Medicare, Medicaid, and TANF are among the entitlement programs.
ERISA (Employee Retirement Income Act of 1974). A law enacted to protect workers from the loss of benefits provided through the workplace; enables workers to protect their vested benefits when the plan or its assets are mismanaged by the plan sponsor.
ERTA (Economic Recovery Tax Act). Tax legislation enacted in 1981 that significantly reduced income taxes on individuals and businesses. These cuts were scaled back in 1982 by the Tax Equity and Fiscal Responsibility Act (TEFRA).
Equity Stripping. The encumbering of valuable assets, usually real property, to take the value out of the property so that little or nothing is left for creditors.
Estate and Gift Tax. A tax levied on the value of assets held at the time of death above a certain threshold. The threshold is $2 million in 2007. Deductions are allowed for transfers to a spouse, gifts to charity, and expenses, and the federal tax is reduced by the amount of most state taxes levied. Gifts before death in excess of $12,000 (in 2007) are also subject to a gift tax, which is deductible against the estate tax at time of death.
Excise Tax. Tax on specific goods and services, levied at federal, state, and local levels. The most common excise taxes are on gasoline, cigarettes, and alcohol.
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