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Carlton, supra at 32. Where legislation is “curative”, courts
liberally construe the retroactive application of the law. See,
e.g., Temple University v. United States, 769 F.2d 126, 134 (3d Cir.
1985).
We do not believe the 1998 amendment is a “wholly new tax”. To
the contrary, it serves primarily as clarification to existing law,
as opposed to a change of existing law. It was a curative measure
that did not impose new tax liabilities or alter the substantive
rights of the parties. Congress’ purpose in enacting the 1998
amendment was rationally related to the legitimate Government
purpose of ensuring that only the most needy individuals receive the
earned income credit.5 See id.
Congress originally enacted the earned income credit
legislation to provide economic assistance to low-income working
taxpayers. See S. Rept. 94-36, at 11 (1975), 1975-1 C.B. 590, 595.
The program’s objectives included: (1) Offsetting social security
payments made by low-income workers; (2) providing a work incentive
for individuals who receive welfare benefits; (3) providing low-
income families with income security; and (4) attempting to “redress
the effects of regressive federal tax proposals.” 136 Cong. Rec.
S15632, S15684-S15685 (daily ed. Oct. 18, 1990) (Explanatory
5 This case involves the disallowance of a credit, which
provides further support to the constitutionality of the 1998
amendment. See, e.g., Fife v. Commissioner, 82 T.C. 1 (1984)
(Tax Court upheld the constitutionality of a retroactive
amendment to the investment tax credit provisions).
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