Senate Democrats have unveiled a tax plan that, unlike the GOP’s, would actually help American working families.
As reported by Think Progress, Sen. Tammy Baldwin (D-WI) and Sen. Cory Booker (D-NJ) have announced a tax reform plan to challenge the Republican proposal to give a massive tax cut for the rich.
At the center of their plan are two tax measures that would benefit lower and middle-income families: expanding the Earned Income Tax Credit (EITC) and the Child Tax Credit.
Their plan, called the Stronger Way Act, markets itself as “tax reform to reward work.” In contrast to the GOP tax plan, Booker and Baldwin’s plan doesn’t change the actual tax code, but rather uses the existing tax code to help working families.
“Tax reform needs to reward hard work, raise incomes and help working families keep more of what they earn. Too many people are being left behind by Washington and The Stronger Way Act starts helping them get ahead,” said Baldwin in a statement. “The Stronger Way Act offers tax reform to reward work and a new partnership to invest in local jobs programs that will help raise incomes for working families.”
An expansion of the EITC, a refundable tax credit that primarily benefits lower- to middle-income families, has been embraced at one point or another by both sides of the aisle. House Speaker Paul Ryan (R-WI) and former President Barack Obama both put forth plans that included increasing the EITC.
Under Booker and Baldwin’s plan, workers with earnings above 50 percent of the poverty line would receive the maximum EITC. For example, a single working mother of two with an income consistent with the poverty level could earn a tax credit increase of more than $2,200 under their plan. Additionally, a working married couple with three children on an income of $20,000 per year would earn a tax credit of $3,500.
The Baldwin-Booker plan would also expand the EITC to workers without dependent children as a way to boost income for workers and to ensure they aren’t taxed into poverty. More than 20 million workers without dependent children would benefit from an EITC expansion.
Donald Trump’s tax plan, by contrast, raises the bottom tax rate to 12 percent, cuts the top rate to 35 percent, and also doubles the standard deduction while adding a total of $5.5 trillion dollars to the national debt, according to a recent analysis by the Tax Policy Center.
But the GOP tax plan is already finding itself in trouble. Deficit hawks like Sen. Bob Corker (R-TN) have expressed concerns over the plan, saying during a Senate Budget Committee hearing that “unless it reduces deficits and does not add to deficits with reasonable and responsible growth models, and unless we can make it permanent, I don’t have any interest in it.”