In what appears to be a response to President Trump’s 2017 GOP tax bill, Senator Kamala Harris (D-Los Angeles) has introduced the LIFT tax plan.
The Middle Class Act would provide monthly cash payments of up to $500 to lower-income families, on top of the tax credits and public benefits they already receive. It would also seek to implement a tax credit up to $6,000 for lower and middle income households.
“Our tax code should reflect our values,” Harris said in a Thursday press release, “and instead of more tax breaks for the top 1 percent and corporations, we should be lifting up millions of American families.”
Middle class families deserve to know that one unexpected cost won’t lead to a financial emergency. The LIFT the Middle Class Act that I introduced would help address the rising costs of housing, tuition, childcare, and more.
— Kamala Harris (@KamalaHarris) October 19, 2018
Households that earn less than $100,000 would be eligible for the $6,000 tax credit and families who earn half that would be eligible for up to $3,000. Furthermore, perhaps the most significant aspect of Harris’s proposal is that the tax credits would be refundable. Most tax credits are non-refundable meaning once you balance out what you owe, the rest of the credit disappears. Instead, under Harris’s plan, a person would be given the rest of the tax credit money. For example, if you owe $3,000 and get a refundable $6,000 credit, you would be given the remaining $3,000 in cash. Her proposal appears as a sneaky way of implementing another government subsidy.
Harris defended her plan stating “we should put money back into the pockets of American families to address rising costs of childcare, housing tuition and other expenses,” before adding “Americans are working harder than ever but stagnant wages mean they can’t keep up with cost of living increases.”
Despite if you support or don’t support the federal proposal. It will come at significant cost. According to the Atlantic, “legislation would cost $1.4 trillion over a decade, with the Harris legislation coming in at something like $200 billion a year. Harris has proposed repealing the Trump cuts to pay for her bill. But that would still leave a significant hole in the deficit—particularly after accounting for the other legislation that Democrats are pushing for or prioritizing, including Medicare for all, housing subsidies, a jobs guarantee, and child-care initiatives.”
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