The Harris proposal, known as the LIFT the Middle Class Act, would provide middle-class and working families with a refundable tax credit of up to $6,000 a year to cope with rising living costs for things such as medical bills, rent and child care. (LIFT stands for livable incomes for families today.)
The credit would apply to households earning under $100,000 annually. Single filers earning under $50,000 a year would get $3,000. The credit could be accessed monthly or in one lump sum at the end of the year. It would begin to phase out for single taxpayers without children earning $30,000, single taxpayers with children earning $80,000, and married taxpayers earning $60,000.
ITEP’s Wiehe said the plan is more highly targeted than the 2017 tax law to help low-income workers. The poorest 20 percent would see a $2,100 benefit under the Harris plan, compared with $80 under the GOP plan, she said. About 123 million workers would receive tax breaks under the plan, according to Wiehe.
The Tax Foundation said the plan “would greatly increase the progressivity of the U.S. tax code.” Its analysis shows the proposal would give the bottom 20 percent of taxpayers a 20.5 percent boost in after-tax income. While pre-tax wages would remain unchanged, the plan would functionally raise the value of after-tax wages by 2.4 percent.
This article was provided by Bloomberg News.