Murray rolls out working-class tax cut
A senior Senate Democrat rolled out legislation on Wednesday that would expand a key tax credit for the working poor, intensifying the Democratic outreach to working-class voters this election year.
{mosads}The bill from Sen. Patty Murray (D-Wash.), the Budget Committee chairwoman, would give younger workers without children greater access to the Earned Income Tax Credit, an idea that’s been championed by President Obama and other Senate Democrats.
Murray’s measure would also certain lower- to middle-class married couples deduct 20 percent of the lower earner’s pay for tax purposes. That move would also help more couples to claim or get a larger benefit from the EITC, Murray’s office stressed.
Murray, the No. 4 Senate Democrat, rolled out the measure in an op-ed in The Hill, stressing that lawmakers should build on past bipartisan support for the EITC by updating it for the 21st century.
“Policies like the EITC have succeeded in helping millions of households lift themselves out of poverty – but the makeup of our workforce has shifted dramatically in the last few decades,” wrote Murray, noting that the credit was first enacted in the Ford administration.
Sens. Sherrod Brown (D-Ohio) and Jack Reed (D-R.I.) have already signed on to the legislation, according to Murray’s office. Brown has also released separate legislation to expand the EITC. GOP lawmakers have expressed concern that the EITC is prone to fraud.
Murray would pay for her measure, which would cost around $145 billion over a decade, by slashing a tax break for stock options for corporate executives and by installing a higher rate on certain corporate profits held offshore.
The Washington Democrat noted that House Ways and Means Chairman Dave Camp (R-Mich.) has made similar proposals in his recent broad overhaul of the tax code.
Murray’s plan broadens out a stock opton proposal in Camp’s plan, while the tax on offshore profit was in a draft proposal that the Ways and Means chairman released in 2011. Camp has warned against examining individual proposals in that plan in isolation.
But Murray’s proposal illustrates some of the concerns of GOP lawmakers, who feared that Democrats would cherry-pick Camp’s plan for pay-fors that could then have a bipartisan sheen.
Murray’s measure would lower the age at which workers without children could claim the credit, from 25 to 21, and increase the amount of income a worker can make and still be eligible.
According to the Treasury Department, that would help about 13 million workers. Currently, the maximum credit for a single worker without a dependent child is under $500, and phases out at under $15,000 of income.
To qualify for the 20 percent deduction, married couples must both have income for a given year, and have a child under 12.
This post was updated at 10:34 a.m. and 6:45 p.m.