Multiple federal policies are currently in play that would improve the lives of workers in our state and across the nation. A new report from the Institute on Taxation and Economic Policy describes five promising policies that would expand and build on the federal Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) programs that put cash back in the pockets of low- and middle-income workers and that help strengthen people’s economic well-being. These policies would have enormous positive impacts on the lives of millions of Washingtonians:
- The Cost-of-Living Refund Act (Sen. Sherrod Brown, Rep. Ro Khanna) would significantly expand the federal EITC by nearly doubling the amount of the credit and expanding to younger workers without children.
- The American Family Act (Sen. Michael Bennet, Rep. Rosa DeLauro) would make major expansions of the CTC, which is currently a credit of up to $2,000 for each child under age 17.
- The Working Families Tax Relief Act (Sen. Sherrod Brown) would increase the CTC and expand and increase the EITC for families with and without children.
- The LIFT the Middle Class Act (Sen. Kamala Harris) would provide a new tax credit for low- and moderate-income workers on top of the EITC.
- The Rise Credit (Sen. Cory Booker) would replace the EITC with a new credit similar to the EITC that would extend eligibility to some caregivers and college students.
These proposals vary when it comes to the details, but what they all have in common is this: They provide targeted tax credits to working people who are struggling to keep up with the rising cost of living. Think of these as antidotes to the Trump administration’s incredibly harmful Tax Cuts and Jobs Act (TCJA), which almost exclusively benefits the very wealthiest. As the interactive chart below shows, these proposals are all far and away better deals for working families than the Trump plan passed in 2017, which gives away an average of $85,000 a year in tax cuts to the wealthiest 1% of Washingtonians.
Click on the drop-down items
to see the impacts of each policy proposal.
Ensuring that all families can make ends meet requires a commitment at both the state and federal level to create a future of opportunity for all Washingtonians. Promising federal policies like these should be paired with strong state policies that would also help working families and fix our state’s upside-down tax code – like the Working Families Tax Credit, our state’s version of the EITC, and a capital gains tax on the ultra-wealthy.
Get more details on these federal proposals from ITEP’s latest report, Understanding Five Major Federal Tax Credit Proposals.