Overview
- Sen. Chris Van Hollen’s Working Americans’ Tax Cut Act would exempt the first $46,000 for single filers and $92,000 for couples through an alternative tax that applies a 25.5% rate only to income above those amounts, and sponsors say it could help about 130 million people.
- Sen. Cory Booker’s Keep Your Pay Act would raise the standard deduction to $75,000 for married couples and $37,500 for single filers and would expand the child tax credit and the earned income tax credit.
- Both proposals shift more of the tax load to high earners, with Van Hollen’s bill adding 5% to 12% surtaxes on income above $1 million and Booker calling for higher top brackets, a higher corporate rate, and a steeper stock buyback tax.
- Budget groups estimate steep revenue losses, with ITEP modeling at least $100 billion a year for Van Hollen’s plan and Yale’s Budget Lab pegging Booker’s plan near $5.4 trillion over a decade, with the Tax Foundation warning that higher funding rates could dampen growth.
- Analysts widely expect the measures to stall in committee this session, even as Democrats promote them as simple pocketbook relief heading into the midterms and labor groups like the AFL-CIO line up in support.