Washington, D.C. – Today, U.S. Senators Bob Casey (D-PA) and Tammy Baldwin (D-WI) announced that they have introduced a key middle class tax amendment to the House-passed Budget Reconciliation Act. The Amendment includes multiple tax provisions, specifically two major tax credits, including the Dual Earner Tax Credit, allowing up to a $700 tax credit on a second earner’s income, and the Child Care Tax Credit, which would help families afford childcare. Further provisions in the amendment include:
- Ending corporate inversions by tightening rules for inverted companies, requiring that they be at least 50 percent foreign-owned (as opposed to just 20 percent) to escape U.S. tax jurisdiction
- A new minimum tax, known as the Buffett Rule, which would be phased in for individuals with adjusted gross income between $1 million and $2 million; in later years, those thresholds would be indexed for inflation.
- Closing an executive loophole, which encourages executives to assume riskier management approaches in the hope of driving near-term profits and stock price gains
“Middle class families in Pennsylvania and around the country are struggling,” said Senator Casey. Wages are stagnant and household costs, such as child care, continue to go up. My amendment provides tax relief for middle class families up front, but also enables families to invest in things like high quality early learning that we also know yield benefits down the road, such as higher earnings and lower rates of crime.”
“Washington continues to give tax preferences to the wealthy and well connected as household income is falling for middle class families in Wisconsin. We need to rewrite the rules by making sure those at the top pay their fair share so we can cut taxes for the middle class and raise incomes for working families. I’m proud to join Senator Casey in support of these tax reforms so that we can work to build an economy that works for everyone,” Senator Baldwin said.
The 21st Century Worker Tax Cut Act would make work pay for low- to middle-income families by allowing a 7 percent credit on up to $10,000 of the secondary earner’s income, while the Child Care Tax Credit would increase the maximum allowable expense limit to $8,000, extend the maximum credit rate of 35 percent to all households making up to $110,000, and make the credit fully refundable.
The full text of the amendment can be found here.