In fact, most of these companies got a federal tax rebate.
For context, Americans’ top complaint about the tax system remains the “feeling that some corporations don’t pay their fair share,” according to a March poll
from the Pew Research Center. (In second place: “the feeling that some wealthy people don’t pay their fair share.”)
Now let’s consider what Democrats have on tap.
A lot of competing plans have piled up. Many 2020 presidential contenders have released proposals, covering everything from forcing big companies to report the same income to the tax man that they report to their shareholders (Elizabeth Warren); to using higher estate and inheritance taxes to pay for government-funded “baby bonds” savings accounts (Cory Booker); to something just shy of universal basic income administered through the tax code (Kamala D. Harris).
Some of these ideas are better thought through — legally, fiscally, politically — than others. But the general theme is this: Forget (or reverse) those tax cuts for the rich. Focus on cutting taxes for low- and middle-income families instead.
This week, we saw Democratic senators coalesce around a specific iteration of that theme. In new legislation, they offered the clearest blueprint yet for what they would do if they regained unified control of government.
The bill, introduced by Democratic Sens. Sherrod Brown (Ohio), Michael F. Bennet (Colo.), Richard J. Durbin (Ill.) and Ron Wyden (Ore.), focuses on expanding the earned-income tax credit (EITC) and the child tax credit.
For those unfamiliar, the EITC is a tax credit that incentivizes work by topping off workers’ wages. Given the EITC’s record of lifting living standards and job growth, it has long enjoyed bipartisan appeal; Republican and Democratic presidents alike have presided over successive expansions. If passed, this new bill would boost the credit for families who have children and massively expand it for “childless” adults (which includes non-custodial parents), who are currently eligible for little support.
What about the child tax credit?
The new bill would make the existing child tax credit available to all children by making it fully “refundable.” That is, poor families whose income taxes are less than the credit could receive the entire balance as a refund.
It would also create an entirely new, fully refundable “Young Child Tax Credit” available to families with children under 6. Together, these changes would increase the child-tax credit’s maximum value to $3,000 per preschool-age child. That would surely be a welcome increase in living standards for families struggling with child care and other expenses.
The bill’s beneficiaries would be widespread — raising incomes for households containing an estimated 114 million people and putting a significant dent in the child-poverty rate, according to an analysis from the Center on Budget and Policy Priorities. No cost estimate is available yet, but it appears less expensive than other ambitious proposals Democrats have put forward.
It also has the virtue of building on ideas that have traditionally had bipartisan support without undermining that support, as some other rival Democratic proposals risk doing.
An alternative plan that Brown introduced, for instance, would expand eligibility for the EITC to include those performing non-market work, such as full-time caregivers. I wholeheartedly agree that caregiving is hard work worthy of government support. But opening up something called an “earned income” credit to people without dollar earnings virtually guarantees Republican opposition. Which in the long run might jeopardize a successful program now seen as apolitical.
There are other tools available to help hard-working populations not eligible for the EITC — including of course expanding the child tax credit. The politics of the child tax credit are very different from those of the EITC, because it’s not defended on the grounds of moving people into paid jobs; it’s about supporting parents and children.
All told, for all the criticism of Democrats as a politically tone-deaf party devoid of any message other than “Not Trump,” they’ve worked hard to craft an economically efficient, politically formidable plan. Family-values-and-job-growth-supporting Republicans should take note.