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A Tax Cut Democrats Can Back

September 19, 2018
Ro's Op-Eds
Ro Khanna and Ann O’Leary

Wall Street Journal

In anticipation of the midterm elections, congressional Republicans have recently proposed making their tax cuts permanent. The price tag would amount to $1.1 trillion over the next 10 years. The problem with the 2017 tax law is that it was geared at the investor class, not the middle class. Making the cuts permanent would give the top 1% of income earners more than double the tax savings of those in the bottom 60%.

Democrats have an alternative vision. We believe an overwhelming majority would vote for a $1 trillion tax cut to provide relief for workers by expanding the child tax credit (CTC) and the earned-income tax credit (EITC). This would help nearly 47 million households.

We know these tax credits make work pay for low-wage earners and their dependents surviving on limited income. Using the Supplemental Poverty Measure, they raised 8.9 million Americans, including 4.7 million children, above the poverty line in 2016. But today’s CTC provides little or no credit to the lowest-income families, while the EITC doesn’t do enough to help childless workers or those in the middle class who are struggling paycheck to paycheck.

Our proposal—legislation one of us introduced and a policy proposal one of us helped develop with the Economic Security Project—would fix that. More Americans could keep more of what they earn for health care, education and savings.

The plan would also double the EITC for working families and expand the definition of what counts as work by including caregiving and education, to help ensure that families can take care of one another, get the skills they need, and still get ahead. It would increase the credit for childless workers almost sixfold. It would make the tax code fairer, benefiting half of American households. We also want to make sure Americans don’t have to wait for tax season to get this boost or go into debt because of predatory lenders. We believe these IRS refunds should be available monthly.

A diverse and growing coalition supports our plan, which has 55 sponsors in the House and was introduced in the Senate by Sherrod Brown. Almost every Democrat—Clintonite or Berniecrat—can get behind it. It also ought to appeal to Republicans like Sens. Mike Lee and Marco Rubio, who have called for expanding the CTC, and Speaker Paul Ryan, who has said the EITC should be more generous.

If Democrats win the House, President Trump would have an opportunity to work with Congress and live up to his campaign rhetoric. “The people I care most about,” he said, “are the middle-income people in this country who have gotten screwed.”

Mr. President, the answer is to give them a raise by embracing tax credits that fuel the economy and let working Americans keep more of what they earn, so they can reinvest it in their communities.

Mr. Khanna, a Democrat, represents California’s 17th Congressional District and serves on the House Budget Committee. Ms. O’Leary, a partner at the law firm Boies Schiller Flexner, was senior policy adviser to Hillary Clinton’s 2016 presidential campaign and a special assistant to President Clinton for domestic policy.