The Democrats' new tax plan is their clearest, most efficient blueprint yet
WASHINGTON -- Just in time for Tax Day, we have new insight into the dueling partisan visions for the U.S. tax system.
We already knew that the GOP's 2017 tax law mostly benefited corporations and the wealthy; that's old news. But on Thursday, we got some illustrative examples, courtesy of the Institute on Taxation and Economic Policy. The organization found that at least 60 profitable Fortune 500 firms paid no federal income tax in 2018, about twice as many as in the years leading up to the law's passage.
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.
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.
It's called the Working Families Tax Relief Act. Already, nearly every Democratic senator has signed up to co-sponsor it -- including every senator now running for president.
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.