House Democrats Introduce Tax Package to Support Middle Class Americans & Working Families

Press Release

Ways and Means Committee Ranking Member Richard Neal (D-MA), Tax Policy Subcommittee Ranking Member Lloyd Doggett (D-TX), and Rep. Rosa DeLauro (D-CT) today introduced a series of tax bills that would cut taxes for America's middle class and working families. The bills would expand the Earned Income Tax Credit (EITC), American Opportunity Tax Credit (AOTC), and Child Tax Credit (CTC) for hardworking Americans.

"Democrats are focused on standing up for our nation's middle class. We must make sure that hardworking Americans -- the lifeblood of our economy -- get the tax cuts they deserve and need for their families, enabling their hard work to pay off and help them get ahead," said Ranking Member Neal. "My bill expands the EITC to apply to childless workers. It would also simplify and improve other aspects of the EITC to improve support for working parents and adults. By expanding and improving the EITC, AOTC, and CTC, we can help reduce poverty, ensure that hardworking Americans can get a leg up, improve college affordability, and grow our economy -- all while making our nation's tax rules fairer for all Americans."

"Removing financial barriers to higher education enables students to fulfill their full God-given potential, climb the ladder to success, and to strengthen our economic competitiveness," said Tax Policy Subcommittee Ranking Member Doggett. "This legislation would strengthen and simplify the education credit, which already helps millions to pay for college. Better coordinating the credit with Pell Grants will provide greater support for those who need it most."

"The Child Tax Credit Improvement Act will help millions of families across the United States who are striving to provide the best possible future for their children," said Rep. DeLauro. "The greatest economic challenge facing our country today is that Americans are working in jobs that just do not pay them enough, but we must do everything we can to ensure that families have the resources to succeed. Increasing the value of the Child Tax Credit for families with a child under the age of six has the potential to positively impact a child's health, education, and future."

Background

Earned Income Tax Credit Improvement and Simplification Act (Sponsored by Rep. Neal)

This bill would build on the enhancements to the EITC that were made permanent in 2015's PATH Act. The legislation would allow the EITC for an individual with no qualifying children if the individual is between ages 21 and 25 and is not a full-time student. The bill would allow families with children who do not have a valid Social Security Number to qualify for tax credits similar to the EITC for individuals with no qualifying children. It would also revise the credit eligibility rules relating to married individuals living apart and qualifying children claimed by another family member. Lastly, the bill would repeal provisions that would deny the credit to taxpayers due to excess investment income. Click here to view bill text.

Expand American Educational Opportunity Act (Sponsored by Rep. Doggett)

Since its 2009 enactment, the American Opportunity Tax Credit (AOTC) has helped millions of students and working families pay for college. With bipartisan support, it was made permanent in 2015. This legislation would provide support to those who most need it by increasing the portion of the credit that is refundable, and allowing Pell Grant recipients to get its full benefit. It would also simplify the credit by eliminating the need for two separate higher education credits, while increasing the credit's lifetime maximum limit. This bill has been endorsed by American Association of Community Colleges, American Association of State Colleges and Universities, American Council on Education, Association of American Universities, Association of Community College Trustees, Association of Public and Land-grant Universities, Council for Christian Colleges & Universities, Council for Opportunity in Education, Hispanic Association of Colleges and Universities, NASPA -- Student Affairs Administrators in Higher Education, National Association of College and University Business Officers, and National Association of Independent Colleges and Universities. Click here to view bill text.

Child Tax Credit Improvement Act (Sponsored by Rep. DeLauro):

This legislation would index the value of the Child Tax Credit with inflation and increase the value of the credit for families with young children under the age of 6 to $3,600. Indexing the value of the credit keeps the real value of the CTC constant, helping families to maintain the purchasing power of the credit. The most recent Census report on the Supplemental Poverty Measure showed that refundable tax credits, specifically the Child Tax Credit and the Earned Income Tax Credit, do more to lift children out of poverty than any other federal policy. Click here to view bill text.

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