Democrats’ plan would reduce tax benefits for the 1 percent while giving the middle class a break
U.S. Representative Chris Van Hollen on Monday unveiled legislation to boost the middle class by giving many families a tax cut that would be countered by a fee on financial transactions and reduced tax benefits for the top 1 percent of earners.
Van Hollen, a Democrat from Maryland, said in prepared remarks that his plan would encourage companies to raise workers’ wages. It also would limit corporate deductions of bonuses paid to executives in excess of $1 million, unless the companies can show their workers are getting pay raises that reflect productivity and cost-of-living changes.
The plan also would give tax benefits to companies that invest in employee training programs and increase deductions for child daycare expenses.
“We can pay for these new tax benefits for working Americans by changing the ways our current tax code is rigged in favor of those who make money off of money and against those who make money from work,” Van Hollen said.
Income equality has been a major issue for Democrats, but the proposal has little chance of getting through Congress, where Republicans now have majorities in both the Senate and House.
The Van Hollen plan would cut back tax breaks for the top 1 percent of earners in the United States. It also includes a 0.1 percent tax on stock trades, mostly from high-volume transactions. He said the tax would raise tens of billions of dollars each year.
Van Hollen said the tax – what he called a “high-roller fee” – would curb “the kind of financial speculation that creates no value for the economy.” Previous proposals for transaction taxes have failed in Congress.
The proposed legislation calls for an annual “paycheck bonus” of $1,000 for individuals making less than $100,000 a year and $2,000 for married couples making less than $200,000. It also includes a bonus of $250 for people who save at least $500 a year and addresses “marriage penalties” that couples face in the tax code, compared to individuals.
(Writing by Bill Trott; Editing by Lisa Von Ahn and Jeffrey Benkoe)