As Americans filed their taxes this season—a process filled with confusion for many and startlingly small refunds for some—Democrats in Congress offered a sharp contrast to President Donald Trump's unpopular tax law in the form of two ambitious tax plans that actually work for working families. While Trump's 2017 tax law rewrote the tax code to further enrich millionaires, billionaires, and wealthy corporations, congressional Democrats' proposals—the American Family Act (AFA) and the Working Families Tax Relief Act (WFTRA)—would double down on two of the tax code's most effective income boosters for working and middle-class families: the earned income tax credit (EITC) and the child tax credit (CTC). Rather than push the nation even further toward inequality—a trend accelerated by Trump's tax law—these tax plans offer smart investments to help everyday families feeling the stress of flat wages and the rising costs associated with reaching and staying in the middle class. For example, Center for American Progress analysis shows that under the AFA, a minimum wage worker who has two young children would see their CTC boosted by more than $100 a week—greater than the $75 CTC increase they receive from the Trump tax law for the entire year.
This is the kind of policy that workers and families desperately need. More than 40 percent of U.S. households are struggling to afford basics such as food and housing, while 70 percent of voters faced at least one serious economic hardship in the last year. Moreover, 4 in 10 American adults would not be able to readily come up with $400 in an emergency. The WFTRA would help alleviate these financial pressures by increasing the incomes of an estimated 46 million households—including 9 million Latinx households, 8 million black households, and 2 million Asian American households—while the AFA would cut the child poverty rate by more than one-third. Here are five reasons this progressive tax vision is the kind of tax reform America actually needs.
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