On the first day of the 116th Congress (Jan. 3), Senator Kamala D. Harris (D-CA) re-introduced the LIFT [Livable Incomes for Families Today] the Middle Class Act (S.4). The legislation “provides middle class and working families with a tax credit of up to $6,000 a year—or up to $500 a month—to address the rising cost of living.”
“We need to make America’s tax code work for working people,” said Senator Harris. “Instead of more tax breaks for the top 1% and corporations, we should be lifting up millions of American families. A real tax cut for middle class families is a good place to start. That is why the LIFT the Middle Class Act is my first priority in the new Congress.”
- LIFT would provide a refundable credit that would match a maximum of $3,000 in earned income ($6,000 for married couples filing jointly).
- The credit would begin to phase out for single taxpayers starting at $30,000 of adjusted gross income (AGI) and $80,000 for single taxpayers with children, and begin phasing out for married taxpayers at $60,000 of AGI. The phaseout rate for all taxpayers would be 15 percent.
- The credit amount and the income parameters would be adjusted each year for chained CPI-U.
- Dependent taxpayers over the age of 18 who file tax returns would also be eligible for the credit.
- Earned income would be defined as wages, net self-employment income, and Pell Grants.
- Taxpayers would no longer be eligible for the credit if they reported more than $3,850 in investment income. Investment income is defined as interest, dividends, net capital gains, and…