The ranking member of the House Budget Committee proposed a series of major tax cuts and hikes Monday, saying Republican tax cuts only benefit the rich and Democrats aren’t doing enough to help the middle class.
“Our tax code today is stacked in favor of people who make money off of money and against those that make money off of hard work,” Rep. Chris Van Hollen said.
“A pro growth strategy is one that promotes broadly shared prosperity,” Van Hollen said while outlining the plan at the Center for American Progress. “Giving working Americans a larger share of the economic pie can make the entire pie grow faster, and even the wealthy can be better off with a smaller slice of a more rapidly growing pie.”
Brendan Buck, a spokesman for the House Ways and Means chairman Rep. Paul Ryan, dismissed Van Hollen’s plan as a tax increase. “Just as the sun rises in the east, Washington Democrats propose another massive tax increase,” he said. “Here in the House our focus is going to be on cleaning up the tax code so that we can lower rates for all taxpayers and help create good-paying jobs, not scaring them off with punitive tax hikes,” which would effectively raise taxes on the wealthiest earners to pay for the credits for the breaks to middle class earners.
Van Hollen’s plan includes a new Paycheck Bonus Tax Credit of $1,000 per worker or $2,000 per couple, a bonus of $250 per year to individuals who save at least $500 from tax credits or bonuses. It would more than double the child tax credit from the current limit of $3,000 for one child to $8,000.
The breaks for the middle class — which Van Hollen said would save the average working class family $4,000 a year — would come directly from Wall Street.
Van Hollen derided Republican’s past and future plans to cut top tax rates in an effort to stimulate investment and grow the economy, singling out Ryan’s most recent Republican budget proposal.
Van Hollen’s plan would get rid of certain corporate tax credits and deductions, and impose a new fee on certain financial speculation, which he said could raise tens of billions of dollars a year in federal revenues.
It would also prevent corporations from claiming the unlimited tax deductions for bonuses and corporate salaries over $1 million if they do not give their employees a pay raise, or if they are laying off workers.
Van Hollen acknowledged the plan has little to no chance of going anywhere in a Republican controlled Congress, but said he hopes it starts a conversation, and that “in time” it will get the American people’s attention. Pressed about Democrats failure to pass something similar when they controlled the Senate and White House, he blamed a lack of “full force” in their past plans.
He commended Democratic policy goals incorporated in President Obama’s budget, such as closing corporate tax loopholes, investing in early childhood education and scientific research and making the earned income and child tax credits permanent, but said they aren’t doing enough.
“It’s a strong foundation,” he said. “But I believe that in order to tackle that decades old problem of chronic stagnant wages and very flat incomes for most Americans, we need to go further.”
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