Van Hollen, Kelly, Gillibrand, Booker, Kim, Beyer Introduce New Bill to Cut Taxes for Millions of Working Americans

Today, U.S. Senators Chris Van Hollen (D-Md.), Mark Kelly (D-Ariz.), Kirsten Gillibrand (D-N.Y.), Cory Booker (D-N.J.), and Andy Kim (D-N.J.) and U.S. Representative Don Beyer (D-Va.) introduced the Working Americans' Tax Cut Act, new legislation to provide much-needed tax relief for millions of working Americans who are struggling to afford the cost of living as wages remain stagnant and prices rise. This bill provides broad, permanent tax cuts to nearly 130 million working Americans. The bill eliminates federal income taxes for Americans who make under the median cost of living, $46,000. The bill additionally provides a significant tax break to individuals making between $46,000 to $80,500, with proportionally higher rates for heads of households and married couples. The legislation is fully paid for and avoids raising the national debt by ensuring the wealthiest pay their fair share through a tiered surtax on income above a million dollars. This proposal stands in stark contrast to tax law that Donald Trump and Republicans in Congress passed last year - which provided a tax giveaway to billionaires and exploded the deficit, while offering only temporary relief for some working families.

In addition to Senators Van Hollen, Kelly, Gillibrand, Booker, and Kim, this legislation is cosponsored in the Senate by Senators Dick Durbin (D-Ill.), Bernie Sanders (I-Vt.), Jeff Merkley (D-Ore.), Chris Coons (D-Del.), Richard Blumenthal (D-Conn.), Brian Schatz (D-Hawaii), Tammy Baldwin (D-Wis.), Mazie Hirono (D-Hawaii), Martin Heinrich (D-N.M.), Angus King (I-Maine), Ed Markey (D-Mass.), Peter Welch (D-Vt.), Adam Schiff (D-Calif.), and Lisa Blunt Rochester (D-Del.).

This legislation has been endorsed by a broad range of organizations: AFL-CIO, American Federation of Teachers (AFT), Americans for Tax Fairness, Community Change Action, Demos, Get Out the Vote PAC, Indivisible, Institute for Policy Studies, MoveOn, National Education Association (NEA), NETWORK Lobby for Catholic Social Justice, Oxfam US, Patriotic Millionaires, People's Action, Public Citizen, Social Security Works, Strong Economy for All Coalition, SURJ, Take on Wall Street, and United for a Fair Economy.

"Far too many Americans are working hard for their paychecks but still having trouble making ends meet. These Americans who are earning just enough to get by - to meet their basic living expenses - should not have to pay a federal income tax. Our bill would ensure just that - and it would provide a significant tax break to millions of other working Americans, so folks can keep more of their hard-earned money in their pockets," said Senator Van Hollen.

"Families across Arizona are working hard and doing everything right but still falling behind. Instead of helping them get ahead, Trump gave more huge tax breaks to the wealthiest Americans while hiking up prices on everyone else," said Senator Kelly. "Our plan is to put more money in the pockets of middle-class Americans -from nurses and teachers to firefighters and electricians -and restore the basic promise that in this country, hard work pays off."

"Families are struggling amidst higher costs in Trump's America," said Senator Gillibrand. "I'm proud to cosponsor the Working Americans' Tax Cut Act to support working families, drive economic growth, and reduce income inequality. While the Trump administration turns its back on hardworking Americans, I will keep fighting to lower costs and make sure Americans can take home more of their hard-earned pay."

"It's unacceptable that while so many are struggling to afford everyday expenses in our country, those at the top still aren't paying their fair share. While Trump continues to protect a system that only works for his billionaire buddies, this tax proposal delivers real relief to working Americans - and it can't come soon enough," said Senator Kim.

"For decades, our tax code has been tilted to benefit the wealthiest Americans - especially those making millions of dollars each year from investments and capital gains. Our bill would restore balance and fairness to our tax code by asking the wealthiest Americans to contribute more through a tiered surtax on income above one million dollars. That revenue will deliver meaningful tax relief for working Americans trying to afford basic necessities like groceries, rent, child care, and gas," said Representative Beyer.

The Working Americans' Tax Cut Act provides needed tax relief for working Americans - whether they are a single adult, a head of household, or a married couple filing jointly - by reducing their federal income taxes based on their income to help ensure they can afford their cost of living expenses.

• The median cost of living for a single adult with no children in the United States is estimated to be $46,000 a year, based on county-level data aggregated by the Living Wage Institute. Individuals who earn less than that will not pay federal income taxes.

• For individuals with income ranging from $46,000 to $80,500, the legislation provides a significant tax break to also combat cost of living expenses. It phases out this cost-of-living exemption at 175% of the median cost of living for a single adult with no children. As a result, a person making between $46,000 and $80,500 a year would have a lower tax rate using this exemption than they do under the current tax system. To illustrate, a single person who makes $50,000 would typically receive a tax cut of approximately $2,800.

• The bill includes a larger exemption for heads of households, 140% of the single exemption or $64,400; and for married couples filing jointly, 200% of the single exemption or $92,000.
• • These exemptions will also phase out at higher rates, with heads of households making between $64,400 and $112,700 a year and married couples making between $92,000 and $161,000 a year receiving a tax cut under this legislation. For example, a family of four who earns $95,000 would typically receive a tax cut of approximately $6,000 due to the cost-of-living exemption.

According to an analysis by the Institute for Taxation and Economic Policy, nearly 130 million people, including over 25 million children, would receive a tax cut through this legislation. Additionally, it is fully paid for through a tiered surtax on millionaires. The bill applies an additional 5 percent tax to the first dollar an individual makes over $1 million and the first dollar a married couple earns over $1.5 million annually; an additional 10 percent tax to the first dollar an individual makes over $2 million and a married couple makes over $3 million annually; and an additional 12 percent tax to the first dollar an individual makes over $5 million and a married couple makes over $7.5 million annually. This surtax would apply equally to wages and salaries as well as to capital gains and other investment income. The Yale Budget Lab has estimated that this surtax would impact 615,000 tax filers and raise $1.46 trillion over ten years.

A backgrounder on the legislation can be viewed HERE. Bill text can be viewed HERE.

"Working people are one medical bill, one car repair, one bad break from not making rent," said AFL-CIO President Liz Shuler. "They are working longer hours than ever and still struggling to put food on the table, while paying more in taxes than the billionaires. As we continue to fight for universal affordable health care, universal child care, and livable wages, the Working Americans' Tax Cut Act is an important step toward getting working people some real relief."

"The Working Americans' Tax Act is one of the most important concrete actions Congress can take to ease the squeeze on working families. Right now, workers can't pay the bills. Their wallets are being drained by a severe affordability crisis caused by the current administration and aggravated by the 'Big, Ugly Bill', which doubled down on tax cuts for billionaires, while stripping healthcare and nutrition assistance away from everyone else. This long-overdue legislation puts cash back in the pockets of millions of Americans who are being forced to choose between paying the rent and putting food on the table. It is a meaningful down payment on a solution that actually works for workers and the AFT is proud to be leading on it," said Randi Weingarten, President of the American Federation of Teachers.

"At this point in American life, both parties want to be the party of the working class. Over the summer, Republicans tried to prove themselves by putting forward a budget bill that only offers tax relief for the 3% of working people who rely on tips. But today, Senator Van Hollen and his Democratic colleagues made their pitch to wear the label by introducing a bill that provides help to ALL working people. To us, it's abundantly clear who actually deserves it," said Morris Pearl, Chair of Patriotic Millionaires. "This is a watershed moment that would offer economic stability to a vast majority of the country. Millionaires like me will be better off paying a little more in taxes so that all of the workers we depend on can afford to provide for their families. That's why the Patriotic Millionaires are thrilled to see Senator Van Hollen, Senator Kelly, Representative Beyer, and their colleagues introduce the Working Americans' Tax Cut Act to get our country on a better and more sustainable path for the sake of our economy and democracy."

"Billionaires are hoarding their wealth to corrupt our politics and entrench their own power. Those very same billionaires are bankrolling the wannabe king, making a bet that selling out our democracy will be rewarded with personal financial favors. Senator Chris Van Hollen's Working Americans' Tax Cut Act offers a clear alternative: make the ultra-wealthy finally pay their fair share in taxes. If Democrats want to build a strong opposition to this regime, it means advancing bold, easy-to-understand policies like this that stand up to concentrated wealth and fight for working Americans," said Ezra Levin, Co-Executive Director of Indivisible.

"While millionaires and billionaires make hand over fist, Americans across the country have to choose between paying rent or getting food on the table. If Democrats want to be the party of working people, then they need policies that make lives better for working people. Senator Van Hollen's plan to cut taxes for half of American workers, paid for by ensuring millionaires pay their fair share, will move us closer towards a government that works for all of us," said Britt Jacovich, MoveOn Spokesperson.

"The federal tax code should reflect a basic principle: the government should not tax people into poverty. The Working Americans' Tax Cut Act does exactly that - it exempts income up to the cost of living from federal taxes and asks millionaires to make up the difference. That's not redistribution. That's math. DCI was founded on the principle that democracy and free markets work best when working people have real economic stability, and right now too many Americans are taxed before they can afford rent or groceries. This legislation is the kind of pragmatic, common-sense reform that can actually pass and actually help people - and that's why DCI is proud to support it," said Lori Mayberry, CEO of the Democratic Capitalism Institute.

"Marylanders know the system isn't working for everyday people when we are paying our taxes, year in and year out, while billionaires are getting big tax breaks and handouts," said Larry Stafford, Jr., Executive Director of Progressive Maryland. "Senator Van Hollen's proposal would deliver real tax relief to working families while making our tax system fairer. This is a clear example of how Democrats can fight for people who work for a living."

"The Working Americans Tax Act is an important and vital move to restoring economic opportunity and fairness for people who are not rich (most Americans). The Act is a necessary component to restore equity to our tax code - a tax code which, since the Reagan era, has increasingly favored the already rich. Using the tax code to enhance existing wealth has always come at the expense of everyone else (society must fund the expense of giving tax relief to the wealthy). Growing economic inequality weakens our society and this bill seeks to reduce the inequality produced by the tax code. Economic fairness (defined by the average person, not the wealthy) makes us strong and this bill can make us stronger." - Indivisible Maryland Coalition

"The Working Americans Tax Cut Act would help hardworking Americans afford to put food on the table, keep the lights on, and access high quality child care. As costs continue to rise, middle-class families are the ones that need income tax relief, not billionaires," said Senator Durbin. "I'm joining my colleagues to put money back in the pockets of Americans and ensure the wealthy pay their fair share."

"Instead of the Republican vision of 'Families Lose, Billionaires Win,' let's pursue a better vision where families thrive and billionaires pay their fair share," said Senator Merkley. "It's past time we build an economy that truly works for working families, ensuring folks have a good-paying job and can afford decent health care, a good education, and a safe roof overhead."

"Middle class Americans struggling under the cost of President Trump's disastrous tariffs, his reckless war with Iran, and his health care price hikes deserve a real tax cut - not the wealthy donors to whom President Trump and Republicans in Congress gave trillion-dollar tax breaks last year," said Senator Coons. "President Trump's policies have made life harder and more expensive for Delawareans and millions of Americans. I'll support any effort to undo that harm and give American families better economic opportunities and more financial security in their lives."

"This bill enacts broad tax cuts for working families-providing economic relief and ensuring that working Americans can afford their basic expenses under President Trump's skyrocketing cost of living. Trump has cozied up to the billionaire class, providing massive tax breaks for the wealthy while ignoring the needs of the American working class. By reducing federal income taxes based on income level, the Working Americans' Tax Cut Act puts money back into the pockets of working families and ensures they can meet their needs," said Senator Blumenthal.

"Donald Trump is happy to slash our health care and explode the deficit to pay for tax breaks for his billionaire buddies, but when the time comes to help working families, that enthusiasm is nowhere to be found. Wages are stagnant, prices are soaring, and far too many Americans are struggling to make ends meet," said Senator Hirono. "This legislation cuts federal income taxes for millions of Americans, without driving our nation further into debt. By making sure that America's wealthiest pay their fair share, we can put money back in the pockets of working families."

"The cost of everything is going up - from groceries to gas to electric bills. And thanks to Trump's illegal tariffs and reckless war in Iran, they're about to get even higher. Working families in New Mexico deserve a break," said Senator Heinrich. "This legislation helps keep hard-earned money in the pockets of working people. While President Trump and Republicans in Congress give massive tax breaks to billionaires, Democrats are working to give families in New Mexico and across the country a permanent tax cut that will make life more affordable."

"Income inequality in our country is the highest it's ever been. That's no thanks to Republicans' tax law, which not only exploded the deficit, but delivered huge tax cuts to the wealthiest 1% of Americans at the expense of working-class families already struggling to make ends meet," said Senator Welch. "Making sure millionaires pay their fair share is essential to offsetting Republicans' disastrous trickle-down policies and will put money back in the pockets of everyday Americans."

"Affordability is a top concern for millions of Americans. This bill would give working families some much-needed financial relief while ensuring billionaires pay their fair share. With income inequality at an all-time high - made worse by Trump's big ugly bill - I'm proud to join my colleagues in the effort to pass the Working Americans' Tax Cut Act into law," said Senator Blunt Rochester.