Three tax credits proposed by Harris would largely benefit low- and middle-income households. Tax credits for families with children, low-income workers, and first-time homebuyers proposed by Democratic presidential candidate Kamala Harris would reduce federal tax revenues by $2 trillion over the next decade, while largely benefitting low- and middle-income households, according to a new Tax Policy Center analysis. More than 70 percent of households making about $113,000 or less would benefit from at least one of the three proposals modeled by -- an expanded Child Tax Credit, an expanded Earned Income Tax Credit, and a refundable tax credit of up to $25,000 for first-time homebuyers.
Can the candidates’ tax plans cover the cost of their proposals? TPC’s Howard Gleckman examines whether the tariffs proposed by Republican presidential candidate Donald Trump would pay for his policy promises, while TPC’s Renu Zaretsky considers the tax cuts and tax increases proposed by Democratic presidential candidate Kamala Harris.
No-tax-increase pledges make policy goals harder to achieve. In 2016, Republican presidential candidate Donald Trump pledged to reduce taxes for the middle class, while Democrat Hillary Clinton pledged not to raise taxes on individuals earning less than $250,000. In 2020, then-candidate Democrat Joe Biden pledged not to raise taxes on anyone making less than $400,000, a promise Democratic presidential candidate Kamala Harris re-affirmed this summer. TPC’s Adam Looney and Elena Patel, using TPC’s microsimulation model, show how income-specific tax pledges complicate the tax code and hamper efforts at reform.
Fiscal context from CBO. The Congressional Budget Office in its September monthly report released this week finds federal revenues from October 2023 through September 2024 totaled $4.9 trillion, while spending totaled $6.8 trillion, putting the fiscal year 2024 budget deficit at $1.8 trillion.
Next week: It’s a Man’s World—Revealing and Addressing Gender Bias in Tax Law and Policy. The American Tax Policy Institute hosts this two-day symposium Oct. 17 and 18. Thursday will feature an academic roundtable, and Friday will feature a plenary session. View the full program here and pre-register here.
Speaking of a man and tax law… A Riverside County, California, man faces six years in prison for a tax preparation scheme that cost the IRS $28 million over ten years. The man aided and assisted in preparing false tax returns. He encouraged clients to create fake corporations and put their homes, cars, and other assets in the fake corporation’s name, then improperly deducting personal expenses like mortgage and car payments and utility bills as business expenses.
Congress is not in session. The Daily Deduction will resume its regular schedule on November 11 and post twice a week until then.
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