The Republican Party has just taken over both houses of Congress for at minimum the next two years – so this may seem an odd time for House Democrats to announce major policy proposals to raise the fees paid by the financial services industry and taxes on the wealthy, all in an effort to give a tax break to the middle class.
Yet there was Rep. Chris Van Hollen (D-MD) on Monday, in a speech at the left-leaning Center for American Progress, proposing a $1.2 trillion redistribution of wealth from the richest Americans to a large swath of middle- and lower-income earners over the next 10 years.
Van Hollen’s centerpiece proposal, the Paycheck Bonus Tax Credit, would cut taxes by $1,000 per year per worker, up to $2,000 for a couple earning a combined $200,000 or less. The proposal would also give an extra $250 credit to individuals who save at least half their $1,000 credit in an eligible investment vehicle.
In a release, Van Hollen said, “Our current tax code imposes higher tax rates on income earned through hard work, while providing preferential treatment to unearned financial gains and allowing billions of dollars of stock profits and other capital gains to pass tax-free to heirs of multi-million-dollar fortunes.”
“Taken together,” he continued, “the preferential tax treatment of certain kinds of non-work, unearned income has contributed to a startling result: 17 percent of the major tax expenditures in the tax code flow to households with the top 1 percent of incomes. That translates into roughly $150 billion in tax breaks for the very wealthy each year. We need to do more to even the playing field and ensure that the tax code increases the take-home income of working Americans and does not just reward wealth.”