Indian American freshman U.S. Rep. Ro Khanna, D-Calif., and U.S. Sen. Sherrod Brown, D-Ohio, Sept. 13 introduced legislation in the Senate and House that would give working families a wage boost to compensate for 40 years of wage stagnation.
The Grow American Incomes Now, or GAIN Act, would greatly expand the Earned Income Tax Credit so that more working families and childless workers are eligible to receive it, according to a news release distributed by Khanna’s office.
“The EITC is already proven at lifting people out of poverty. By strengthening it to reach more families and individuals, it can have a lasting impact on our economy,” said Khanna. “In today's age of automation and globalization, where work is sometimes seasonal and hours are often curtailed, this bill provides every hard-working American with a fair income for their labor.”
The bill comes at a time when the Trump administration and Republicans are supporting devastating budget cuts to programs that help working families in exchange for tax breaks for the very wealthy and big corporations, the statement noted.
Under the proposal, the maximum tax credit available increases to $12,131 for families with three or more qualifying children; $10,783 with two qualifying children; $6,528 with one qualifying child; and $3,000 with no qualifying children, the statement said.
Currently, a family of three can receive a maximum credit of $6,318 and someone with no children can receive at most a $510 tax credit, it added.
The proposed EITC expansion, eligible for people at least 21 years old, would also be phased out at higher income levels and remain fully refundable. It would allow for a worker with no children who makes up to $37,113 annually to still be eligible to receive the tax credit and covers a family with three or more children making up to $75,940 a year to receive the EITC, Khanna’s statement noted.
“Americans are working longer hours, but too many aren’t seeing that hard work reflected in their pay. And worse—our tax system can actually tax workers into poverty. That’s not how we grow our middle class or our economy,” said Brown in a statement. “Updating the EITC will make sure all workers can keep more of the money they earned for their work.”
The bill also has a provision for workers living paycheck to paycheck, providing Early Refund EITC as an alternative to payday loans and other predatory lending products, with a cap of $500 each year.
Instead of receiving the lump sum once a year, this early refund makes it easier for working families and individuals to pay their monthly bills and provide financial security, according to the statement.
More than 50 members of Congress – all Democrats – are co-sponsoring the bill, including fellow Indian American freshman U.S. Rep. Pramila Jayapal of Washington.