How Trump and Congress can help Rust Belt and low-income families through tax reform


Working class families spoke up loud and clear during the 2016 election, and it would behoove the President and Congress to listen to them now. April Ponnuru fleshes out a few ideas over at the Washington Examiner…

…As Congress takes up tax reform, two ideas deserve careful consideration. Tax reform legislation could expand the earned income tax credit, one of the most powerful initiatives the federal government has ever taken against poverty. The credit supplements the wages of low-income workers, and thus draws people into the labor force. It helps people, that is, get on the ladder of economic success. That’s important for them, but also for our society at a time when labor force participation has been shrinking.

The earned income tax credit has enjoyed bipartisan support in the past and still does today. Both Paul Ryan and former President Barack Obama have called for expansion. President Trump has sometimes spoken positively about raising the minimum wage, which seeks some of the same objectives but has more drawbacks. An expansion in the earned income tax credit would deliver benefits to those in the workforce who need them most, while teenagers in affluent households would capture some of the gains from an increased minimum wage. Expanding the EITC also poses much less risk of destroying low-wage jobs.

Helping families with the cost of raising children is another area where bipartisanship may be possible. President Trump said during the campaign that government should change tax policy to make child care more affordable and should offer families with stay-at-home moms benefits at parity with other households. His main policy proposal toward these ends was an income tax deduction for the cost of child care, with the deduction capped in each state at the average cost of care….

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