- The Washington Times - Monday, January 12, 2015

House Democrats, fresh off massive election losses, say the problem is they didn’t make a bold enough case for tax increases and wealth transfer to the poor. They rectified that Monday with a speech by Rep. Chris Van Hollen proposing tax increases on the wealthy with the money going straight to tax cuts for the poor and middle class.

The plan uses tax laws to encourage employee wage increases, reduce tax breaks for Wall Street and slap another fee on financial transactions. The government would dole out $1,000 tax credits for most workers and increase a slew of other tax credits for poor and middle-class families.

“This is a plan to grow the paychecks of all, not just the wealth of a few. This proposal attacks the chronic problem of stagnant middle-class incomes from both directions. It promotes bigger paychecks and lets workers keep more of what they earn,” Mr. Van Hollen, the ranking member on the House Budget Committee, said in a speech announcing the plan at the Center for American Progress, a liberal think tank in Washington.

The Maryland Democrat said the proposal would restore balance to a tax code that “is now skewed in favor of people who make money off of money and against those who make money off of work.”

The plan built upon the liberal populism that dominates the Democratic agenda for confronting a Republican-controlled Congress, such as the push to raise the minimum wage and reducing student loan debt. But it went further by offering workers a direct cash payment.

The package of tax measures is all but dead on arrival in Congress. Instead, the document will become the tip of the spear for Democrats taking on the Republican majority and for the party’s White House run next year.

The proposal, which Mr. Van Hollen called an “action plan,” included:

⦁ A $1,000 “paycheck bonus tax credit” for every worker making less than $100,000 a year or a $2,000 credit for every couple filing joint returns who earn less than $200,000 a year.

⦁ A “saver’s bonus” of $250 each year for individuals who put at least $500 of their paycheck bonus tax credits or earned income tax credits into tax-preferred savings accounts.

⦁ The CEO-Employee Paycheck Fairness Act that bars big corporations from claiming tax deductions for CEO and other corporate compensation over $1 million unless their workers are getting paycheck increases that reflect increases in worker productivity and the cost of living.

⦁ Updating the child and dependent care tax credit by raising the amount of eligible expenses, indexing the caps for inflation and making the credit refundable.

⦁ A “second-earner tax deduction” that would increase the take-home pay of two-earner families with 20 percent tax deductions for second earners with dependents on up to $60,000 of their income.

“We can pay for these new tax benefits for working Americans by changing the ways our current tax code is rigged in favor of those who make money off of money, and against those who make money from work,” Mr. Van Hollen said.

He said the cost would be covered with two measures, curbing tax breaks for the financial services industry and imposing a small fee on Wall Street transactions.
The proposal was cheered from the left, including AFL-CIO President Richard Trumka, who credited Mr. Van Hollen with bringing “bold ideas to the forefront.”

“Working people want not only to hear what leaders think about raising wages and income inequality, but what they’ll do about it. Rep. Van Hollen is doing exactly that,” he said.

House Budget Committee Chairman Tom Price, Georgia Republican, said that repairing the tax code shouldn’t be about redistributing wealth.

“We welcome our Democrat colleagues to the conversation about how we can fix our broken tax code and improve the financial security of American families. But Washington shouldn’t be in the business of picking winners and losers in the economy,” he said in a statement. “We should focus on fundamental tax reform that builds a foundation for job creation and economic growth.”

In a separate speech, Mr. Price outlined a conservative agenda that focuses on combating federal debt and reining in expensive entitlement programs such as Medicare.

Mr. Price signaled that a top priority for Republicans would be to build off of the budget proposal by Rep. Paul Ryan, Wisconsin Republican and the party’s 2012 vice-presidential nominee, that would transition Medicare into a voucher-type program for future retirees.

He said one of the most important things the Budget Committee can do is to “normalize” the debate about issues such as federal entitlement programs.

“Four years ago, nobody would have given us a prayer — a prayer — to be able to lay out a solution to save and strengthen and secure Medicare and thought that we would be able to sustain the onslaught coming from the other side,” he said. “We worked and we worked and we worked and we convinced our colleagues and convinced our friends and moved forward … with a positive solution — so positive that the Romney-Ryan team in 2012 on that proposal won the senior vote in this country.”

Mr. Price delivered the speech at the 2015 Heritage Action Conservative Policy Summit, a two-day event hosted by the political arm of the conservative Heritage Foundation.

• S.A. Miller can be reached at smiller@washingtontimes.com.

• David Sherfinski can be reached at dsherfinski@washingtontimes.com.

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