Take notice!
13th May 2019 · 0 Comments
While most recent media attention has centered on the four major white Democratic presidential candidates, the policy that may constitute the party platform in 2020 election has been being crafted by the two leading African-American Presidential candidates, with the influence of the sole major Asian candidate fueling their ideas.
It’s a middle-class tax cut taking the form of a minimum basic income. Senators Kamala Harris of California and Cory Booker of New Jersey have each proposed what is essentially a massive expansion of the Earned Income Tax Credit so that married couples who make less than $100,000 a year will earn an additional $500 to $650 per month back as a refundable tax credit.
The concept is a variation on Democratic presidential candidate Andrew Yang’s proposal for a Universal Basic Income. The Silicon Valley millionaire wishes to fight the coming automation of service sector jobs—as well as existing income disparity—with $1,000 a month check to every American. Paid for by a value-added tax at half of the European level, corporations that currently don’t pay taxes would underwrite the $900 billion cost of the UBI. Elegantly, under his plan, if you accept a “freedom dividend” check, you forswear all other government programs other than Medicaid/Medicare or Social Security.
Many Democrats though, even those of the very progressive variety, have a problem with people receiving a check for doing nothing. Booker’s EITC expansion and Harris’ LIFT Act answer those concerns. In order to get the monthly payment of $650 (or a lump sum of $7,800 if one prefers), a married couple must earn $6,000 a year, as current EITC rules mandate. ($3,000 for an individual.) Likewise, those who already earn a salary do not qualify for welfare, etc., so the same goal is achieved without political complications.
Booker’s and Harris’ proposals have the added benefit of being scored as a tax cut under fiscal rules. So any tax increases that they wish to enact to underwrite the costs of the EITC hike constitute merely “revenue neutral” changes. It would be hard for Donald Trump to brand either Senator as “a tax and spend liberal” when these African-American presidential candidates effectively cut taxes at the same time as increasing them. By increasing the EITC threshold to $100,000, as Harris seeks, or $90,000 as Booker desires, each achieves the long promised, but never fulfilled, Clintonite middle-class tax cut.
Legitimate questions exist as to whether the corresponding tax increases advocated by Harris and Booker will provide enough money to pay for their tax cuts.
Andrew Yang’s proposal for a VAT stands as more fiscally feasible in that regard. Still, the idea of a UBI through the EITC seems to have captured the imagination of the entire Democratic Presidential field. Everybody is seemingly jumping on board with the concept pushed by the two Black candidates. And in fact, Yang has praised both concepts, as have Joe Biden and Beto O’Rourke. In just a few months, EITC expansion stands on the cusp of becoming official Democratic Party policy.
Harris’ LIFT Proposal has even kept some support in California that she desperately needs to be a contender in that March 3, 2020 primary — as Mayor Pete Buttigieg has begun to surge in her home state with some of the same LBGTQ activists who previously contributed and supported her campaign. Imagine if an EITC middle-class tax cut propels one of the Black contenders past the more prominent Caucasian frontrunners to earn the Democratic presidential nomination.
This article originally published in the May 13, 2019 print edition of The Louisiana Weekly newspaper.