Big Labor Backs Doomed Tax Plan
Big labor praised Democratic Rep. Chris Van Hollen Monday for his aggressive new plan designed to redistribute wealth to middle class workers.
“Congressman Chris Van Hollen is showing the kind of leadership that has become far too rare in Washington, DC today,” AFL-CIO president, Richard Trumka, said in a statement.
“Many of the policy prescriptions he outlined today are part of the blueprint to seriously addressing income inequality,” he continued. “Together, they represent a major moment in progressive leadership that brings bold ideas to the forefront.”
“A modest Wall Street speculation tax, or ‘high-roller fee’ as Rep. Van Hollen has proposed, will help curb harmful Wall Street practices and raise billions of dollars annually,” Trumka noted. “These are critical funds that could pay for infrastructure and education to lay the foundation for long-term productivity growth. Additionally, Rep. Van Hollen is absolutely right to deny tax breaks for ridiculous, out of control CEO pay – they don’t need any more handouts.”
But not everyone sees this proposal as being beneficial to growing the economy or helping middle class workers.
“You don’t raise the income of the middle class by taxing the income of the wealthy. You raise the income of the middle class by growing the economy,” Ryan Ellis, the Tax Policy Director at Americans for Tax Reform, told The Daily Caller News Foundation.
The proposal is designed to help increase the income of middle class workers through tax incentives for both workers and employers. Along with providing middle class workers a $1,000 tax credit and an additional credit for when they save part of their income, Van Hollen is also proposing the CEO-Employee Paycheck Fairness Act.
The act is designed to incentivize employers to pay their employees more by preventing employers from taking large tax credits unless their workers are being paid enough relative to their productivity and cost of living.
“Our challenge is to implement a strategy to rapidly grow our economy in a way that creates greater prosperity for all, not just the wealthy few,” Van Hollen noted while presenting his proposal at the Center for American Progress.
“First it’s designed to promote bigger pay checks, and second it lets middle class workers and those working their way into the middle class keep and save more of what they earn,” Van Hollen noted.
“Paychecks and compensation for most Americans has been very flat in real terms and as you can see, this has become a chronic problem dating back to the 1970s, there’s a discount between the value workers are creating and what they a taking home,” Van Hollen argued. “The income gains from increased productivity have gone overwhelming to those at the very, very top of the income scale, the top one percent.”
But Ellis explained how focusing on making the entire economy healthier is a better strategy to help the middle class. “How do you grow the economy? If you’re talking taxes, this is best done by lowering taxes on capital investment, lowering the double taxation of savings, and lowering marginal tax rates on business earnings,” Ellis argued. “That doesn’t mean you can’t also cut taxes for working families, but its tax cuts on business capital in particular which will do the most to help.”
“A rising tide lifts all boats, including wages,” Ellis said.
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