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1 Kyle Pomerleau, Analysis of Senator Kamala Harris's "LIFT the Middle-Class Act" 1 (2018)

handle is hein.taxfoundation/assostkah0001 and id is 1 raw text is: 9U TNAnalysis of Senator Kamala Harris's LIFT the Middle-Class Act FISCAL Kyle Pomerleau Economist and Director, No. 619 Center for Quantitative Analysis Oct. 2018 Key Findings Senator Kamala Harris (D-CA) announced plans to introduce legislation to create a new refundable tax credit that would be available to low- and middle- income taxpayers, called the LIFT the Middle-Class Act. The LIFT credit would reduce federal revenue by $2.7 trillion between 2019 and 2028 on a conventional basis. LIFT would slightly increase the weighted average marginal tax rate on labor, leading to 825,906 fewer full-time equivalent jobs and a 0.7 percent smaller economy in the long run. Pretax wages would remain unchanged. The smaller projected economy over the next decade would result in slightly lower revenue collections. As a result, we estimate that this proposal would reduce federal revenue by $2.8 trillion on a dynamic basis. LIFT would greatly increase the progressivity of the tax code by raising the after-tax incomes of the bottom 20 percent of taxpayers by 20.5 percent. Overall, taxpayer after-tax income would rise by 2.4 percent. The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, and local levels. We are a 501(c)(3) nonprofit organization. ©2018 Tax Foundation Distributed under Creative Commons CC-BY-NC 4.0 Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org