WASHINGTON, March 26 Democatic U.S. Senator
Patty Murray on Wednesday introduced legislation to expand a tax
credit for the working poor as requested by President Barack
Obama, proposing to pay for it by closing two tax breaks that
With Senate Democrats not pursuing a traditional budget
resolution this year, the targeted measure aims to help them
draw fiscal contrasts with Republicans, who will consider their
own budget plan next month.
Democrats see reducing income inequality as their core issue
for November's congressional elections.
Murray's bill would increase the maximum Earned Income Tax
Credit for childless workers to about $1,400 from $487 currently
and reduce the childless worker eligiblity age for the credit
from 25 to 21.
It also would create a new tax deduction for low-to-middle
income families with two incomes and at least one child,
allowing a 20 percent deduction on the secondary earner's
income. This would also help increase EITC benefits by reducing
earned income for purposes of calculating the credit.
It is not clear whether Senate Majority Leader Harry Reid
will move quickly to bring the measure to a Senate vote. A
spokesman for Reid said no action had yet been scheduled.
Murray, the Senate Budget Committee chairwoman and a member
of Senate Democratic leadership, said the bill would complement
Democrats' efforts to raise the minimum wage to $10.10 an hour
from a $7.25 federal minimum.
"Struggling families face a lot of challenges to getting
ahead today. The very least we can do is keep our tax code from
forcing families to take a half-step back for every step
forward," she said in remarks on the Senate floor.
The measure, dubbed the "21st Century Worker Tax Cut Act"
contains provisions similar to those in Obama's fiscal 2015
budget request released earlier this month. But it has little
chance of passage in the House of Representatives, where
Republicans who control the chamber want to keep all revenues
from the closures of tax loopholes and other breaks to help
lower tax rates as part of comprehensive tax reform.
The expanded low income tax credits in Murray's bill would
cost $144.9 billion over 10 years, which would be paid for by
closing widely criticized tax breaks for corporations and
These include subjecting stock options paid to executives to
a $1 million annual cash compensation limit per employee for
corporate tax deductions. Companies can now claim larger
deductions by paying executives in stock options that do not
fall under the cash compensation rule.
The measure also would make changes aimed at deterring
companies from shifting U.S. profits to offshore tax haven
countries such as Bermuda and the Cayman Islands. It would
subject such profits to an effective tax rate of 15 percent
unless they were derived from legitimate business operations in
a foreign country.
(Reporting By David Lawder)