WASHINGTON, D.C. – Today, U.S. Senator Sherrod Brown (D-OH) and U.S. Representatives Bonnie Watson Coleman (D-NJ) and Ro Khanna (D-CA) announced plans to reintroduce legislation that will give American workers a ‘Cost-of-Living Refund’ to compensate for decades of rising costs and stagnant wages. The members announced their legislation this week as news reports indicate that Americans are receiving smaller refunds than expected under President Trump’s tax law.

The EITC Modernization Act, authored by Watson Coleman, and the Grow American Incomes Now (GAIN) Act, authored by Khanna, would:

  • Roughly double the Earned Income Tax Credit for working families, increase the credit for childless workers almost sixfold, and make millions more Americans eligible. Roughly 50 million Americans would get anywhere from $3,000 to $12,000 back in their pockets under this provision of the bill.
  • For the first time, extend the credit to students and people raising children or caring for ageing parents and other relatives.
    • A recent study by AARP and the National Alliance for Caregiving found that almost 40 million Americans are providing unpaid care. A study by GAO found that almost a third of all college students experience food insecurity.
  • Allow people to claim an annual $500 advance on the credit, interest free, in order to cover emergency expenses. This provision provides an alternative to predatory, payday lenders.
  • Set a minimum baseline EITC payment for students and caregivers of $100 a month ($1,200 a year).
  • Create an option for recipients to receive their benefits monthly, to help cover day-to-day expenses as they arise.

Brown has introduced a single bill in the Senate that includes many of these provisions, and previously introduced the Senate version of the GAIN Act.

Sign Up for E-News

“All across the country, hard work isn’t paying off like it should. Corporate profits have soared, executive compensation has exploded, but wages are flat. Meanwhile the cost of everything from healthcare to education and housing is up,” said Brown. “We need to put more money back in the pockets of working people and that’s what this bill does.”

“We know that the economy isn’t working for most Americans. We also know that for years, the EITC has worked to lift people out of poverty. Expanding eligibility for this credit to those seeking better lives through higher education or working the equivalent of a full-time job to care for a family member just makes sense,” said Watson Coleman. “If we can cut taxes for billionaires and corporations, we should be chomping at the bit to help people striving for the middle class.”

“The EITC is already proven at lifting people out of poverty. By strengthening it to reach more families and individuals, it can have a lasting impact on our economy. In this modern age of automation and globalization, where work is sometimes seasonal and hours are often curtailed, this bill provides every hard-working American with a fair income for their labor,” said Khanna.

The EITC is a refundable tax credit for low- and moderate-income working individuals, primarily focused on couples with children. It reduces the amount of tax that that individual would owe with the possibility of receiving a refund after filing taxes. Watson Coleman’s bill would extend eligibility for this credit to caregivers and independent students pursuing higher or vocational education, providing a measure of financial stability to both groups that will help drive economic growth across the communities in which they reside.

Language in both the GAIN Act and the Senate measure would roughly double the EITC for working families and increase the credit for childless workers almost sixfold. Under the proposal, the maximum tax credit available increases to $12,349 for families with three or more qualifying children; $10,976 with two qualifying children; $6,370 with one qualifying child; and $3,054 with no qualifying children. Currently, a family of three can receive a maximum credit of $6,431 and someone with no children can receive at most a $519 tax credit.