Today, U.S. Senator Josh Hawley (R-Mo.) published an opinion piece outlining a new proposal that would make a series of common income tax breaks refundable against payroll taxes. At a time when prices are high, Senator Hawley highlights how his proposal would deliver a historic tax cut for working families across the country.
Read Senator Hawley’s full op-ed here or below.
Time was, Republicans knew how to do tax cuts. Reagan-era columnist Robert Novak once quipped, “God put the Republican Party on Earth to cut taxes.” But Republicans in Washington these days could use a refresher course.
The negotiations over President Donald Trump’s “big, beautiful” budget bill have to date included surprisingly little talk of tax cuts for the people who need them most: America’s working class. These are the people who make less than $80,000 per year. These are the people who delivered an electoral victory for Trump. And these are the Americans Washington policy types have largely forgotten for a generation. Republicans should remember them now — and deliver for them the largest tax cut in our lifetime.
The American working class needs a break. Manufacturing jobs that once provided a good living for many workers and a sure future for many families have disappeared. Blue-collar workers haven’t gotten a real pay raise in decades. Mortgages are unaffordable. Rent is unaffordable. Groceries are unaffordable.
All this takes a toll on the spirit as much as the checkbook. To find jobs, young people move away from the places where they grew up. Families are pulled apart, and small towns wither and die. To afford children, parents take multiple jobs, work around the clock, and return home exhausted and despairing. To survive in the present, many Americans live with no hope for the future: no time for neighborhood or church or family life.
And, in this way, the economy Washington has fashioned for the working class unravels the fabric of the nation.
Republicans can begin to repair it. They can give America’s working people a lifeline by giving them the biggest working-class tax cut in our history. Here’s how: Make the largest income tax credits — the home mortgage deduction, the child tax credit and the charitable deduction — available to all Americans who pay the payroll tax.
These popular tax credits provide billions in tax relief every year. But, as it stands, you have to earn a considerable amount of money, and pay a considerable amount of income tax, before these credits become fully available. Yet two-thirds of Americans pay more in payroll taxes than they do in income taxes. And most working-class Americans pay little or no income tax at all.
That doesn’t mean they are freeloading. Mitt Romney’s infamous barb about “the 47 percent” who allegedly pay no taxes was never accurate: America’s working people pay billions in taxes every year — but mostly in payroll taxes, the 15 percent levied on every paycheck and sometimes split with employers. And that’s no small burden. In fact, the federal government takes in well over $1 trillion of this tax every year.
But, for working people, the bottom line is, despite the chunk taken out of your paycheck every few weeks, you don’t qualify for the generous tax relief upper-income earners receive.
Republicans should fix this now. Make the home mortgage interest deduction, the child tax credit and the charitable deduction available against the payroll tax. That is to say, allow Americans earning a wage and paying the payroll tax to claim these credits to offset their tax liability.
To understand what this tax cut would mean in the real world, consider these real-world people from my home state of Missouri.
One is a father of six and pastor of a small church in the small town where he grew up. Under my proposal, on his annual salary of roughly $80,000, this constituent would save $6,582. A year.
And then there’s a wife and mother who shared her financial concerns with my office in a letter: “I’m writing to you as the new mother of twin girls and the wife of a police officer, who is struggling in this economy,” she explained. “In order to work, we are paying $33,000 a year for daycare …. The cost of inflation is crippling us hardworking, middle-class families … ”
The couple has two daughters and a mortgage and takes a standard deduction. We ran the numbers. They would save $7,500 under my proposal. And their family could use that money.
Every working family could use the money. And they deserve it. They earned it, after all. Republicans should get back to doing what they once did best: cutting taxes for the people who make this nation work.
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