(Washington, D.C.) – Today, Senate Budget Committee Chairman Patty Murray (D-WA) delivered remarks on the Senate floor, discussing the 21st Century Worker Tax Cut Act. In her speech, Murray highlighted how policies like the Earned Income Tax Credit have succeeded in helping millions of households lift themselves out of poverty, and noted that too many struggling workers and families are still left behind under our outdated tax code. Murray explained that the 21st Century Worker Tax Cut Act would build on work incentives in the EITC, and complement critical reforms like raising the minimum wage, by providing targeted tax cuts to workers and families designed for today’s workforce, in a fiscally responsible way.

Read more about the 21st Century Worker Tax Cut Act here.

Key Excerpts From Senator Murray’s Speech:

“…our workforce has changed a lot in the last few decades. Thirty years ago, the majority of families with children had only one parent working outside the home. More of the country’s low wage workers were teenagers earning some extra spending money.”

“But today, two thirds of families with children rely on earnings from both parents. And the millions of low wage workers in our country are far less likely to be teens supplementing their allowance—and far more likely to be adults struggling to support a family. It has also gotten harder for young people just starting out to find work that puts them on a strong path. And there is a very concerning pattern of young people dropping out of the labor force rather than keeping up the search. These are the kinds of trends that we need to be thinking about as we look for ways to help today’s workforce succeed in today’s economy.”

“The way our tax code is currently structured, the second earner in a household often pays a higher tax rate on his or her earnings than the first. Making matters worse, when a second earner decides to enter the workforce, the family usually faces many new costs, such as child care and transportation. The family can also lose eligibility for credits like the EITC and other benefits. Add it all up, and many struggling two-earner families end up taking home a smaller percentage of their paycheck than many of the wealthiest households in America do. These realities can discourage a potential second earner, like a mother considering re-entering the workforce, from returning to her professional career.”

“…today, too many struggling workers and families are left behind under our outdated tax code. It is time to build on these efforts to support work—including the critical expansions of the EITC in 2009, which should be made permanent—and update our tax code so that it reflects the needs of today’s workforce.”

“…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.  And that’s exactly the problem the 21st Century Worker Tax Cut Act would help to solve.”

“…the bill also reflects the reality that workers without dependent children, and young workers just starting out, are being left behind under the current EITC. Unlike low-income workers with kids at home, workers without dependent children receive little or nothing from the credit… In an economy where more low-wage earners are middle-aged, and where young people are struggling to gain a toehold in the job market, this just doesn’t make sense.”

“…workers and families are playing fair—and the biggest corporations should too. That’s why this bill would be paid for by closing loopholes the biggest corporations take advantage of… There is bipartisan support for closing these loopholes. Both Democrats and House Ways and Means Chairman Dave Camp (R-MI) have proposed eliminating each of them.”

Full Text of Senator Murray’s Speech:

“M. President, our workforce has changed a lot in the last few decades.

“Thirty years ago, the majority of families with children had only one parent working outside the home.

“More of the country’s low wage workers were teenagers earning some extra spending money.

“But today, two thirds of families with children rely on earnings from both parents.

“And the millions of low wage workers in our country are far less likely to be teens supplementing their allowance, and far more likely to be adults struggling to support a family.

“It has also gotten harder for young people just starting out to find work that puts them on a strong path.

“And there is a very concerning pattern of young people dropping out of the labor force rather than keeping up the search.

“M. President, these are the kinds of trends that we need to be thinking about as we look for ways to help today’s workforce succeed in today’s economy.

“And there are many steps we can and absolutely should take to tackle the barriers our workers and families are facing.

“We should start with raising the minimum wage—because no one working full-time in the United States should have to live in poverty…

“And because the low-wage workers in today’s economy—who are putting in long hours while raising their children, paying taxes, and trying to pay the bills—deserve a better shot at success.

“But that’s not the last step we need to take.

“M. President, as we are looking for ways to expand opportunity for struggling workers and families, we should be using every tool in the box—including our tax code.

“Policies like the Earned Income Tax Credit have succeeded in helping millions of households lift themselves out of poverty, which is why Republicans and Democrats have come together to strengthen the EITC many times in the past.

“But today, too many struggling workers and families are left behind under our outdated tax code.

“It is time to build on these efforts to support work, including the critical expansions of the EITC in 2009, which should be made permanent, and update our tax code so that it reflects the needs of today’s workforce.

“That’s why today I am introducing the 21st Century Worker Tax Cut Act, a bill that would complement critical reforms like raising the minimum wage by providing targeted tax cuts designed for today’s workforce, paid for by closing wasteful loopholes both Democrats and Republicans have proposed eliminating.

“M. President, the 21st Century Worker Tax Cut Act would put in place a new tax deduction to help struggling families with two workers keep more of what they earn.

“The way our tax code is currently structured, the second earner in a household often pays a higher tax rate on his or her earnings than the first.

“Making matters worse, when a second earner decides to enter the workforce, the family usually faces many new costs, such as child care and transportation.

“The family can also lose eligibility for credits like the EITC and other benefits.

“Add it all up, and many struggling two-earner families end up taking home a smaller percentage of their paycheck than many of the wealthiest households in America do.

“These realities can discourage a potential second earner, like a mother considering re-entering the workforce, from returning to her professional career.

“M. President—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.

“And that’s exactly the problem the 21st Century Worker Tax Cut Act would help to solve.

“This bill would give working families a 20 percent deduction on the second earner’s income.

“A mom or dad who gets back in the workforce and brings home an extra $25,000, for example, would get a $5,000 deduction.

“For a family in the 25 percent bracket, that means $1,250 back in their pocket for groceries, child care, or retirement savings.

“M. President, the bill also reflects the reality that workers without dependent children, and young workers just starting out, are being left behind under the current EITC.

“My colleague, Sen. Brown, has been a leader on this issue – and is a cosponsor of this bill.

“Unlike low-income workers with kids at home, workers without dependent children receive little or nothing from the credit.

“As workers file their 2013 tax returns this spring, a single worker with no dependent children is eligible for a maximum credit of only $487.

“She is entirely phased-out of the credit once her income reaches just $14,340, which is roughly what a full-time, minimum-wage worker would earn in one year.

“And young, childless workers under 25, who are starting out in a tough labor market, aren’t eligible at all.

“In an economy where more low-wage earners are middle-aged, and where young people are struggling to gain a toehold in the job market, this just doesn’t make sense.

“The 21st Century Worker Tax Cut Act would increase the EITC for workers without dependent children to about $1,400 next year, and expand the income range over which workers are eligible for the credit.

“And it would also lower the eligibility age for the childless worker to qualify for the EITC from 25 to 21, so that young workers without dependents get the same incentives that have helped so many others get on their feet.

“The Treasury Department estimated EITC changes similar to these would help more than 13 million struggling workers climb the economic ladder.

“As we expand the EITC, M. President, we have a responsibility to do everything we can to make sure this credit is going straight to the workers and families who need it.

“And part of that responsibility is to ensure EITC claims are filed correctly.

“M. President, professional tax return preparers complete 70 percent of EITC claims.

“And under the 21st Century Worker Tax Cut Act, they would receive twice the current penalty if they don’t follow due diligence requirements put in place by the IRS. 

“M. President, workers and families are playing fair—and the biggest corporations should too.

“That’s why this bill would be paid for by closing loopholes the biggest corporations take advantage of.

“The 21st Century Worker Tax Cut Act would draw on a proposal from my colleague Senator Reed of Rhode Island, a cosponsor of this bill.

“Senator Reed’s proposal closes a loophole that lets corporations claim outsized tax breaks by paying executives in stock options instead of regular paychecks.

“This bill would also stop multinational corporations from shifting profits into tax havens like Bermuda and the Cayman Islands to avoid paying their fair share.

“There is bipartisan support for closing these loopholes, M. President.

“Both Democrats and House Ways and Means Chairman Dave Camp (R-MI) have proposed eliminating each of them.

“And updating our tax code to give tax breaks to struggling workers, instead of big corporations, is just the right thing to do.

“M. President, as we continue this important debate about how to expand opportunity to those who are struggling, we need to make sure we are giving today’s workforce the best shot at success in today’s economy.

“We should increase our outdated minimum wage to give millions of workers a raise, and then Democrats and Republicans need to come together to update our tax code, and give today’s struggling workers the tax relief they deserve. 

“The 21st Century Worker Tax Cut Act would be a strong, fiscally responsible step toward that bipartisan goal, and I am hopeful that we can get this done for our workers as quickly as possible.”

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