The Big Idea Taking Off With Democrats: A Cost-of-Living Refund
Sen. Cory Booker Adds His Voice To A Growing Number Of 2020 Candidates Advocating Bold Policies That Put Money Directly Back Into Workers’ Pockets
Senator Cory Booker has joined a prominent and growing list of 2020 candidates and progressive Democrats, at the federal and state level, in calling for a Cost-of-Living Refund — a bold expansion of the Earned Income Tax Credit to include more middle class Americans. Senator Booker’s announcement makes him the fifth 2020 candidate (along with Sen. Kamala Harris, Mayor Pete Buttigieg, Rep. Tim Ryan, and Andrew Yang) to back bold cash policies that put money directly back into the pockets of those who need it the most.
Sen. Booker’s announcement shows he understands how powerful this approach can be:
“Families’ earnings are not keeping up with the cost of living…Creating a fairer, more just tax code begins with putting money in the pockets of Americans who are struggling to get ahead.”
The most pressing question for too many Americans is, “Will we have enough money this month?” to pay rent, hire childcare, put food on the table, fix the car. Today, 40% of U.S. households earn too little to afford the basics of a middle-class life. Most people wouldn’t be able to afford a $500 emergency, and of course people of color tend to face greater economic hardships.
We must reinvent an economy that works for the middle-class and those aspiring to the middle class in this country. A Cost-of-Living Refund would help hard-working Americans face the rising costs of living and housing, providing the kind of financial safety net that can often be the difference between paying an unexpected medical bill and falling into debt.
These cash policies are one of the most powerful — and by far the most direct — weapons to fight economic injustice. A Cost-of-Living Refund would:
- Provide working people a cushion of financial stability.
- Fight the rising inequality that threatens our democracy.
- Make taxes fairer, so the wealthiest actually pay their share.
- Build on a $15 minimum wage, so workers earn enough to live.
- Help close the racial income and wealth gaps.
This idea is now taking off within the Democratic Party. Senator Booker’s proposal builds on federal Cost-of-Living legislative proposals from Senator Kamala Harris, Senator Sherrod Brown, Rep. Tim Ryan, Rep. Ro Khanna, and Rep. Bonnie Watson Coleman. In addition, Senator Warren’s recently-released Tax Filing Simplification Act is a key element of a Cost-of-Living Refund proposal, making it easier for those who are eligible for the Earned Income Tax Credit to file taxes and receive those benefits.
Here’s what others are saying about a Cost-of-Living Refund:
Senator Kamala Harris: “Americans are working harder than ever but stagnant wages mean they can’t keep up with cost of living increases…We should put money back into the pockets of American families to address rising costs of childcare, housing, tuition, and other expenses. Our tax code should reflect our values and instead of more tax breaks for the top 1% and corporations, we should be lifting up millions of American families.”
Governor Gavin Newsom: “We will provide a Cost-of-Living Refund by expanding the earned income tax credit to a million more Californians who need it the most.”
Senator Sherrod Brown: “We need to give families a Cost-of-Living Refund. The cost of everything from healthcare, to rent, to college tuition is up — but for most workers, wages are flat. They need more money in their pockets to keep up.”
Robert Reich: “It’s time for a bold new idea to boost wages. Instead of helping corporations and the rich,” a Cost-of-Living Refund would “help millions of working and middle-class Americans by putting money directly in their pockets…83% of the benefits of the Trump tax cut will go to the top 1% of Americans by 2027. Expanding and modernizing the Earned Income Tax Credit can help put things back in balance.”
Congressman Ro Khanna: “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.”
Mayor Pete Buttigieg: “The income problem won’t go away and so we’ve got to look at that…By far the simplest and most effective and cost-efficient way to do it is just to give the family a little more cash…I’m attracted to structures that connect it to work, but also have an expansive version of what work is…Let’s give a little more regard to things like caregiving and raising children that are absolutely work, they’re just not in the formal economy…And some kind of structure that makes it equitable, which might be along the lines of an expanded tax credit.”