One Big Change Kamala Harris Wants to Make to Increase Your Income by $500 a Month
by Christy Bieber | Nov. 24, 2020
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Could you end up with a lot more take-home income under the future VP's plan?
Vice President-Elect Kamala Harris has put many bills forward during her time as a senator. But one proposal -- the LIFT the Middle Class Act -- could have an especially big impact on the lives of American families.
"LIFT" stands for Livable Incomes for Families Today. If it were to become law, some families could see their incomes increase by as much as $500 per month. That's if Harris is able to push it through Congress once she takes the country's second-highest office.
How the LIFT the Middle Class Act could change your family's finances
When Senator Harris introduced the LIFT the Middle Class Act in October of 2018, she said, "We should put money back into the pockets of American families to address rising costs of childcare, housing, tuition, and other expenses."
In a press release, Senator Harris indicated the act could improve the financial situation of American families. "Americans are working harder than ever but stagnant wages mean they can’t keep up with cost of living increases,” she explained. "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."
The LIFT the Middle Class Act would provide annual tax credits to individuals and families. Specifically:
- Single filers earning under $50,000 per year would receive up to $3,000 per year or $250 per month
- Households with annual incomes under $100,000 would get up to $6,000 per year or $500 per month
This money would be available as a refundable credit. If it reduced your tax bill to below $0, you could actually get money back. For example, if a family was entitled to a $6,000 credit but only owed $4,000 in federal taxes, the $6,000 credit would wipe out their tax bill entirely and the family would get $2,000 back from the IRS.
According to the Institute on Taxation and Economic Policy, as many as half of all workers and two-thirds of children in the U.S. would benefit from the LIFT the Middle Class Act. The act was introduced two years ago but is more relevant than ever. The extra cash would benefit those who are struggling financially due to COVID-19 and the absence of a second stimulus check.
Could the LIFT the Middle Class Act become law?
The LIFT the Middle Class Act will need to pass several major obstacles. As the new VP, Harris will have the president's ear and the opportunity to lobby for progressive policies such as the LIFT the Middle Class Act. However, that doesn't necessarily mean this legislation will be a priority for the Biden administration.
Even if Biden pushes the bill, there's no guarantee Congress will vote on it. It's the House speaker and Senate majority leader who determine what legislation is considered. And if the bill does come up for a vote, it's likely to be greeted far more warmly by those on the left. Republican lawmakers may express concern at the estimated $270 billion price tag and argue it amounts to a redistribution of wealth.
If you're hoping to receive the extra $500 per month, the odds will be better if the Democrats take control of the Senate. And that depends on the two upcoming runoff elections in Georgia. However, the Republicans are favorites for at least one of the two Georgia seats. If the GOP retains control, the LIFT the Middle Class Act is most likely dead on arrival in the Senate.
Still, the fact that the vice president-elect is in favor of this legislation means it could still stand a chance in the future -- especially if the Democrats take the Senate majority in 2021 or after the 2022 midterm elections. If you're struggling to pay the bills and feel that receiving an extra $250 or $500 each month in your bank account could help, the act still stands a chance. Feel free to let your representatives know your opinion on the LIFT the Middle Class Act.
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About the Author
Christy Bieber is a personal finance and legal writer with more than a decade of experience. Her work has been featured on major outlets including MSN Money, CNBC, and USA Today.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
