WASHINGTON, D.C. – As Republicans work to pass their tax breaks for big corporations and Wall Street investors, U.S. Senator Tammy Baldwin (D-WI) and her colleagues introduced two bills to cut taxes for Wisconsinites. First, Senator Baldwin introduced the American Family Act, which would give middle-class families up to a $6,360 tax cut by making the enhanced child tax credit permanent. Senator Baldwin also introduced the Tax Cuts for American Workers Act, which would give working Americans without children up to a $1,500 tax cut by bolstering the Earned Income Tax Credit.
“President Trump came into office promising to bring down costs for Wisconsin families on Day One. Instead, he’s launched a trade war, raised prices on families, and created economic uncertainty for Wisconsin businesses and farmers,” said Senator Baldwin. “I’m proud to push for these tax cuts that will give Wisconsin workers and families some well-deserved breathing room. While my Republican colleagues decide how much to cut from programs like Medicaid to pay for Wall Street tax breaks, I’m focused on bringing down costs for hardworking Wisconsinites.”
Today, Senator Baldwin announced she sponsored the following bills to deliver tax relief for working Wisconsinites:
American Family Act
The 2021 expansion of the Child Tax Credit (CTC) in the American Rescue Plan Act led to a historic reduction in poverty in the United States, particularly for children. Research showed that child poverty fell immediately and substantially to 5.2%, its lowest level on record. Despite this, Congress allowed the expanded CTC to expire. The poverty rate for children more than doubled to 12.4 percent in 2022.
The American Family Act would expand the Child Tax Credit (CTC) by:
- Increasing Relief: Increases the value of the CTC from the current level of $2,000 per child to $6,360 for newborns, $4,320 for children ages one through six, and $3,600 for children age six through 17;
- Providing Fix for Low-Income Children: Ends the longstanding, discriminatory policy that reduces the value of the Child Tax Credit for low-income families, ensuring that the families of 17 million low-income children left out of the CTC under current law will receive the same credit as families in the middle class. As of 2023, about 238,000 Wisconsin children, or 20.4 percent of residents 17 and below, are ineligible for full CTC due to family incomes being too low;
- Paying Tax Credit Monthly: Provides for monthly delivery of the credit so families have access to the credit as bills arrive; and
- Ensuring Credit Keeps Up with Inflation: Indexes the CTC for inflation to preserve the value of the credit moving forward.
Tax Cuts for American Workers Act
The existing Earned Income Tax Credit (EITC) – the Worker Tax Cut – has been delivering tax relief for millions of workers for decades. An estimated 236,000 workers without children in Wisconsin would benefit from the proposed EITC expansions in 2024. In 2023, over 305,000 Wisconsin workers filed EITC claims, averaging $2,497 per claim.
The Tax Cuts for American Workers Act would expand EITC by:
- Increasing Support: Triples the EITC benefit for workers without children from roughly $540 to $1,500.
- Including More Working Americans: Raises the income limit from $16,000 to $21,000 for single filers and $22,000 to $27,000 for married filers. The legislation would also extend the credit to both younger and older workers who are currently ineligible for the credit because of their age, including workers from 19 to 24 and 65 and older.
- Supporting Americans in Foster Care: Makes the credit more accessible for adults aging out of the foster youth system.
