Minnesota Senator Amy Klobuchar has cosponsored an $80 billion package of middle-class tax cuts that, among other things, would double the child tax credit from $1,000 to $2,000 in the first year after a child is born or adopted. The legislation would also extend the dependent care tax credit to cover 35 percent of qualified childcare expenses for families earning up to $75,000 per year. Current law allows families earning over $43,000 to take a tax credit on only 20 percent of childcare expenses.
Klobuchar, sponsor Chuck Schumer, and her fellow freshman cosponsors (Senators Sherrod Brown, Bob Casey, Claire McCaskill, John Tester, and Sheldon Whitehouse) propose that the tax breaks in the Middle Class Opportunity Act be paid for through a variety of measures, including raising the income tax for people making more than $400,000, collecting taxes from evaders, closing the tax gap, and repealing several tax breaks for the oil and gas industry.
The bill, which was introduced Feb. 15, was referred to the Senate Finance Committee (due to the fact that it addresses tax issues). As we go to press, Committee Chairman Max Baucus has vowed to move the bill through committee in order to have it quickly addressed on the floor.
