Statements on Introduced Bills and Joint Resolutions

Floor Speech

Mrs. MURRAY. Mr. 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. Today two-thirds of families with children rely on earnings from both parents, and 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 their families. It has also gotten a lot harder for young people just starting out to find work that puts them on a strong path. There is a very concerning pattern of young people dropping out of the labor force rather than keeping up their search.

These are the kinds of trends we need to be thinking about as we look for ways to help today's workforce succeed in today's economy. There are many steps we can and absolutely should take to tackle the barriers our workers and our families are facing. We should start with raising the minimum wage because no one working full time in the United States today should live in poverty. Low-wage workers in today's economy, who are putting in very long hours while raising their children, paying taxes, and trying to pay the bills, deserve a better shot at success.

But that is not the last step we should take. 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 such as 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 so 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 But today too many struggling workers and families are left behind under our outdated Tax Code.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 we need to update our Tax Code so that it reflects the needs of today's workforce.

I am proud to be here today to introduce the 21st Century Worker Tax Cut Act. It is a bill that would complement critical reforms, such as raising the minimum wage, by providing targeted tax cuts designed for today's workforce. It is paid for by closing wasteful loopholes that both Democrats and Republicans have proposed eliminating.

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. Making matters worse, when a second earner decides to enter the workforce, the family usually faces many new costs, such as childcare or transportation, and the family can lose eligibility for credits, such as the EITC and other benefits.

Add it all up, and many struggling two-earner families today end up taking home a smaller percentage of their paycheck than many of the wealthiest households in America. These realities often discourage a potential second earner, such as a mother who is considering reentering the workforce to return to her professional career.

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 backward for every step forward, and that is exactly the problem the 21st Century Worker Tax Cut Act will help to solve.

This bill will give our working families a 20-percent deduction on the second earner's income. A mom or dad who goes back into 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, childcare, transportation, or retirement savings.

The bill also reflects the reality that workers without dependent children and young workers who are just starting out are being left behind under the current EITC. My colleague Senator Brown has been a leader on this issue. He is a cosponsor of the bill I am introducing today.

Unlike low-income workers with kids at home, workers without dependent children receive little or nothing from this 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 $14,340, which is about what a full-time minimum wage worker would earn in a year. Young, childless workers under 25, who are starting out in a tough labor market, are not eligible at all. In an economy today where more low-wage earners are middle-aged and where young people are struggling to gain a toehold in the job market, it doesn't make any sense.

Our bill, 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. It would also lower the eligibility age for the childless worker to qualify for the EITC from 25 years old 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 that EITC changes similar to these would help more than 13 million struggling workers climb the economic ladder.

As we expand the EITC, 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 make sure that the EITC claims are filed correctly. Professional tax return preparers complete 70 percent of these EITC claims. Under our bill, the 21st Century Worker Tax Cut, they would receive twice the current penalty if they don't follow due diligence requirements put in place by the IRS.

Workers and families are playing fair, and the biggest corporations should too, and that is why this bill would be paid for by closing loopholes that the biggest corporations take advantage of. The 21st Century Worker Tax Cut would draw on a proposal from my colleague Senator Reed of Rhode Island, who is also a cosponsor of this bill. His proposal closes a loophole that lets corporations claim outsized tax breaks by paying their executives stock options instead of regular paychecks. This bill would also stop multinational corporations from shifting profits into tax havens such as Bermuda and the Cayman Islands to avoid paying their fair share.

There is bipartisan support for closing those loopholes. Both Democrats and House Ways and Means chairman Dave Camp have proposed eliminating each of them. Updating our Tax Code to give tax breaks to our struggling workers instead of big corporations is the right thing to do.

As we continue this important debate about how to expand opportunity to those who are struggling today, we need to make sure we are giving today's workforce the best shot 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 would be a strong, fiscally responsible step toward that bipartisan goal, and I am hopeful we can get this done for our workers as quickly as possible.

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