Cedric on the Economy

Our economy is in peril and working families across the region are feeling the pinch. Today, too many of us face the prospect of losing our home or job and struggle with the high cost of gas, home heating oil, health care, and groceries. American families are justifiably uneasy about their ability to make ends meet in a declining economy. By 2010, when the Bush tax reductions are fully in place, an astonishing 52 percent of the total tax cuts will go to the richest one percent—whose average 2010 income will be $1.5 million, their tax-cut windfall in that year alone will average $85,000 each.
Property taxes around the country are increasing at astronomical rates. Since State and municipal governments set these taxes, Democrats in Congress have had to come up with innovative ways to provide relief to their constituents under the federal tax code. Currently, the only citizens benefiting from the property tax deduction are those who itemize their taxes. Estimates suggest that approximately 40% of homeowners do not itemize. Democrats Property Tax Relief Act of 2007 would allow homeowners who do not itemize to deduct their property taxes from their federal income taxes. All of America is stronger and more prosperous when our workers have good-paying jobs, access to quality health care for themselves and their families, an affordable way to earn a college education, and the right to organize. That’s why I am committed to investing in a strong and more educated workforce that has economic security and is better prepared to meet the challenges of the 21stcentury.
One way I believe we can do this is with the Earned Income Tax Credit (EITC). The EITC reduces or eliminates the taxes that low-income, married or single working people pay (such as payroll taxes). It was originally devised in part to offset the burden of Social Security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. The size of the EITC you earn is a function of how much “earned income” you have accumulated. However, only certain things qualify as earned income under the tax code and they include: wages, salaries, tips, and net earnings from self-employment. Certain taxable income does not count and they include (but are not limited to) investment income, unemployment, and social security.
I also plan to work to strengthen retirement security without adding to the deficit. The AmeriSave Plan will increase national savings and grow our economy while helping middle-class families prepare for a brighter future. The AmeriSave Plan will expand and improve existing retirement accounts, such as 401(k)s and IRAs, so that American families can benefit from the power of compound interest while retaining Social Security’s guaranteed benefit. Under AmeriSave, nearly 100 million Americans will be eligible for the “AmeriSave Match,” which will match dollar-for-dollar the first $1,000 contributed to an IRA, 401(k), or similar retirement plan.