Vice President Kamala Harris has made it clear that building up the middle class will be a top priority during her time in office. The LIFT Act, also known as the Livable Incomes for Families Today, was one of her key proposals as a senator. This act aimed to provide an annual tax credit of up to $3,000 per person or $6,000 per couple for lower- and middle-income workers. While this credit would have been beneficial for many Americans, the cost of implementing it has raised concerns.
Despite the potential benefits of the LIFT Act, it would come with a hefty price tag. Estimates from the Tax Policy Center show that funding such a tax credit would be a challenge, especially in light of the growing federal budget deficit. Harris had proposed repealing provisions of the Tax Cuts and Jobs Act for taxpayers earning more than $100,000 to cover the costs. However, with various other financial obligations on the horizon, such as expiring tax cuts enacted by former President Donald Trump, the feasibility of the LIFT Act remains uncertain.
In addition to the LIFT Act, Harris has also expressed support for rent caps to aid renters in combating rising housing costs. While this may seem like a solution to making housing more affordable, economists have cautioned that rent-control policies could lead to a decrease in the supply of rental units. Reports from the Federal Reserve indicate that rent-cap policies can have unintended consequences, such as landlords withdrawing their properties from the rental market. This ultimately reduces the availability of affordable housing options for renters.
With the temporary expansion of the child tax credit during the Covid-19 pandemic, experts suggest that this could take precedence over the LIFT Act. The American Rescue Plan increased the child tax credit to $3,000, with additional funds for younger children. This expansion significantly reduced the child poverty rate in 2021. However, as pandemic relief measures expired, the child poverty rate more than doubled in 2022. Restoring the child tax credit increase has become a focal point for Democrats, with bipartisan support for its expansion. The Senate is set to vote on a bill that includes the child tax credit expansion, highlighting the importance of this policy moving forward.
As Vice President, Kamala Harris must navigate a complex economic landscape to fulfill her promises to support the middle class. The LIFT Act, rent caps, and the child tax credit expansion are all potential avenues for addressing economic disparities in the country. While each of these policies has its benefits and challenges, Harris will need to carefully consider which initiatives will have the greatest impact on American families. The road ahead will require tough decisions and strategic planning to ensure the economic stability and well-being of the middle class.