Lift the Middle Class Act of 2018

Senator Kamala Harris (D-California) has introduced the "Lift the Middle Class Act" that would give money to the middle class. In this act married couples making less than $60,000 per year would receive $500 per month from the government. For married couples the free money phases out for those making between $60,000 and $100,000. Single people get $250 per month if they make less than $30,000 per year with the phase out at $50,000. Single parents also get $250 per month if they make less than $80,000 per year which is phased out at $100,000. Graphically this looks like this:

Diagram courtesy of the Tax Policy Center

To get an understanding of how much money is involved I pulled some statistics for 2016 from the IRS

• 150,272,157 - total number of tax returns filed
• 91,314,000 - number of tax returns with incomes under $50,000 (60.77%)
• 64,561,000 - number of tax returns with incomes under under $30,000 (42.96%)
• 57,201,828 - number of tax returns filed married (jointly and separately) (38.07%)
• 21,659,639 - number of tax returns filed head of household (single parents) (14.41%)
• 71,410,690 - number of tax returns filed single (47.52%)

Using these numbers you can make some estimates of the total number of dollars involved:

Description	Amount
Married couples making less than $50,000 per year getting $6000 per year	$208,594,034,401
Single parents making less than $50,000 per year at $3000 per year	$39,477,804,514
Single making less than $30,000 per year at $3000 per year	$92,032,343,223
Total:	$340,104,182,138

This number is low since it does not include married couples making between $50,000 and $60,000 per year, single parents making between $50,000 and $80,000 per year, or any of those in the phase out ranges. For talking purposes, I'll assume its in the range of $500 billion, or a half trillion dollars. Since the government will be sending out millions of checks every month we'll also need to increase the size of government to have people to mail these checks out adding more cost to the program.

At first glance this looks like a wonderful idea for the middle class. To pay for this Senator Harris proposes we do away with the $1.5 trillion tax cut of 2017 and levy fees on large banks. So to pay for this half trillion dollar giveaway, we as tax payers give up $1.5 trillion in tax cuts and large banks pay more fees to the government. Just looking at the tax cuts we give up $1.5 trillion to get $0.5 trillion, doesn't sound like a good idea to me. But while I don't have a trillion dollars, anyone that wants to pay me $1500 per year I will gladly give you $500. In addition, the banks aren't going to pay these fees, they will collect them from customers and send them in to the government generating more cost on the taxpayers.

One might say that most of the $1.5 million in tax cuts were from the rich and corporations. Rich people don't just hoard money to spread on the bed and roll around in, they invest it. These investments equate to additional jobs for the middle class. Has anyone ever gotten a job from a poor person? And again, corporations don't pay taxes, they collect them from customers and send them to the government.

Since the 2017 tax cuts were enacted, companies have been expanding and creating jobs in most of the country. This expansion has led us to the lowest unemployment rates in decades and a currently millions of jobs that aren't being filled. These unfilled jobs are only filled one way, by raising salaries to attract workers. It's not hard to find articles that talk about after a couple of decades of stagnation, wages are starting to rise.

There are some states that haven't seen the economic turn around. These states are typically states with high state and local taxes and huge amounts of regulations on businesses. One of these states is California that is represented by Senator Kamala Harris. High government taxes chokes the economy and we end up with growth rates less than 3%, higher unemployment and wage stagnation like we had for years under the Obama and Bush administrations. This is a bad deal for most of Americans.