Restoring Progressivity, Relieving the Working-family Squeeze, and Reducing Poverty

Wes Clark's Families First Tax Reform is a major tax simplification proposal that will restore progressivity to the tax code, relieve the working-family squeeze and reduce poverty. Under Wes Clark's Families First Tax Reform, a family of four making up to $50,000 would pay no federal income taxes, and all taxpaying families with children making up to $100,000 would get a tax cut.

Wes Clark's plan will accomplish all this by consolidating and expanding on an existing confusing and uneven set of tax benefits for children, creating a new tax credit of $2,250 for each child available for families making $20,000 or $50,000 or $100,000.

• Wes Clark's Plan is Fair. Under President Bush, typical families have seen their incomes fall by nearly $1,500 - while President Bush provided an average tax cut of $128,000 to taxpayers making over $1 million. Under Wes Clark's Families First Tax Reform:
  • A married couple with two children making $50,000 would get a $1,583 tax break.
  • A married couple with three children both earning the minimum wage, or $21,000 annually, would get a tax break of $2,287.
  • A married couple with two children making $85,000 would get a $975 tax cut.
  • A single mother raising one child on $30,000 a year would get a $793 tax break.
  • 31 million working families would get tax relief, with the typical family getting a $1,477 tax cut.

• Wes Clark's Plan is Progressive. Wes Clark's proposal not only provides relief for middle-income parents struggling not to fall behind in the Bush economy, but to the working poor struggling to work their families out of poverty and into economic independence.
  • Hundreds of thousands of children will be lifted out of poverty.

• Wes Clark's Plan is Simple. Under Wes Clark's plan, families will only need to fill out a simple, three-line form to find out if they need to pay federal income taxes, providing their income, number of children, and marital status. And the majority of families will no longer be required to file tax forms.

• Wes Clark's Plan is Responsible. The plan will provide $33 billion annually in tax relief for working families. This will be paid for without increasing the deficit by:
  • A 5 percentage point increase in the tax rate only on income over $1 million per year. This surcharge, which could be used only for working family tax relief, would not apply to the first $1 million of income or to any capital gains - so it will not affect 99.9 percent of taxpayers.
  • Closing corporate loopholes, including the ones that Enron took advantage of to unfairly cut its taxes.