What You Need To Know About The LIFT Act

Throughout her career as a California senator, Vice President-Elect Kamala Harris has proposed several measures. But one key bill might prove to be her most popular. 

In October 2018, she proposed the Livable Incomes for Families Today (LIFT) the Middle Class Act. If lawmakers were to approve it, the LIFT Act would raise numerous Americans’ monthly incomes by $500 — a critical benefit that would help buoy the shrinking middle class.

Of course, Americans must rely on Congress to approve this law. But in the meantime, The Ascent explains what you should know about the future Vice President’s proposal.

How Will The LIFT Act Change Your Household’s Finances?

When then-Senator Harris first outlined the LIFT Act two years ago, she stated, “We should put money back into the pockets of American families to address rising costs of childcare, housing, tuition, and other expenses.”

In a press release, Harris noted that the bill would help uplift American families by offering them a financial advantage. “Americans are working harder than ever but stagnant wages mean they can’t keep up with cost of living increases,” she noted. “Our tax code should reflect our values and instead of more tax breaks for the top 1% and corporations, we should be lifting up millions of American families.”

The LIFT Act would give yearly tax credits to both individuals and households. In particular, single filers who make less than $50,000 each year could qualify for up to $3,000 annually, or $250 per month. On the other hand, households earning $100 or less would be eligible for up to $6,000 each year, or $500 every month. 

The benefit would be accessible as a refundable credit. Similar to the earned income tax credit (EITC) or additional child tax credit (ACTC), if the LIFT Act cut your tax liability to $0, you would receive a refund from the federal government. 

For instance, if your household was eligible for a $6,000 tax credit, but you have a $4,000 federal tax bill, the $6,000 credit would cover the entire cost of what you owed. Instead, the IRS would send you $2,000.

According to researchers from the Institute on Taxation and Economic Policy, the LIFT Act would improve the lives of nearly half of all working Americans and two-thirds of children. While it has been two years since Harris first proposed the bill, the need for a financial lifeline is more pressing than ever. The extra money would advantage struggling Americans as they experience financial hardships as a result of the pandemic and the lack of federal relief. 

What Are The Chances Of The LIFT Act Becoming Law?

The Lift Act must overcome multiple hurdles before it can become more than a proposal. But with Harris as Vice President, she will have President-elect Joe Biden’s attention and the chance to promote progressive policies like the LIFT Act. Still, that doesn’t mean the White House will put this measure at the top of its list.

Not only that, but even if Biden does support the measure, it’s uncertain whether Congress will choose to vote on it. The House speaker and Senate majority leader can decide which bills are put on the floor. If the LIFT Act is considered for a vote, it’s probable that it will only gain traction among left-leaning legislators. Republican members may reject the $270 billion bill and claim it’s nothing more than a redistribution of wealth.

You and millions of others could greatly benefit from an additional $500 each month. However, it’s likely that this will only happen if Democrats flip the Senate during the special run-off elections in January. And there is a high probability that Republicans will keep at least one. If the GOP keeps control of the Senate, it is unlikely that lawmakers will approve the LIFT Act, let alone take it to a vote.

But that doesn’t mean all hope is lost. As the next Vice President, Harris could continue to push for this bill — and the middle-class — in the future. There is also a possibility that Democrats will take control of the Senate during the 2021 or 2022 midterms. While it’s difficult to say anything for sure, there is a chance that working families may finally get the support they need.

 

Source
  • Bieber, Christy. “One Big Change Kamala Harris Wants to Make to Increase Your Income by $500 a Month.” The Motley Fool, 24 Nov. 2020, www.fool.com/the-ascent/personal-finance/articles/one-big-change-kamala-harris-wants-to-make-to-increase-your-income-by-500-a-month/.
Ian Schindler