If you’re looking for a bold yet surprisingly simple tax framework that has the ability to immediately stabilize the economic lives of millions of Americans, today is your lucky day. Or if you’re merely looking for the greatest thing since sliced bread, you’ve also hit the jackpot.
Earlier today on Capitol Hill, we joined Senator Chris Van Hollen (MD), Senator Mark Kelly (AZ), Representative Don Beyer (VA-08), and a number of their congressional colleagues as they introduced the Working Americans’ Tax Cut Act (WATCA), an innovative and landmark piece of legislation that creates an affordability tax cut paid for by millionaires like us. It is the second of three pieces of legislation that comprise our legislative platform, The MONEY Agenda. It is also the second part of The MONEY Agenda to be introduced in the past year! WATCA’s introduction marks a new chapter in the fight to create the rich, stable, and free nation most Americans want and the economic system capable of sustaining it.
Our Chair, Morris Pearl, speaking at the press conference to announce the introduction of the Working Americans’ Tax Cut Act
Our Chair, Morris Pearl, delivered remarks at today’s press conference on Capitol Hill introducing the bill. You can watch a full recording of the press conference here. (Morris’ remarks begin at the 29:45 mark.) You can also share our introduction content on X, Threads, Bluesky, Facebook, Instagram, and LinkedIn.
Here’s what the Working Americans’ Tax Cut Act does:
- Provides a Cost of Living Exemption (COLE) on federal taxes up to the cost of living for a single adult with no children (approximately $46,000 per year). It will take into account married couples filing jointly and heads of household, too. Middle-income earners will still have federal income tax obligations, but will nonetheless get some relief.
- Transfers the responsibility for the lost revenue to the millionaire class by establishing a surtax on incomes over $1 million. It will apply:
- A 5% surtax on any income over $1 million for single filers and $1.5 million for joint filers.
- A 10% surtax on any income over $2 million for single filers and $3 million for joint filers.
- A 12% surtax on any income in excess of $5 million for single filers and $7.5 million for joint filers.
- Is deficit-neutral and only applies to federal income tax, not payroll or local taxes.
The Institute on Taxation and Economic Policy estimates that the bill would extend tax relief to no fewer than 130 million Americans. The Yale Budget Lab also estimates that about 615,000 millionaires across the country would be liable for the surtax.
Learn more about the bill here.
We have been promoting the concept behind WATCA for almost a year now. We first introduced The MONEY Agenda—which included our idea of a “Cost of Living” Tax Cut—at our 6th Annual Spring Symposium last spring. In the fall, our staff joined members of our Team MONEY project at fairs and festivals across North Carolina to promote the idea as part of our “Flood the Red Zone: Save America” campaign. We’ve spoken about it again and again and again in this newsletter. We even produced an ad for it, which you can watch below:
WATCA could not have come at a better time. Working people are in deep trouble across the country. Prices for just about every essential are through the roof: everything from groceries, rent, utilities, healthcare, childcare, and transportation is more expensive these days. But it’s a double whammy, as workers’ wages are not rising fast enough to keep up. No less than 37% of the country—that is, 54 million workers—makes less than the median cost of living for a single adult with no children.
When so much of the population is struggling, it’s a national crisis. It’s also one we can fix. The “affordability” tax cut will immediately stabilize working and middle class Americans, and it won’t cost the country a cent.
Donald Trump thinks that he solved America’s affordability crisis with his no tax on tips, overtime, senior citizens, and auto loan interest, but he did no such thing. These were temporary breadcrumbs compared to the permanent bread trucks he gave to the wealthy and corporations with his Big, Ugly Bill and they only helped certain subsections of the population.
That said, one of the great things about WATCA is that it helps everyone across an income bracket. In other words, you don’t have to work a particular job, be a certain age, etc. to benefit. It also doesn’t just help the very poorest like other tax benefits do, e.g. the Child Tax Credit and Earned Income Tax Credit. A wide swath of Americans make too much to qualify for these benefits—the maximum income that’s eligible for the Earned Income Tax Credit is $19,104 for a single filer with no children—but still too little to afford their basic needs. WATCA will put an end to this, and also stamp out the class resentment we’ve seen boil up over the years among working class voters towards the poorest, which arguably delivered Donald Trump the White House.
And by the way—the tax relief that millions of Americans would receive through this bill is not a “handout.” Everyone in America pays taxes. While WATCA eliminates/reduces federal income tax for millions of filers, they will still be required to pay an assortment of other taxes: tariffs, state taxes, local taxes, sales taxes, Social Security taxes, Medicare taxes, and more. If you want to know what a handout looks like, just look at companies like Amazon, Dollar Tree, and Walmart, who pay their workers so little that many of them are forced to rely on public assistance programs like SNAP and Medicaid. In effect, this means that taxpayers are subsidizing trillion- and billion-dollar companies. The people that would benefit from WATCA actually need relief. Amazon, Dollar Tree, and Walmart absolutely do not.
As rich people, we support this bill—and are more than happy to pay its accompanying graduated surtax—not just out of the goodness of our hearts but because it is in our own self-interest to do so. We live in an economy primarily driven by consumer demand. This means that, for the economy to stay afloat, working people have to have enough money to buy everything from lawn mowers to baseball gloves to Barbie dolls and more. When they have more money in their pockets, research shows they are more likely to spend it. This ends up growing the economy, which ultimately helps our bottom lines as wealthy business owners and investors. Like we said, we’re not doing this because we’re super altruistic. It just makes good business sense.
If you are a good listener during the safety instruction presentation at the beginning of flights, you’ll know that, in the event of an emergency, you are supposed to put your own oxygen mask on before you help anyone else with theirs. This is what WATCA essentially does. It helps Americans keep more money to cover their basic needs, which ultimately allows them to help others in their families and communities. If someone doesn’t need to take on extra hours at their job to make ends meet thanks to WATCA’s tax relief, they’ll have more time to take care of an ailing relative. Or more time to tutor their neighbor’s kid struggling in math. Or more time to volunteer to help clean their neighborhood’s recreation center. Or who knows—even more time to come up with new ideas for businesses, products, and services.
Creating an economy only for rich people to get richer is short-sighted. But creating a better economy for everyone means playing the long game. For any elected official who says they care about doing that, supporting WATCA should be the new litmus test to gauge whether they’re telling the truth.
We applaud Senator Van Hollen, Senator Kelly, Representative Beyer, and all of their colleagues for their hard work in introducing this historic piece of legislation. It really is a wonder—maybe even more wonderful than sliced Wonder Bread itself. We are honored to have played a part in its rollout, and will continue to do the work necessary to bring it to life.