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Economy Gaining Jobs,
but Paychecks Aren’t Growing
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Mar-10 Feb-11 Jan-12 Dec-12 ...
Frozen Paychecks:
Disconnect Between Productivity and Typical
Worker’s Compensation, 1948-2013
2Source: EPI
Economic Gains Going to Top Incomes
3
Source: CBO
Tax Highlights From GOP Budget
• Cuts top tax rate from 39.6% -> 25%
• Gives millionaires an average tax cut
of AT LEAST $...
GOP Budget Ends Important Tax Credits
for Working Families and Students
5
-$5,800
-$4,750
-$1,900
-$1,725
-$6,000 -$4,000 ...
0.0
1.0
2.0
3.0
4.0
5.0
6.0
1962 1968 1974 1980 1986 1992 1998 2004 2010 2016 2022
6
Non-Defense Discretionary Spending as...
Building on the Foundation of
Democratic Budgets and Initiatives
• Infrastructure initiative, including Infrastructure Ban...
Spending Through the Tax Code is Very High
$808
billion $757
billion
$626
billion $576
billion
$0
$200
$400
$600
$800
$1,0...
Top 1% Claim 17% of Largest Tax Expenditures
9
Top 1%:
17%
0
10
20
30
40
50
60
1st Quintile 2nd Quintile 3rd Quintile 4th ...
Wealth Inequality
Approaching Historic Highs
10
Frozen Paychecks:
Disconnect Between Productivity and Typical
Worker’s Compensation, 1948-2013
11Source: EPI
CEO-to-Worker Compensation
Ratio, 1965-2013
20 29.9 58.7
383.4
188.5
351.3
295.9
0
100
200
300
400
500
1965 1970 1975 1980...
Making the Tax Code Work For Working
Americans, Not Just the Wealthy Few
1. CEO-Employee Paycheck Fairness Act to boost
em...
Making the Tax Code Work For Working
Americans, Not Just the Wealthy Few
4. Savers Bonus to help working Americans build
s...
Typical Working Family Under
GOP Budget and Action Plan
GOP Budget
15
tax hike under similar
Ryan-Romney tax plan*
$2,000
...
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An Action Plan to Grow the Paychecks of All, Not Just the Wealthy Few

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This is an action plan to help tackle the challenge of our time – a growing economy with more widely shared prosperity. We must sharpen our global competitive edge and ensure that Americans who work hard and play by the rules are rewarded with a fair share of a growing economic pie. What our country needs is a growing economy that works for all Americans, not just the wealthy few.

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An Action Plan to Grow the Paychecks of All, Not Just the Wealthy Few

  1. 1. Economy Gaining Jobs, but Paychecks Aren’t Growing -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Mar-10 Feb-11 Jan-12 Dec-12 Nov-13 Oct-14 Jobs Real Wages 1 Cumulative percent change in total employment and real average hourly wages since 2010 Source: BLS
  2. 2. Frozen Paychecks: Disconnect Between Productivity and Typical Worker’s Compensation, 1948-2013 2Source: EPI
  3. 3. Economic Gains Going to Top Incomes 3 Source: CBO
  4. 4. Tax Highlights From GOP Budget • Cuts top tax rate from 39.6% -> 25% • Gives millionaires an average tax cut of AT LEAST $200,000 • Analysis of similar plan shows that paying for these tax cuts requires $2,000 average tax hike on middle- class families 4
  5. 5. GOP Budget Ends Important Tax Credits for Working Families and Students 5 -$5,800 -$4,750 -$1,900 -$1,725 -$6,000 -$4,000 -$2,000 $0 Single mother with 2 children, working full-time at minimum wage Married couple with 3 kids, earning $30,000 Family of four earning $60,000 paying for health insurance Family earning $80,000 paying for a student to go to college (over four years) Source: CBPP, HBCD staff calculations
  6. 6. 0.0 1.0 2.0 3.0 4.0 5.0 6.0 1962 1968 1974 1980 1986 1992 1998 2004 2010 2016 2022 6 Non-Defense Discretionary Spending as a % of GDP GOP Budget 1.9% of GDP in 2024 Historical GOP Budget Slashes Critical Investments Source: OMB, CBO Historical low
  7. 7. Building on the Foundation of Democratic Budgets and Initiatives • Infrastructure initiative, including Infrastructure Bank • Early childhood education initiative • Robust science and technology funding • Sequester relief • Make permanent enhanced Child Tax Credit, the EITC and the AOTC • Increase EITC for childless workers • Make permanent the R&D Tax Credit, Small Business Expensing (Section 179), clean energy incentives • Increase minimum wage • Equal pay for equal work • Student loan relief • Earned paid sick leave • Comprehensive immigration reform • Modernize regulations to ensure fair payment for overtime work 7
  8. 8. Spending Through the Tax Code is Very High $808 billion $757 billion $626 billion $576 billion $0 $200 $400 $600 $800 $1,000 $1,200 Tax Expenditures Social Security Medicare & Medicaid Defense Discretionary Non-Defense Discretionary 8 Source: CBO $1,145 billion Tax expenditures and outlays for other major spending categories in 2013
  9. 9. Top 1% Claim 17% of Largest Tax Expenditures 9 Top 1%: 17% 0 10 20 30 40 50 60 1st Quintile 2nd Quintile 3rd Quintile 4th Quintile 5th Quintile % Source: CBO
  10. 10. Wealth Inequality Approaching Historic Highs 10
  11. 11. Frozen Paychecks: Disconnect Between Productivity and Typical Worker’s Compensation, 1948-2013 11Source: EPI
  12. 12. CEO-to-Worker Compensation Ratio, 1965-2013 20 29.9 58.7 383.4 188.5 351.3 295.9 0 100 200 300 400 500 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 12 Source: EPI
  13. 13. Making the Tax Code Work For Working Americans, Not Just the Wealthy Few 1. CEO-Employee Paycheck Fairness Act to boost employee paychecks by incentivizing corporations to raise pay 2. Business Tax Credit for Apprenticeship and Training Programs to invest in employees’ skills, increasing competitiveness and earning power 3. Paycheck Bonus Tax Credit of $1,000 per worker to increase the after-tax take-home pay of middle class Americans 13
  14. 14. Making the Tax Code Work For Working Americans, Not Just the Wealthy Few 4. Savers Bonus to help working Americans build savings with a $250 tax credit 5. Increase the Take-Home Pay of Two-Earner Families 6. Modernize the Child and Dependent Care Tax Credit 7. Pay for Tax Benefits for Middle Class Workers and Strengthen the Ladder into the Middle Class with curbs on excessive tax breaks for the wealthy and a “high roller” trading fee 14
  15. 15. Typical Working Family Under GOP Budget and Action Plan GOP Budget 15 tax hike under similar Ryan-Romney tax plan* $2,000 Action Plan tax cut: • $2,000 Paycheck Bonus Tax Credit • $500 Saver’s Bonus • $1,000 larger Child and Dependent Care Tax Credit • $900 Second-Earner Deduction $4,400 Two-earner couple paying for child care for one child on $80,000 income *Source: Tax Policy Center

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