A Democratic senator viewed as a potential 2028 presidential candidate will unveil a plan that he says would ensure roughly half of all U.S. workers pay no federal income taxes, according to details shared with The Washington Post.
Sen. Chris Van Hollen of Maryland is expected to release the measure next week as Democratic Party lawmakers search for a sharp economic message to counter last year’s Republican tax law.
Under Van Hollen’s proposal, workers making at or below a “living wage” — $46,000 for taxpayers filing individually, or $92,000 for married couples filing jointly — would not have to pay federal income taxes. Tens of millions of additional middle-class workers would also receive a tax cut under the proposal, but they would still have to pay taxes. The measure would be paid for by a new surcharge on millionaires that would raise roughly $1.5 trillion over the next 10 years.
Fifteen Senate Democrats are co-sponsoring Van Hollen’s proposal, though it has no chance of passing in a Republican-controlled Congress. The number of tax filers with no federal income tax would increase from 37 million under current law to 66 million under Van Hollen’s proposal, according to Steve Wamhoff, director of federal tax policy at the Institute on Taxation and Economic Policy, a left-leaning think tank.
“This bill, in addition to being the right policy, sends a very strong message that we stand for working people who are sweating every day to make ends meet. That’s a group of Americans that Donald Trump somehow appealed to,” the senator said in an interview.
Though the 2028 presidential primaries have not yet begun, Van Hollen’s proposal reflects the early jockeying around the ideas the party should run on. The 2020 Democratic presidential primary, the party’s last open nominating contest, featured a rush to the left as candidates raced to embrace far-reaching ideas including Medicare-for-all, the Green New Deal and aggressive taxes on billionaires.
This week, Sen. Bernie Sanders (I-Vermont) and Rep. Ro Khanna (D-California) introduced legislation to enact a $4.4 trillion wealth tax on the United States’ approximately 1,000 billionaires to fund a Medicare expansion, universal child care and other social initiatives. Sanders’s plan calls for major growth in federal programs that would make the U.S. government more akin to the Scandinavian countries of Norway and Sweden.
Van Hollen said he supports Sanders’s wealth tax proposal and views his plan as a complementary measure that addresses a different problem. While he believes that Democrats should tax billionaire wealth and reverse the GOP’s Medicaid cuts, Van Hollen emphasized that the party also needs a response to Trump’s “no tax on tips” and “no tax on overtime” policies, which have proved popular with workers.
“This is not intended to be the overall comprehensive plan for Democrats. It’s supposed to be an important plank in the platform,” Van Hollen said. “These are not at all mutually exclusive. They’re reinforcing.”
In practice, though, Democrats would have to pick between competing policy priorities should they take control of Congress and the White House in 2028. The last time they controlled both, the party’s sprawling wish list and razor-thin congressional margins contributed to a dysfunctional months-long negotiation that culminated in the defeat of President Joe Biden’s “Build Back Better” agenda. Neither Sanders nor Van Hollen calls for using new revenue from their taxes to reduce the federal deficit, which is close to $2 trillion annually, and then there’s a long and expensive to-do list that ranges from universal child care to free public colleges and universities.
Still, Van Hollen emphasized that voters want policies that go beyond new government social programs. He cited research suggesting that Trump’s line on “no tax on tips” was the best-testing message of his State of the Union address. At the barbershop he has frequented for the past two decades — a Hair Cuttery in Kensington, Maryland — his barber pulled out her phone to show him how much she was benefiting from Trump’s tips policy, Van Hollen said.
“This is an even better proposal that provides more and permanent tax relief,” Van Hollen said of his plan, adding that it applies to everyone in the same income bracket, rather than just those paid in tips.
Overall, Van Hollen’s plan would reduce taxes for nearly 130 million people, according to an analysis by the Institute on Taxation and Economic Policy, a left-leaning think tank. The average single person making $50,000 would see a reduction of about $2,800. The average family of four earning $95,000 would save roughly $6,000. The definition of the “living wage” below which nobody would pay taxes is defined by a Massachusetts Institute of Technology index and would rise with inflation under Van Hollen’s proposal.
Van Hollen’s millionaire surtax would levy new rates above existing taxes on the rich. It would charge an additional 5 percent on income above $1 million, 10 percent above $2 million, and 12 percent above $5 million. The Yale Budget Lab has estimated the surtax would affect about 615,000 filers. Van Hollen’s plan would not raise as much as Sanders’s, but Van Hollen’s is less likely to face constitutional challenges, as experts have long debated the legality of a national wealth tax.
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