Lower Your Taxes Act

Lower Your Taxes Act

This bill increases the earned income tax credit (EITC), replaces the child tax credit with an allowance, establishes a new dependent tax credit, limits the capital gains tax rates, and increases taxes on corporations.

The bill

• increases the EITC amount,
• lowers the EITC eligibility age to 18 years (from 25 years) and eliminates the maximum age limit,
• increases the EITC phaseout amount for joint filers to twice that of single filers, and 
• requires the Internal Revenue Service (IRS) to notify individuals of their EITC eligibility.

The bill requires the IRS to create a program for paying individuals certain amounts related to the nonrefundable portion of state EITC amounts.

The bill replaces the child tax credit with a monthly allowance of up to $350 per child depending on the child’s age (subject to income limitations and adjustments for inflation) and requires the IRS to send the allowance to individuals monthly.

The bill establishes a tax credit of $500 for each qualified dependent (subject to income limitations).

Further, the bill

• increases the corporate income tax rate to 28% (from 21%),
• increases the excise tax on corporate stock buybacks to 4% (from 1%), and
• creates a new 25% corporate alternative minimum tax bracket applicable to adjusted financial statement income exceeding $5 billion.

Finally, the bill precludes individuals with taxable income exceeding $1 million ($500,000 for married individuals filing separately) from applying the capital gains tax rates to net capital gains and requires the limits to be adjusted for inflation.