Democrats, including the two senators, still favor raising taxes on the rich. But the new focus on having fewer people pay income taxes represents a change of tune for the Democrats.

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It is also a bid to win over voters who are frustrated with the cost of living and might be swayed from President Donald Trump and the GOP, which has long been the party to offer tax cuts during election seasons.

“I think Trump has forced Democrats to rethink what they stand for,” Alex Conant, a GOP strategist and a partner at Firehouse Strategies, told the Washington Examiner.

At the same time, Democrats are looking for new ways to extract taxes from the wealthy. For instance, Sen. Bernie Sanders (I-VT) and Rep. Ro Khanna (D-CA) introduced legislation that would impose a wealth tax on billionaires, a new form of taxation.

But Booker’s and Van Hollen’s plans would each be attempts not just to lower inequality or pay for new social spending, but also to help middle-class families through the tax code.

The plans

Both plans would massively increase the standard deduction. The standard deduction is an amount that all tax filers can use to reduce their taxable income. It’s available to those who don’t have many “itemized” deductions, such as charitable contributions, state and local taxes, or mortgage interest.

Booker’s plan would increase the standard deduction from $16,100 to $37,500 for single filers and from $32,200 to $75,000 for married couples filing jointly.

That would mean, essentially, that a married couple earning less than $75,000 would not pay federal income taxes, though they would still likely pay payroll taxes.

But Booker would go further, increasing certain tax credits. Credits are subtracted directly from the taxpayer’s tax bill. In some cases, they can even push it negative and result in the Treasury sending a check to the taxpayer. That is known as a “refundable” tax credit.

Booker would effectively increase the Earned Income Tax Credit, available to very low-income taxpayers and meant to reward work, for workers without children from about $660 to $1,500.

The plan would also increase the child tax credit to $4,320 per year for children under 6 and $3,600 per year for those up to age 16. It also provides a $2,400 “baby bonus.” The child tax credits would be fully refundable, although they would phase out as income rose above certain levels.

“No income tax on the first $75,000 families earn would be a game changer for working people,” Booker said. “This tax cut would immediately put more money in your pocket every month to deal with the high price of everyday expenses, an unexpected emergency, or to plan for the future.”

The Booker plan also raises taxes on the wealthy as a partial offset for its costs. But even after increasing the highest income tax bracket rate from 35% to 41% and the top marginal rate from 37% to 43%, the proposal would still add to deficits.

The Yale Budget Lab projects that the Booker plan would cost $5.3 trillion over a 10-year window.

“It’s expensive,” Erica York, vice president of federal tax policy at the Tax Foundation, told the Washington Examiner about Booker’s plan. “So quite a big tax cut.”

The Tax Foundation estimates that the Booker plan would cost the Treasury more than $6.7 billion over the next decade.

The Van Hollen plan, meanwhile, is structured differently. The Maryland senator’s legislation, dubbed the Working Americans’ Tax Cut Act, essentially eliminates federal income taxes through a “cost-of-living” exemption. The exemption would apply to individuals earning under $46,000 annually — the median cost of living for a single adult with no children, according to the senator — or to couples earning $92,000.

The Van Hollen legislation phases out the cost-of-living exemption as incomes increase.

Van Hollen claims that his legislation would be fully paid for through a tiered surtax structure on millionaires.

For individual tax filers, the plan would impose a 5% surtax on income above $1 million, a 10% surtax above $2 million, and a 12% surtax above $5 million. For joint filers, those thresholds would be 5% on income above $1.5 million, 10% above $3 million, and 12% above $7.5 million.

The surtax would apply not only to wage income but also to capital gains and other investment income.

“With the Van Hollen plan, you have an explicit design for the pay-for, our preliminary estimates suggest that it falls a little bit short of fully offsetting the costs,” York said.

The Tax Foundation projects Van Hollen’s plan would cost the Treasury just under $180 billion over 10 years on a dynamic basis.

“The big differences, I think, between the proposals are one, the pay-fors and two, the scale of the deduction increase,” Kyle Pomerleau, a senior fellow at the American Enterprise Institute, told the Washington Examiner.

The two tax plans would also zero out taxes for tens of millions of Americans.

Currently, 63.3 million tax filers have zero or negative tax liability after credits, according to York. Under the Booker plan, that number would increase to 94.5 million, and under the Van Hollen proposal, to 95 million.

“They have a similar effect overall, but the patterns would be different, as Van Hollen’s exemption is only available to taxpayers under certain income thresholds while Booker’s standard deduction increase does not have income limitations,” York added in an email.

Cost of living a major concern

The plans come at a time when Americans say that inflation and cost-of-living concerns are their biggest economic gripes heading into the elections.

Inflation, despite declines over the past year, is still weighing heavily on consumers, who have been grappling with the cumulative effects of years of too-high inflation that began spiking during the pandemic recovery under former President Joe Biden.

But consumer sentiment is lower than when Trump first entered office, according to surveys. Democrats are hoping to seize on that discontent, and tax cuts for middle-class voters could be one way to show they are trying to do something.

In fact, consumer sentiment readings from recent months show that consumers are feeling as bad or worse than they did even during the depths of the Great Recession — an alarm bell for Republicans.

“I think anyone being serious about affordability is probably looking at how you can lower costs to taxpayers with tax cuts, which also makes you sound a little more centrist than the very left-wing Democrats that are driving the conversation typically on taxes and affordability,” Jason Roe, a veteran Republican political consultant, told the Washington Examiner.

A political winner?

The question remains whether Democrats will embrace this shift in tax policy as a political winner.

Conant, the Republican strategist, said Democrats need a response to Trump’s ability to capture support from the working class, which has long been the political demographic Democrats have been able to win over.

He said that Trump’s success with working class voters is a “long-term threat” to the Democratic Party.

“I think, to the extent that they refocus on rather than raising taxes on rich people, how do you lower them on working class people? That may be politically appealing to some national candidates,” Conant said.

Some Democratic strategists think that running on tax cuts for the middle class could help.

“While the devil and God are in the details, more broadly, I’m glad that Democrats are exhibiting signs — albeit decades late, but better late than never — that, indeed, being known as the party of high taxes isn’t a good thing,” Jon Reinish, a Democratic strategist, texted the Washington Examiner.

“Tax cuts are popular. Do popular things,” he added.

Brad Bannon, a Democratic political strategist, told the Washington Examiner in an interview that he thinks middle-class tax-cut proposals will find a receptive audience among voters who are weary of inflation.

“I’m not a tax specialist … but I am a political strategist, and I think this is good policy and good politics,” Bannon said, noting that Americans have been uncomfortable financially in recent years.

“They’re looking for relief, and the Van Hollen proposal and others are ways of giving them the relief they so desperately want,” Bannon added.

Still, Andrew Lautz, director of tax policy for the Bipartisan Policy Center, said Democrats aren’t necessarily strangers to tax-cut proposals.

“I mean, both parties have proposed a wide variety of tax cuts over the years,” Lautz told the Washington Examiner.

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Many of those tax changes targeted specific groups with credits. For instance, Democrats temporarily supercharged the child tax credit as part of the American Rescue Plan Act. They had also tried unsuccessfully to make that enhanced credit permanent. But the current push is different in that it zeros out taxes for wide swaths of the middle class, not just for parents or low-income workers.