Castro releases plan to raise taxes on the rich, provide relief to working and middle class

Castro releases plan to raise taxes on the rich, provide relief to working and middle class
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Democratic presidential candidate Julián Castro on Thursday released an economic plan that includes higher taxes on the wealthy and tax relief for working and middle-class people.

The rollout of Castro's economic plan comes as the former Housing and Urban Development secretary is trying to qualify for September’s third round of Democratic presidential debates in Houston. Castro needs to reach 2 percent in one more poll in order to qualify.

Castro said on a call with reporters from the early voting state of Iowa that he’s confident he’ll make the debate stage next month, saying he’s been spending time in early nominating states and focused on releasing “bold” proposals.

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“We know today that in our country there are a lot of families that are working hard, but are not getting ahead the way that they would like to, or the way that they ought to be, or the way that they used to be in years past,” Castro said.

Castro's economic plan centers on new tax proposals. 

Some of these proposals focus on increasing taxes on the rich. For example, Castro would create an “inherited wealth” tax that would replace the current estate and gift taxes. Under the tax, the first $2 million would be exempt, and inherited amounts over that would be subject to income and payroll taxes.

Additionally, Castro would tax capital gains and ordinary income at about the same rates for those making $400,000 or more. For those in the top 0.1 percent of asset holders — those with assets of about $40 million or more — their investment gains would be taxed annually, as opposed to when the investments are sold. And he would end the “step-up in basis” tax break that benefits those who inherit investments.

Castro also plans to generally repeal President TrumpDonald John TrumpPence: It's not a "foregone conclusion" that lawmakers impeach Trump FBI identifies Pensacola shooter as Saudi Royal Saudi Air Force second lieutenant Trump calls Warren 'Pocahontas,' knocks wealth tax MORE’s 2017 tax-cut law.

In addition to raising taxes on the rich, Castro is also proposing to provide tax relief for working families through a “working families first” credit that would replace and expand upon the existing earned income tax credit and child tax credit.

Castro would expand upon the child tax credit by increasing it from $2,000 to $3,000, making it fully refundable, and allow people to receive it in monthly installments. He would expand upon the earned income tax credit by allowing more people to be eligible for it, allowing people to receive credit amounts on a monthly basis and having the IRS offer free filing services for those qualifying for the credit.

Castro’s economic plan also includes other components. These include a $15 minimum wage, paid family and medical leave, a universal child care program that would prevent families from paying more than 7 percent of their income in child care, universal pre-K and efforts to make housing more affordable.

Many of Castro’s proposals have similarities to plans offered by other Democratic presidential candidates. Several of the candidates have called for expanding tax credits for low- and middle-income families, and several have proposed taxing capital gains and ordinary income at the same rates.

- updated at 4:23 p.m.