WASHINGTON — Attorney General Ken Paxton on Friday proposed a set of tax deductions as the centerpiece of what he billed as the economic agenda for his U.S. Senate campaign, as affordability and everyday costs remain dominant concerns in the midterms.

Paxton, the Republican nominee, said his plan is intended to “put thousands of dollars back into the pockets of hardworking Texans,” with a focus on write-offs for housing and healthcare costs.

“Washington has made it harder than ever to get ahead, and the American Dream is slipping away as the cost of everything from housing to healthcare rises,” Paxton said in a statement that doubled as the opening message of a new digital ad he narrated. “My agenda is very simple: I believe every Texan should be able to buy a home, raise a family and live a healthy life without struggling to make ends meet.”

Affordability has routinely topped voters’ list of concerns in polling, making the fight to own the issue — including defining the culprit and proposing popular solutions — a critical battleground in Texas’ Senate race. Paxton is running in a neck-and-neck contest against Democratic state Rep. James Talarico.

The attorney general is launching a tour next week to accompany the digital ad in promoting the plan, with stops set in the Dallas-Fort Worth, Houston, McAllen and San Antonio areas.

Republicans last year passed the One Big Beautiful Bill Act, a massive tax-and-spending package, on a mostly party-line vote. The bill permanently extended the tax cuts Republicans passed during President Donald Trump’s first term while creating new temporary deductions aimed at working-class Americans — allowing individuals to deduct tips, overtime pay and car loan interest from their tax bills. 

Paxton’s plan would create new tax deductions for healthcare, housing and family-related expenses. The tax benefits could be claimed on top of existing deductions, including the standard deduction, and would fall into four pillars.

The first would be a $25,000 deduction for any out-of-pocket medical expense, including premiums, for individuals, with an additional $25,000 per dependent.

Additionally, Paxton wants to create a $5,000 tax deduction to stimulate healthy lifestyle choices. Taxpayers could deduct workout and gym expenses, spending related to nutrition plans, payments for sports activities for dependents, and the cost of GLP-1 weight-loss medications. 

On housing, the attorney general is proposing a $50,000 deduction for first-time homebuyers and a $50,000 deduction on down payments for people moving to a new primary residence.

Such a deduction has received bipartisan interest in recent years, as housing becomes one of the rare issues bringing Democrats and Republicans together in Congress.

And finally, Paxton aims to make permanent and expand two items from the One, Big Beautiful Bill Act.

The megabill created the “Trump accounts” program, a proposal from Sen. Ted Cruz, R-Texas, for children under 18. Children are eligible to receive $1,000 in federal seed money for a tax-advantaged savings account created for them. Children are eligible for up to $5,000 per year in annual contributions from family, friends or others, and employers can contribute up to $2,500 for their employees’ children. Trump account beneficiaries cannot withdraw the funds until they turn 18, at which point it functions like an individual retirement account.

Kids born between January 1, 2025, and December 31, 2028, are currently eligible for the one-time federal investment. Paxton is proposing extending the pilot permanently.

He also wants to double the size of the child tax credit, currently worth up to $2,200 per child. Republicans raised the worth of the credit by $200 in the Trump megabill, preventing a scheduled reversion to $1,000, but under Paxton’s plan, the maximum credit would rise to $4,400 — a figure closer to Senate Democrats’ plan. 

Democrats temporarily expanded the child tax credit in 2021 to be worth up to $3,600 per child under six, and up to $3,000 for children aged 6 to 17, but that change expired and reverted to $2,000.

Last year, Democrats in the upper chamber proposed raising the value of the tax credit to up to $6,360 for newborns, $4,320 for children aged 1 to 6 and $3,600 for children 6 to 17.

Both candidates — neither of whom have served in federal office before — have faulted the entrenched political system for voters’ economic struggles, and both have plans that highlight the cost of healthcare and housing. And in his new digital ad touting the economic plan, Paxton, who knocked off a longstanding incumbent in the primary, frames himself as a political outsider, blaming “Washington” as he runs under the president’s endorsement and with his party controlling both chambers in Congress. 

House Democratic Leader Hakeem Jeffries marked the start of the campaign’s homestretch this week with a diagnosis that the “American dream is fading,” echoing Paxton’s ad that says it is “slipping away.”

But the parties have different prescriptions for the problem, including in Texas’ Senate contest. While Paxton’s plan aims to increase the amount of money households can keep through tax deductions, Talarico’s is more focused on cracking down on billionaires and corporate interests.

Talarico’s economic and tax plan also includes expanding the child tax credit. But beyond that, he’s proposing to raise taxes on billionaires and corporations and close loopholes that benefit both.

Talarico also wants to hike the federal minimum wage, repeal Trump’s tariffs, create a federal public health insurance option, expand the low-income housing tax credit and go after corporate landlords who buy up housing stock and artificially raise rents, among other proposals.

Tax policy is one of a few areas where the Senate can pass bills on a partisan basis through a tool called budget reconciliation, which allows the majority to bypass the 60-vote filibuster for bills that deal exclusively with spending, revenue and debt. The ability to enact Paxton’s plan would hinge on Republicans maintaining unified control of Congress and pursuing another significant tax bill that includes his priorities, or passing the deductions on a bipartisan basis in divided government.

Affordability and cost-of-living concerns have emerged as the top issue of the midterms. A new poll from Fox News of the Texas Senate race found that 37% of voters consider inflation and high prices to be the issue they care most about, more than double immigration and border security, which came in second at 18%. Among the critical bloc of independent voters, who favored Talarico by a whopping 39-point margin, prices were even more important — 43% named it their top issue.

The Fox News poll found Talarico leading Paxton, 51% to 48%.

This article first appeared on The Texas Tribune.