Biden wants the stimulus checks to be $1,400. How can they be targeted? – Community News
Stimulus Check

Biden wants the stimulus checks to be $1,400. How can they be targeted?

Douglas Sacha | moment | Getty Images

As lawmakers in Washington work to agree a new coronavirus relief package, one key question has emerged: Will the next stimulus checks be $1,400?

President Joe Biden attempted to end that debate during a news conference Friday by reaffirming his $1,400 commitment.

“I’m not shrinking the size of the checks,” Biden said. “They’re going to cost $1,400. Period.

“That’s what the American people have been promised.”

The president also said the payments should be targeted so that “people who make $300,000 don’t get any windfall.”

The additional direct payments are part of Biden’s $1.9 trillion coronavirus relief plan.

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The $1,400 would go to individuals, as well as dependent children and adults, based on certain income thresholds. Using the same criteria as for the first two rounds of checking, individuals earning up to $75,000 and married couples earning up to $150,000 would see full payments.

The stimulus checks are very popular with the American public. A recent Quinnipiac University poll found that 78% of Americans are in favor of the $1,400 checks, compared to 68% who support Biden’s total $1.9 trillion package.

A group of 10 Republican senators unveiled their own $618 billion aid proposal this week. That package has checks for $1,000 per person, plus $500 per eligible child and dependent on an adult.

Those lawmakers also sought to lower full payment thresholds to $40,000 per person and $80,000 per couple. The payments would also phase out faster and be capped at $50,000 per person and $100,000 per couple.

Some lawmakers are concerned that Biden’s plan, as it stands, could provide incentives to people who don’t need them.

Research from the Penn Wharton Budget Model released this week found that 73% of $1,400 checks would go to savings and provide limited stimulus to the economy.

Still other research from the University of Illinois found that about 8 million jobless Americans are not receiving unemployment benefits, reinforcing the argument for sending more direct payments.

Much of Biden’s commitment stems from past promises to send $2,000 stimulus checks.

While some Congressional lawmakers also argued for that amount, they were only able to get $600 outright payments on the final deal in December. The $1,400 checks would help them reach that $2,000 grand total.

It’s probably safe to say that people who received the $600 payment will receive the $1,400 payment.

Erica York

economist at the tax authorities

“It’s pretty clear that they’re committing to a $1,400 payment,” said Erica York, an economist at the Tax Foundation. “It’s probably safe to say that people who got the $600 payment will get the $1,400 payment.”

The question is how policymakers can limit the money so that people who didn’t get the $600 checks don’t get the $1,400 either, she said.

The checks are generally phased out at a certain rate – $50 for every $1,000 above the full payment thresholds. Because the second payment was lower than the first $1,200 checks, fewer people received reduced payments.

Now, with checks for $1,400, more people may qualify unless they adjust the tapering rate, York said.

Changing that rate probably wouldn’t result in many people being banned from payments, the IRS research found.

By doubling the rate from 5% to 10%, just over 92% of taxpayers would still get a payment, York said. That’s compared to more than 94% who would receive the money if the rate stayed the same.

But such a change could better direct the money toward those people who were eligible for the $600 checks, York said.

For those eager to get a third check, the good news is that most people don’t have to do anything. That’s because the IRS already has the information from the first and second rounds in our possession, York said.