Incentive checks were made available by the federal government in both 2020 and 2021 with the aim of helping people cope with the financial impact of COVID-19.
Most people know that these checks were mailed or deposited into the bank accounts of people under both the Trump and Biden administrations, and that there were income limits on eligibility for the payments.
But despite the fact that the stimulus money was intended to cover the financial damage that ordinary people suffered from lockdowns, new data from ProPublica shows that a surprising number of billionaires have also received money from federal aid.
In fact, ProPublica found that a total of 270 taxpayers who disclosed $5.7 billion in combined income on previous tax returns were eligible for incentive payments. Here’s how this happened.
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Some of the wealthiest Americans have benefited from COVID-19 stimulus checks for this reason
According to ProPublica, a total of 18 billionaires and 270 other very wealthy people received thousands of dollars from the CARES Act, the first bill for COVID-19 aid. This included hedge fund managers and corporate raiders who have billions of dollars in collective assets to their credit.
The CARES Act offered payments worth $1,200 per person; $2,400 per married couple; and $500 per eligible person. Many high net worth individuals received these payments because the IRS automatically broadcast them to single taxpayers with reported income of $75,000 or less on their tax returns and to married taxpayers with combined incomes of $150,000 or less.
Although they were eligible for the payments above these income levels, the 270 wealthy taxpayers identified by ProPublica were still able to receive full or partial payments because they could use tax write-offs to wipe out much of the income they had earned. . Through their write-offs and deductions, they reported income that was below the eligibility threshold, despite huge revenues.
ProPublica found that even though the 270 ultra-wealthy taxpayers had billions in corporate income, the tax savings they qualified for ultimately allowed them to report low or even negative incomes on their tax returns. Thus, they fell well below the level where they would not qualify for payments under the CARES Act. This was likely also an issue with the other two stimulus controls, although that was not specifically included in the ProPublica analysis.
How could this happen? The ultra-wealthy taxpayers have more flexibility in doing taxes than most people because they get little of their income from wages and often have business interests that allow them to declare more deductions and losses than most ordinary people. Of the 270 wealthy people who got incentive checks, only $82 million — or 1.4% of their total income — came from wages.
Some of the taxpayers who received these government payments indicated to ProPublica that they had returned the checks that were sent to them. Most also said that they had not asked for the money and had deposited without their consent. The mere fact that they have received the payments demonstrates one of the shortcomings in the automatic distribution of aid that the COVID-19 stimulus legislation allowed.
Unfortunately, while billionaires have been given incentive payments, many ordinary Americans continue to struggle with the lingering effects of the pandemic. And as it stands, the government is unlikely to approve a fourth payment, despite a petition signed by millions demanding one.