President Joe Biden’s proposed third round of stimulus checks could, according to new estimates, lead to more than 16 million people not receiving a check.
On Wednesday, Biden agreed to a new approach to the proposed payments of $ 1,400 by keeping the same income limits used for the first two checks. This time, however, payments over these lines will be phased out much faster.
Individuals earning up to $ 75,000 a year would receive the full payment, but would end up for anyone earning over $ 80,000 a year during compromise intended to alleviate the concerns of moderate Democratic senators.
“‘Under the Senate’s version of the bill, 158.5 million households will receive direct payments. That is 98% of the households. ‘”
Married couples earning $ 150,000 a year would get the full check, but that stops at $ 160,000. People who have earned up to $ 112,5000 when filing as head of household will also receive the full check and their payments for anyone earning over $ 120,000.
White House Press Secretary Jen Psaki said during a press briefing Thursday: “Under the Senate’s version of the bill, 158.5 million households will receive direct payments. That’s 98% of households receiving them in December.”
“In the previous round of relief, all of the 2% received checks worth less than $ 600,” Psaki added. In some cases, these checks were as small as $ 100 due to the phasing out.
The previous version of the House would have covered 91% of adults – 212.1 million Americans – and 90% of children – a further 84.7 million people, said Steve Wamhoff, director of federal tax policy at the left-wing Institute on Taxation and Economic Policy.
“It’s a difference, but it’s not a huge difference,” he said. “When you look at the people who really need help, they will get the full benefit of both proposals,” he said.
‘Asinint and unacceptable’
Others have a more critical view. The former mayor of Stockton, California, Michael Tubbs, described it as “sane and unacceptable.” He spoke at a press conference this week about research shows the benefits at $ 500 monthly guaranteed income for 125 Stockton residents.
The pandemic has been especially punishments for low-income families who did not have jobs, data show. Other research suggests that people higher up the income ladder, who received another $ 600 check, used it at lower prices than people who make less money.
“‘This is pure politics. This is about getting this bill passed. ‘”
Politicians and Washington DC-based lawmakers can only make database-based assumptions about who actually “needs” the money, said Claudia Sahm, a senior fellow at the Jain Family Institute. That’s something people can lose sight of in the debate, she added.
A family with a lower income could certainly need the money, but so could a wealthy family with a higher cost of living who have experienced a significant drop in income.
Still, Sahm is happy that the potential deal did not mess with the income level for full payment. “This is pure politics. It is about getting the bill passed. “
There could have been more targeted ways to spend money to revive the economy and struggling households, said Kyle Pomerleau, a resident fellow at the American Enterprise Institute, a right-wing think tank. “That ship has sailed. We’re already talking about checks.”
‘Tax planning estimate’
“There are a lot of different tax planning estimates that this could promote,” he added.
For example, people approaching the limit of stimulus payments may sell shares to incur capital losses and reduce their income. Or they could load pension contributions to reduce their adjusted gross income, he noted.
It is financially inefficient and unfair, Pomerleau said. “You do not want the tax law to encourage big behavior like that.”
Whatever the rules are for checks, they are a one-shot deal, Wamhoff said. “We are talking about a one-time tax payment. I do not know what completely and utterly changes people’s behavior. ”