US President Joe Biden comments on International Women’s Day at the White House in Washington, March 8, 2021.
Tom Brenner | Reuters
President Joe Biden’s coronavirus relief plan will boost low-income families more than the tax law signed by former President Donald Trump, an analysis shows.
The Senate-approved $ 1.9 trillion pandemic aid project will increase after-tax revenue by about 20% on average for families earning $ 25,000 or less, or the poorest 20% of those earning, from according to Tax Policy Center estimates released Monday. The typical first-year tax cut for these families under the 2017 Republican plan was 0.4%.
The two plans will have very different effects on those who earn the most, the analysis concluded. The average after-tax income for families earning more than $ 3.4 million, or 0.1% higher, would not increase with the coronavirus relief bill. It increased 2.7% under the GOP law.
Altogether, low- and middle-income families would receive more than two-thirds of the tax benefits of the Biden stimulus plan, compared to just 17% under Republican tax law.
The pandemic relief bill passed by the Senate is expected to pass the House on Wednesday. Biden is expected to sign the law by the weekend.
Major economic aid provisions include an increase of $ 300 per week in unemployment insurance, $ 1,400 in direct payments for most Americans and their dependents, an expansion of the child tax credit and assistance with rent. The Tax Policy Center based its estimates on policies, including stimulus checks and an increase in child tax credit, tax credit on earned income and tax credit for children and dependents.
Under the law, Americans eligible for a payment of $ 1,400 would receive the same amount for all dependents. The child tax credit will go to $ 3,600 for children under 6 years old and $ 3,000 for children between 6 and 17 years old for one year.
Because of these policies, low-income families with children would see an average increase of about $ 7,700, or 35% of their income after tax, according to the analysis.
Democrats said the legislation would mitigate the economic damage of the pandemic and prevent future problems. They also praised it as a means of reducing child poverty in the United States.
Republicans say a recovering economy doesn’t need nearly $ 2 trillion more in stimulus. They said Democrats had invested money in policies unrelated to the public health crisis.
The Tax Policy Center’s analysis notes that most of the benefits of the pandemic aid bill will come over the course of a year, while changes in Republican taxes have been set to last eight years.
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