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 households as signed by former President Donald Trump’s tax law, an analysis shows.
The $ 1.9 billion pandemic bill, as passed by the Senate, will increase tax revenue by about 20% for households earning $ 25,000 or less, or the bottom 20% of earners, according to estimates by the Tax Policy Center announced Monday. The typical first-year tax cut for households under the 2017 Republican plan was 0.4%.
The analysis found that the two plans will have very different effects on earnings. Average income after tax for households earning more than $ 3.4 million, or the highest 0.1%, will not increase under the coronavirus account. It increased by 2.7% under the IDP Act.
A total of low- and middle-income households will receive more than two-thirds of the tax benefits from the Biden Incentive Plan, compared to only 17% under Republican tax law.
The Senate pandemic bill is expected to pass the House on Wednesday. Biden will sign it into law by the weekend.
Major economic aid includes a $ 300 boost per week of unemployment insurance, $ 1400 direct payments to most Americans and their dependents, an extension of the child tax credit and rental assistance. The Tax Policy Center based its estimates on policies including stimulus checks and an increased child tax credit, earnings tax credit and child and dependent care credit.
Under the bill, Americans eligible for a $ 1400 payment will receive the same amount for each dependent. The child tax credit is $ 3,600 for children under 6 and $ 3,000 for children between 6 and 17 years.
As a result of these policies, low-income households with children would see an average boost of about $ 7,700 or 35% of their income after tax, according to the analysis.
Democrats said the legislation would mitigate the economic damage caused by the pandemic and prevent future pain. They also saw it as a way to reduce child poverty in the US
Republicans claim that a recovering economy does not need nearly $ 2 billion more. They said the Democrats had piled up money in policies not related to the public health crisis.
The tax policy center analysis points out that most of the benefits of the pandemic bill would be more than one year, while Republican tax changes would last eight years.
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