U.S. President Joe Biden makes statements on International Women’s Day at the White House in Washington on March 8, 2021.
Tom Brenner | Reuters
According to an analysis, President Joe Biden’s coronavirus relief plan will boost low-income households more than the tax law signed by former President Donald Trump.
The $ 1.9 trillion pandemic aid bill passed by the Senate will increase after-tax income by an average of about 20% for households earning $ 25,000 or less, or 20% less than employees, according to estimates from the Center for Tax Policies released 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 the more winners. Average after-tax income for households earning more than $ 3.4 million, or 0.1% higher, would not increase according to the coronavirus relief bill. It rose 2.7% under Republican Party law.
All in all, low- and middle-income households would receive more than two-thirds of the tax benefits from the Biden Stimulus Plan, against only 17% of Republican tax legislation.
The pandemic relief bill passed by the Senate is expected to reach the House on Wednesday. Biden is scheduled to sign it into law over the weekend.
Key financial aid provisions include an increase in unemployment insurance of $ 300 a week, $ 1,400 direct to most Americans and their dependents, an extension of the child tax credit, and rent assistance. The Tax Policy Center based its estimates on policies such as stimulus controls and an increase in the tax credit for children, a credit for earned income, and a tax credit for the care of children and dependents.
Under the bill, Americans eligible for a $ 1,400 payment would get the same amount for each dependent. The child tax credit will be $ 3,600 for children under 6 and $ 3,000 for children ages 6-17 for one year.
Thanks to these policies, households with low-income children would see an average boost of about $ 7,700, or 35% of their after-tax income, according to the analysis.
Democrats have said the legislation will mitigate the economic damage from the pandemic and prevent future pain. They have also promoted it as a means to reduce child poverty in the US
Republicans argue that a recovering economy doesn’t need nearly $ 2 trillion more in stimulus. They have said Democrats have stacked money on policies unrelated to the public health crisis.
The Fiscal Policy Center’s analysis notes that most of the benefits of the pandemic aid bill will come in a year, while Republican fiscal changes were expected to last eight years.
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