CARES ACT

After a week of Congress members and the Trump administration proposing various plans to get cash into the hands of Americans to help them weather the coronavirus crisis, the Senate appears to have landed on a plan. While details are still being negotiated, it appears likely that what changes to the cash measures will be made will change how the cash is delivered, not how much and to whom.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, or the “phase three” coronavirus bill, includes, as of now, cash measures totaling $301 billion per the conservative Tax Foundation, the only think tank that has modeled the exact proposal as of this writing.

The plan’s provisions are very simple. Adults would get $1,200 each and children $500 each. At higher incomes, the checks would get smaller: The benefit would start decreasing at a rate of $5 for every additional $100 in income. The phaseout starts at $75,000 in adjusted gross income for singles, $112,500 for heads of household, and $150,000 for married couples filing jointly; it would phase out entirely by $99,000 for singles and $198,000 for couples (with no children).

For example, a single childless person with an AGI of $85,000 would get $700 because $500 of the benefit was phased out by their higher income.

Unlike some early Senate Republican proposals, there is no minimum income (which would’ve excluded very poor people), and the check amounts don’t “phase in,” so the middle class doesn’t get more than the poor.

Here is how that policy looks in graph form:

The phase-out for top earners will be done using 2019 tax returns or 2018 returns if the taxpayer in question hasn’t filed their 2019 taxes yet. The bill says that taxpayers relying on Social Security as part of retirement or through the Social Security Disability Insurance program can have their Social Security Administration data used directly; beneficiaries of Supplemental Security Income, which often benefits old or disabled people in poverty, are not included in the current version.

Here is how that policy looks in graph form:

What the Senate coronavirus relief bill would give people, by filing status and number of children.

Categories: Uncategorized

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