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Old 03-26-2020, 10:25 AM
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According to the Senate, if you make $99K a year you are rich.


Putting this in politics since it is about the Senate-passed pandemic stimulus package.

Apparently the gov't has decided in it's bailout plan to cutoff the stimulus check at $99K so rich people don't benefit. I had to work multiple jobs last year when the girlfriend's unemployment benefits ran out so guess what, I'm not eligible for a check since I'm rich by working two jobs to support an entire household. And now that she has a job I quit my second job so my income this year will be below $75K. But that doesn't make a difference because I'm rich from all of the money I made in 2019.

Do you live in a high cost-of-living city like Los Angeles, San Francisco, Portland, Seattle, Denver, New York City, Boston, etc. surviving on a $100,000 annual salary (before taxes). Don't worry, you're rich so you get no bailout. No problem paying your expenses right? Of course large corporations will get plenty of money in bailouts, but not you - you're rich.

I'm really thinking of de-registering as a Republican and go independent. When the Democrats have a more financially-astute plan than the Republicans it is time to leave the GOP.
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Old 03-26-2020, 10:29 AM
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We don't usually agree, but yeah, both Democrats and Republicans trying to define "rich" based on an income number alone is perennially naive and always ends up screwing me.
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Old 03-26-2020, 11:02 AM
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It's not rich but it's top 10% of US income. And I agree that 100k is a lot different in NYC than it is in Des Moines
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Old 03-26-2020, 11:03 AM
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If I were the more conspiratorial type of person, I'd suspect this was intended to benefit rural red-staters and screw over urban blue-staters.

And the $1,200 checks are significantly less than what was proposed to begin with. Bernie and Maxine were right.
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Old 03-26-2020, 11:40 AM
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If I were the more conspiratorial type of person, I'd suspect this was intended to benefit rural red-staters and screw over urban blue-staters.

And the $1,200 checks are significantly less than what was proposed to begin with. Bernie and Maxine were right.
Is that even a conspiracy? They did the same thing when the Republican tax bill capped deductions for state and local taxes at $10,000.
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Old 03-26-2020, 11:45 AM
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Seconded. My brother lives in LA, and for a while actually lived in Hollywood (he works in the film industry as a techie). He makes about 150k/year, and his wife is a social worker who makes about 85k.

DH is a medical lab rat, and I teach little kids, with a side gig teaching religious school. Together, we make about 55k. We live in Indiana. My brother's standard of living is only slightly higher than ours, and he doesn't have a child.
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Old 03-26-2020, 11:53 AM
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Chuck and Nancy and Bernie didn't have the luxury to run the table in this bill. They did what they could. I think the idea of giving more money to areas of the country with higher cost of living would look like the blue states were getting more than the red states. And that would have caused a huge political backlash. Can you imagine the MAGAcult response to the very idea of libs getting more money than them? It would be the ultimate rallying cry for Trump's re-election. It's going to be close enough as it is without providing them additional motivation.
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Old 03-26-2020, 11:55 AM
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So if you live in an area where $99,000 isn't rich, then $1,200 isn't going to go very far or feel like very much money. So they might as well give those stimulus checks to people for whom it will feel like a lot of money and make a bigger difference.

At least, that's my Devil's Advocate justification.
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Old 03-26-2020, 12:03 PM
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I'm normally not impressed with AOC, but her proposed solution to this was brilliant, imo. Still hunting for a cite, but she advocated just sending everyone the $1200 check, then sorting it out in next year's tax filings. This would be quick, and allow for those who lost their job very recently to not appear among the "rich". It would also allow (if needed) fine tuning this for those in HCOL zip codes. Not perfect, but pretty good given the short timeline.

I realize there are drawbacks to any plan like this, but it allows time to think about correcting for those who may appear OK, but actually end up needing it due to layoffs happening a week, or a month from now.
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Old 03-26-2020, 12:06 PM
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Two things...

1) The limits are based on adjusted gross income, so you may adjustments that help.

2) If you file as head of household the limit is higher.
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Old 03-26-2020, 12:23 PM
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Old 03-26-2020, 12:29 PM
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Originally Posted by Thudlow Boink View Post
So if you live in an area where $99,000 isn't rich, then $1,200 isn't going to go very far or feel like very much money. So they might as well give those stimulus checks to people for whom it will feel like a lot of money and make a bigger difference.

At least, that's my Devil's Advocate justification.
I agree with this line of thinking. You have a pool of cash, and you're trying to maximize aggregate welfare by preventing folks from starving, dying because they can't afford their medications, keeping the power on, and such. It makes more sense to meaningfully assist two people for $500 each in a lower cost of living area than it does to meaningfully assist one person for $1000 in a higher cost of living area.

You scale the cutoffs on raw dollars instead of cost-of-living/PPP adjusted dollars because hard cutoffs are simpler to implement, so they can be implemented more quickly and with fewer errors. Even though doing so is not economically rational, it is more practical. Speed is critical, something the Senate doesn't appear to get, at least optically.

I'm actually quite surprised they didn't just flat out send social security checks to every individual social security number on file, and then call it a tax refund advance against a future tax year. I haven't been following the politics of this particular issue closely, but when I saw some headline scroll by about Mnuchin wanting to send $1000 checks to everyone, I assumed that was what he meant.
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Old 03-26-2020, 12:48 PM
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1) The limits are based on adjusted gross income, so you may adjustments that help.
Indeed. I was thinking my overall income was close enough to the limit that I would get little if anything from the relief bill. But I went back and looked at my AGI from last year, and it's actually lower than I thought, thanks to adjustments for 401K contributions and health insurance premiums. So I should be getting something. Not the full $1200, but something.

That said, I live in a part of California with a lower cost of living than the coastal regions, but still high compared to most of the rest of the country. I have a stable salary and can do most of my job from home, so I'm not losing any income due to the COVID-19 situation. I really don't need a check from the government. I'm considering making a charitable donation with what I get.
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Old 03-26-2020, 12:52 PM
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According to the Senate, if you make $99K a year you are rich.
According to Republican House members in 2017, Americans earning $450,000 a year are "low- and middle-income".
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Old 03-26-2020, 12:56 PM
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The problem, as I see it, is that your need for this money is based upon what you made, and filed taxes on, either last year or the year before, when you didn’t need it.

It doesn’t consider your current situation. I guess that your previous income is all that the government has to go on, but it is not an indication of whether you need this money right NOW. Fortunately we don’t need it, but some people who do will need it and not get much due to previous earnings.

Last edited by Dallas Jones; 03-26-2020 at 12:58 PM.
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Old 03-26-2020, 01:14 PM
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Another thing is that cutting it down from 100% to 0% within $25K seems pretty steep. If it were maybe pro-rated from $75K to $150K that would make a lot more sense.
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Old 03-26-2020, 01:26 PM
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Indeed. I was thinking my overall income was close enough to the limit that I would get little if anything from the relief bill. But I went back and looked at my AGI from last year, and it's actually lower than I thought, thanks to adjustments for 401K contributions and health insurance premiums. So I should be getting something. Not the full $1200, but something.

That said, I live in a part of California with a lower cost of living than the coastal regions, but still high compared to most of the rest of the country. I have a stable salary and can do most of my job from home, so I'm not losing any income due to the COVID-19 situation. I really don't need a check from the government. I'm considering making a charitable donation with what I get.

Same here. I have already filed my 2019 return and my income last year was much lower than the previous year, as I was winding down my business in preparation for retirement. So if they use my 2019 return I’ll qualify for the full amount.

I was thinking I’d be out of luck if they used my 2018 return, but I went back and checked my adjusted AGI and it looks like I’d still get about $1000.

We have another question in my family. My nephew’s wife is HUGELY pregnant - she’s diabetic and apparently there is some correlation between diabetes and VERY large babies. So they are going to induce her early next week, 10 days before the due date.

And we are wondering if they will be eligible for the child credit. Does the fine print say anything about newborns and birth dates?
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Old 03-26-2020, 01:52 PM
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Old 03-26-2020, 02:07 PM
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Old 03-26-2020, 02:53 PM
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Two things...

1) The limits are based on adjusted gross income, so you may adjustments that help.
My AGI is actually higher than my gross salary earnings, so that's no help. I realize I'm probably the anomaly here.


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They did the same thing when the Republican tax bill capped deductions for state and local taxes at $10,000.
THIS is what's really screwed me over the last 2 years. It's cost me many thousands of dollars.
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Old 03-26-2020, 04:04 PM
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a while back a local GOP congressman said $200k was middle class and partly because of that he only lasted 1 term.
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Old 03-26-2020, 04:47 PM
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I dunno - I make over $100k and thought it was going to be pretty stupid if I were sent a check. So I'm glad there is SOME cut-off. IMO, it would have been better if it were tied to unemployment or something.

Of course - as usual - there is no cut-off for welfare if you are a corporation!
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Old 03-26-2020, 06:02 PM
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I'm normally not impressed with AOC, but her proposed solution to this was brilliant, imo.
It's good that she's advocating this, but it's not her invention. Basic income advocates have been saying this for years (decades, really).

We pay a huge cost in having means testing for every separate social program. Not just administrative, but because the testing is so often badly designed, arbitrary cutoffs and thresholds create perverse incentives (i.e., you don't want to make more money because then you'll be cut off from the program).

You still want some method of means testing, but you only need one. And we've already got it: Federal taxes. They're already designed to avoid the worst of the perverse incentives, even if lots of people don't understand it (no, you won't make less money by being pushed into a higher bracket).

So yes, just send everyone a check and sort out the tax brackets to compensate. You avoid a great administrative cost, no one is annoyed that their neighbor got a check but they didn't, no one is incentivized to avoid work, and the costs are spread out over a year so they're barely noticeable anyway.

The problem with this approach is that most Democrats don't like it because evil billionaires are getting checks, and Republicans don't like it because well-paid liberal coastal elites are getting checks.
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Old 03-26-2020, 07:37 PM
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I'm actually quite surprised they didn't just flat out send social security checks to every individual social security number on file, and then call it a tax refund advance against a future tax year.
Actually the mechanism they are using is to on-paper create a credit for tax year 2020 of 1,200 for everyone in the indicated adjusted income group regardless of tax liability, and then issue everyone an advance on that.

Yes, I had to actually read that part , for, reasons.

Last edited by JRDelirious; 03-26-2020 at 07:40 PM.
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Old 03-27-2020, 03:23 AM
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Actually the mechanism they are using is to on-paper create a credit for tax year 2020 of 1,200 for everyone in the indicated adjusted income group regardless of tax liability, and then issue everyone an advance on that.

Yes, I had to actually read that part , for, reasons.
So let's say I make less than $75K in 2020, then will I get the $1200 credit next year?
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Old 03-27-2020, 03:57 AM
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Just answered my own question by looking up the text of the bill. In section 2201 it says this is a credit for tax year 2020 and it looks like that amount would be adjusted by the advance.

But can someone please translate this section for me?

Quote:
IN GENERAL.—Subject to paragraph (5), each individual who was an eligible individual for such individual’s first taxable year beginning in 2019 shall be treated as having made a payment against the tax imposed by chapter 1 for such taxable year in an amount equal to the advance refund
My best translation is that if you owe the IRS money for your filed 2019 tax return but haven't actually paid it yet, your advance goes to pay it off. Is that even remotely close?


FYI: paragraph (5) refers to substituting '2018' for '2019' if a person has not filed their 2019 tax return.
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Old 03-27-2020, 09:17 PM
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Just answered my own question by looking up the text of the bill. In section 2201 it says this is a credit for tax year 2020 and it looks like that amount would be adjusted by the advance.

But can someone please translate this section for me?
I think it just means that the credit can't be counted as 2020 income, since it is now technically treated as a refund of an overpayment of your 2019 taxes. ("Chapter 1" refers to "Normal taxes and subtaxes" in the Internal Revenue Code (Chapter 26, United States Code).)
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Old 03-28-2020, 02:42 PM
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What is the 2018 income threshhold before they phase out corporate stimulus?
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Old 03-28-2020, 05:42 PM
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Seconded. My brother lives in LA, and for a while actually lived in Hollywood (he works in the film industry as a techie). He makes about 150k/year, and his wife is a social worker who makes about 85k.

DH is a medical lab rat, and I teach little kids, with a side gig teaching religious school. Together, we make about 55k. We live in Indiana. My brother's standard of living is only slightly higher than ours, and he doesn't have a child.
This is laughable. I live in West LA and there is no way that a 235K income and its lifestyle isnt way higher than yours. He is just wasting his money on luxury items like restaurants, great neighborhoods or high end gyms. Many people in LA live on less than 55K.
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Old 03-28-2020, 05:47 PM
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What is the 2018 income threshhold before they phase out corporate stimulus?
This kind of class warfare has no place in America!! We need to get back to the issues that really matter, like welfare queens buying steak with food stamps!

https://www.google.com/amp/s/www.was...outputType=amp
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Old 03-28-2020, 05:52 PM
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My wife and I live in Los Angeles, and we make collectively about $45K/yr now. I guess I now understand why a lot of Democrats on this board don't support Bernie.
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Old 03-28-2020, 08:52 PM
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Is there any reasoning other than political pandering behind giving cash to people who haven't experienced a financial hit because of this COVID19? For example, a singled working person earning $60k? Or a retired couple on a fixed income of $70k?
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Old 03-28-2020, 09:25 PM
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Is there any reasoning other than political pandering behind giving cash to people who haven't experienced a financial hit because of this COVID19? For example, a singled working person earning $60k? Or a retired couple on a fixed income of $70k?
It's simple and quick. The more means testing you do, the longer it takes and the more people fall through the cracks. Millions of people never get the EITC they're owed because the process to get it is so complicated (starting with our ridiculous tax return system).

If some income bracket gets "too much" aid, it's easier (logistically, I mean, not politically) to just tax it back at some later point.

Last edited by Lord Feldon; 03-28-2020 at 09:29 PM.
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Old 03-29-2020, 01:30 PM
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Right. The reason I had to read it was because in the course of my duties for days I've been fielding messages from people saying, "look, but for [ME/MY BUSINESS], who are [insert complex business or personal circumstances here], do I get the [whatever of the different benefits], how and when?" Which involves having to make them acknowledge that I'm not their or even A tax lawyer or accountant, and that they really, really need to ask theirs to read the regulation when it comes out.


So for something like the personal incentive the flat "here's 1200, and it's up to a hard cutoff based on income either from your tax return or your Social Security record", makes it simpler than to try and fine-comb every possible income circumstance. (The one thing they HAVE announced is that if you're in arrears for Child Support, and the state has reported you to the IRS for it, that they will dock you for)

Even then hard cutoffs can cause issues of people left in limbo -- for instance the $500 dependent child payment is based on the definition of "child" for the CTC, so it's only for those under 17. So I get the messages... "but wait, I still claim my 19 y/o college student as a dependent and she does not get to file her own return!" Well, that's for sure a problem, ma'am.


Quote:
Originally Posted by That Don Guy View Post
I think it just means that the credit can't be counted as 2020 income, since it is now technically treated as a refund of an overpayment of your 2019 taxes. ("Chapter 1" refers to "Normal taxes and subtaxes" in the Internal Revenue Code (Chapter 26, United States Code).)
That is the intent of it. It is to be treated as a 2020 credit for a refund from the return you would have filed this April -- Tax Year 2019 for most of us -- and not be taxed again.



That they can't legally call it "here is a free cash gift for every citizen or permanent legal resident with a Social Security Number" (basically because there is no Free Gifts To Give Away account in the Treasury, but there ARE tax credit and refund and benefit advance accounts) leads to the convoluted taxlawyerese.

Last edited by JRDelirious; 03-29-2020 at 01:35 PM.
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Old 03-30-2020, 06:03 PM
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Treating it as an advance payment is the same way that the Earned Income Credit or Additional Child Tax credit are able to refund you money when you owe no taxes. That's why they are located in the "Payments" section of the return (or at least the pre-2018 return - even if I do taxes all day, I still don't have a great grasp of what a 2018 or 2019 1040 really looks like because they changed it so much and it doesn't really matter). This is simply the nomenclature used for refundable credits in the tax law.

And yes, that allows them to give it away without it being taxable income, since the government simply decides that you legally gave them money that you actually didn't, and they are simply returning it.

Last edited by glowacks; 03-30-2020 at 06:04 PM.
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