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.
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.
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.
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.
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’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.
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.
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.
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.
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.
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?
