American taxpayers will provide the neediest 20 percent of their countrymen a 20 percent increase in income upon the passage and signature of the “American Rescue Plan,” according to a study by the Urban Policy Tax Center.
Based on the study, the $1.9 trillion package establishes the increase by “Economic Impact Payments (recovery rebates for individuals); the earned income tax credit (EITC); the child tax credit (CTC); and the child and dependent care tax credit (CDCTC).”
Sen. Bernie Sanders (I-VT) called the legislation “the most significant piece of legislation to benefit working people in the modern history of this country.” Rep. Pramila Jayapal (D-WA) believes the bill is a “truly progressive and bold package that delivers on its promise to put money directly in people’s pockets.”
The entire coronavirus package is estimated to “lower federal taxes in 2021 by an average of $3,000, while raising net incomes by some 3.8%.” The bill will also reduce the national revenue by $590 billion over the following 10 years.
Families with children would specifically “see their taxes cut by an average of more than $6,000,” according to the report.
However, the CTC, a guaranteed income for families with children by expanding an existing tax credit, essentially establishes a new entitlement similar to other countries with more socialistic policies. The CTC is also a revenue loss for the federal government and a potential ploy to redistribute wealth.
The House of Representatives is scheduled to vote on the legislation Wednesday before President Joe Biden will presumably sign the bill into law.