Our good swamp friends in D.C. rammed through another $1.9 trillion (with a “T”) of spending in there latest legislative monstrosity–American Rescue Plan Act (sounds so nice doesn’t it?). Let’s ignore the pork barrel spending and all of the money going to various cronies and sycophants and focus on the tax aspects of the bill.
Universal Basic Income; or Socialism Lite; or Stimulus Check III
Each American who has an AGI of under $75,000 (on their most recent tax return on file with the IRS) will receive $1,400 from daddy government. Married couples will receive $2,800 if their AGI is under $150,000. Parents will receive $1,400 for each of their dependents, if they fall within the AGI limits above.
Though this “free” money is certainly a form a socialism, you can instead think of it as the government returning some of your stolen money (i.e. taxes). Why don’t you spend it on something that will undermine our rulers in D.C.? Some ideas are buying silver and gold coins or stocks, converting it into crypto, buying some badthink books, etc.
Unemployment Benefits
If your AGI is under $150,000, then $10,200 of unemployment you received in 2020 will be exempt from tax. If you are married and your spouse also received at least $10,200, then they will be able to exempt the first $10,200 as well.
Child Tax Credit
There are a few changes:
- Children who are age 17 on December 31st of the tax year now qualify
- The credit was increased from $2,000 to $3,000 per qualified child
- The 2021 credit is 100% refundable (i.e. if you have a $0 tax liability, you will receive a $3,000 “refund”)
- The 2021 credit will be paid out to you in monthly installments during the year, unless you opt out. These payments will run from July to December.
Child and Dependent Care Credit
The allowable credit increases to $4,000 for one child and $8,000 for two or more children for 2021 only.
Family and Sick Leave Credit
These credits against payroll taxes (employers and self-employed) were formally codified. The limit for paid family leave was increased to $12,000.
Takeaways
While the mass of Americans are joyous over receiving yet another “stimulus check”, one must start wondering how many more trillions the government can print before people start to lose confidence in the dollar. Or maybe the MMT-ers are right. Time will tell.
Additionally, one must wonder why the cost of the bill was so high. If you take $1,400 for each American, you get less than $350 billion. If I were a logical socialist (a contradiction in terms), I’d be asking why each person didn’t receive the equivalent of $1.9T divided by each American. But then again, I failed to mention all of the pork barrel spending in the bill. Many cities and states were sent free money to soften the blow of their idiotic decision making over the past year.
This free money begs the question: why don’t we stop working, just print money, and send ourselves more bailouts and stimulus checks ad infinitum? It seems like a recipe for success in the eyes of many.
Or a recipe for disaster.
References
- https://www.journalofaccountancy.com/news/2021/mar/tax-components-coronavirus-relief-bill.html
