President Biden’s proposed direct payments to individuals would go to about 95 percent of tax filers, while the smaller, more targeted payments suggested by Senate Republicans would go to only about three-quarters of tax filers, according to an analysis released Tuesday by the right-leaning Tax Foundation.
The analysis comes amid a debate among lawmakers and economists about the size and scope of a third round of direct payments as part of another COVID-19 relief economic legislative package.
Biden released a $1.9 trillion coronavirus relief proposal last month that calls for a new round of direct payments of up to $1,400 per person. He did not specify the income eligibility requirements and has said he was open to discussing various salary thresholds for those who would qualify.
Under the two rounds of checks that have already been distributed, individuals with incomes of up to $75,000 and married couples of up to $150,000 were eligible for the full payment amounts. The amounts were gradually reduced above those thresholds.
Many Republicans, as well as some centrist Democrats, have argued that a new round payments should be targeted to households with lower incomes.
A group of 10 Senate Republicans on Monday released a $618 billion coronavirus relief proposal that includes direct payments of up to $1,000 per adult and $500 per dependent. Under the senators’ proposal, individuals with income up to $40,000 and married couples with income up to $80,000 would be eligible for the full payment amounts, and the phaseout rate would be faster than it was for the first two rounds.
Individuals with income above $50,000 and married couples with income above $100,000 would not be eligible for payments.
The Tax Foundation estimated that if Biden’s proposed check amounts used the same phaseout thresholds and rate as the first two rounds of payments, that about 95 percent of tax filers would be eligible for a payment, costing $441 billion. The group estimated that the average payment amount for households would be $2,273.
The Senate Republicans’ proposal would make 74 percent of tax filers eligible for another payment, costing $184 billion. The average household payment amount would be $982 under that scenario, the Tax Foundation estimated.
The Tax Foundation’s findings are similar to an estimate from the left-leaning Institute on Taxation and Economic Policy that found that about 95 percent of adults and children are in households that would receive payments under Biden’s plan.
A preliminary estimate from the group found that about 70 percent of adults and children are in households that would receive payments under the GOP plan.
The Tax Foundation also analyzed options in which the payments were $1,400 per person but the phaseout thresholds were lower than they were for the first two rounds of payments. The group estimated that if $1,400 payments had a $60,000 phaseout threshold for individuals and a $120,000 threshold for married couples, about 93 percent of taxpayers would be eligible for a payment. If $1,400 payments had phaseout thresholds of $40,000 for individuals and $80,000 for married couples, 87 percent of tax filers would be eligible.
The authors of the Tax Foundation’s report sided with the notion of a new round of direct payments going to lower-income households.
“Lawmakers have enacted more than $3 trillion of support over the past year, successfully delivering relief to households and businesses in the early months of the pandemic,” Tax Foundation economists wrote in their report. “Providing further targeted relief to the households still struggling will help them bridge the gap until widespread vaccine distribution and an economic recovery can take hold.”