New STIMULUS BILL – Monthly Economic Crisis Support Act – The Credit Shifu

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Hey Credit Warriors, there is a new stimulus bill in town, as if $2000 on a debit card, then $1000 a month for every person in the country, funded by trillion dollar coins created out of thin air, wasn’t enticing enough for you. Today Democratic Senators Bernie Sanders, Kamala Harris and Ed Markey have released a draft of their so called Monthly Economic Crisis Support Act. Now this bill could greatly benefit you if it passes, it has a little more sanity to it than the other bill I just mentioned, but still some areas that are kind of crazy, you will see what I mean as we move through the draft version.

This bill proposes to give quote “monthly rebates to individuals during the Coronavirus pandemic.” And it explains that individuals will be treated as if they paid the tax against the rebate, so basically it is a stimulus payment, free money! Ok I know people keep pulling me up for saying free money, you’ll pay for it later in your taxes, or since the government is borrowing to do this, your kids will end up paying.

Anyway, these stimulus payments would be $2000 per month per individual, and that doubles for joint tax filers, so $4000 per month for a married couple. Then it would also give $2000 per month for each dependent, up to a maximum of 3. So the maximum you would get out of this is $10,000 per month for a family with three kids! My family would get $8000 per month!

There are some pretty generous income limits for this too. For individuals you can earn up to $100,000 per year and still get the full amount, head of the household filers $150,000 and married filing jointly $200,000 per year. Then the money you get will decrease by 10% of the amount that you are over the limit by, so if you are an individual and you earn $120,000 per year, you would get $2000 less per year or $166 less per month, so you would have to be $240,000 over the limit which would be an income of $340,000 per year, to cancel out the whole payment.

Let’s just look at the cancel out income level for our maximum stimulus payment guy who is getting of $10,000 per month, which is $120,000 per year, you would have to earn $1.2 million per year, above the $200,000 limit, so $1.4 million per year, before it fully cancelled out. And a family with 3 kids earning $800,000 per year, would still be receiving $5000 per month from this scheme. They clearly haven’t thought these phase out limits through.

I can understand this for people earning under $100k a year, but for families earning close to 1 million per year? We still want to give them thousands of dollars per month under this plan. I have no words. Let’s move on.

So who is eligible for this, well it seems that there is a little more sanity here compared to the trillion dollar coins and stimulus debit cards bill. It tells you who is not eligible which includes non-resident aliens (so Sergey from Russia who was here on a tourist visa for 4 months and would have been eligible for the Stimulus debit cards funded by trillion dollar coins bill, wouldn’t get this one, sorry Sergey). Any individual with whom a deduction under section 151 is allowable, so this means dependants or spouses on someone’s tax return don’t get their own check, but they still get $2000 each send as one lump sum to the tax filer, so it’s not that bad, unless you have more than three kids, then you don’t get additional money after three.

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