The Tax Policy Center broke down how the Democrats COVID-19 relief bill, which will likely be signed into law this week by President Biden, will affect Americans across income brackets in one easy-to-read chart on Monday.
In its analysis, TPC compared the American Rescue Plan’s expected tax relief to that of the 2017 Republican-led Tax Cuts and Jobs Act, which also passed through the Senate along party lines with a simple majority vote thanks to a procedural tool called budget reconciliation. This time around, the vast majority — nearly 70 percent — of the tax benefits from the ARP will go to low- and moderate-income households, which includes those making $91,000 per year or less. Nearly half of the TCJA cuts, on the other hand, went to the top 5 percent of earners, which that year included those who made more than $308,000.
— Tax Policy Center (@TaxPolicyCenter) March 8, 2021
Overall, the ARP’s $3,000 average tax benefit is almost double the average tax cut from the TCJA, in large part because of the next round of stimulus checks that will be sent directly to individuals, which the TPC analysis says will trim household taxes by about $2,300. Read the rest of the analysis here.