How can this still be a thing: “White House Press Secretary Jen Psaki confirmed [on] Wednesday that Biden and Senate Democrats talked about lowering ‘the income level of people who receive the check’ in their meeting. Biden himself told House Democrats: ‘We can better target the number—I'm OK with that.’"
This is a problem for several reasons.
1. If you want to target by income, that’s fine! But how is the IRS supposed to decide who is worthy of consideration? 2019 taxes are utterly irrelevant to an individual or family’s 2020 pandemic situation. 2020 taxes aren’t due to be filed until April 15 (assuming no extensions, which are allowed). It is literally impossible for the government to know who is needy right now.
2. Why are Democrats arguing over income thresholds, just negotiating among themselves? Republicans aren’t going to provide any votes to pass this thing, so they are literally irrelevant to the process. So this is basically Democrats arguing with Democrats. For … exactly what? Eric Levitz at New York Magazine called it “a fetish for performing ‘fiscal responsibility’ for swing voters who are not watching and do not care,” which just about nails it. There isn’t a single person in the country who will give Joe Manchin or whoever else is pushing this nonsense an ounce of credit for making it harder for people to get some government cash—especially since the people excluded will disproportionately be not white. (Elected officials definitely get credit for punching poor brown people in the face.)
But also, Manchin has already conceded that $1.9 trillion should happen: “If it's $1.9 trillion, so be it." So why are Democrats still talking about this?
3. If it’s critical to keep higher earners from getting stimulus money, claw it back in their 2021 taxes. This solution is so stupidly simple that it boggles the mind that it’s not the easy answer. If you want to keep someone who made $100K or more, or whatever the arbitrary cutoff is, from receiving this check, just write a provision in the tax code that claws it back next year. Problem solved! Levitz has a theory about why this isn’t being considered: “It’s possible that moderates fear (consciously or otherwise) that withholding a relief check from an affluent voter will be politically costless, but ‘raising their taxes,’ in order to nullify a relief check that was already sent, would spur political backlash.” If that’s the thinking (and it’s the only theory that makes sense), then perhaps some of those “affluent” voters aren’t so affluent after all, and maybe that $1,400 check means something. Because people who really don’t need that money won’t notice it going out the door in taxes. If you’re a millionaire, what’s $1,400 to you? If you’re actually struggling to make ends meet, then you notice that money.
The answer is easy: Set the income threshold at a level of truly affluent individuals. $250,000 or something. Then there will be no political backlash if that cash is clawed back during tax time.
4. Or don’t claw anything back. Call it “stimulus” and let that cash hopefully percolate through our economy, boosting jobs and accelerating our return to normalcy. And if the 1% get 1% of the benefits of this stimulus, well, that’s better than the norm when they get 85% or more of any government largess. And if the deficit is really that much of a problem, go ahead and jack up marginal tax rates for the wealthy, and throw in a Wall Street financial transaction tax for good measure. There you go. The wealthy got $1,400? Who cares if they’re paying tens of thousands or more in new taxes.
The messaging for this relief package is clear and simple (even if mucked up with the $1,400 versus $2,000 check fiasco, since it was $2,000 that was promised in the Georgia runoff elections). Why mess it up with a complicated income threshold that is literally impossible to properly measure at this time? Just freakin’ cut some checks, bail out some states and cities, and grease the skids for the distribution of the vaccine, our economic recovery, and the eventual return to normalcy.
And if you want wealthy people to pay more? Well, that can be arranged later. And it should be, regardless.
