Most Californians would get big stimulus checks under Biden plan, analysis says
Nearly nine in 10 Californians would get all or part of the $1,400 stimulus payments proposed by President Joe Biden, an economic research firm’s new analysis has found.
The plan, which is moving quickly through Congress, would mean about 87% of the state’s adults and children, or about 34 million people, would benefit from the payments, according to the Institute on Taxation and the Economy.
The average tax filer and their dependents, would get average payments of $2,450.
Other estimates of average California benefits at different income levels:
▪ Less than $26,500, $2,280.
▪ $26,500 to $46,900, $2,830
▪ $46,900 to $75,900, $2,910.
▪ $75,900 to $134,100, $2,930.
▪ $134,100 to $313,700, $1,770.
▪ $313,700 to $855,900, $120.
▪ $855,900 and above, $30.
The impact of the payments “will be temporary but could matter a lot for some households on the edge. For most, however, do not expect people to spend it freely until there are more positive signs for the overall economy,” said Michael Shires, associate professor of public policy at the Pepperdine University School of Policy.
He said that those with less than $26,500 in income, the lowest 20% of California incomes, would probably use the extra money to pay outstanding debts.
The next income group’s new spending would probably be more felt in the overall economy since they are more likely to buy items they might not purchase otherwise, Shires said.
“For the remaining 60% of Californians, it will have a much smaller impact. Given their higher incomes, many will likely put it away in savings for the next rainy day and for some, they will not see any benefit at all,” he said.
There are some who can get payments above the income cutoff levels because “there are people who have high incomes in real life but for tax purposes they can have very low incomes because of business losses from previous years or something like that,” said Steve Wamhoff, ITEP director of federal tax policy.
The Biden plan, which is being considered this week by the sympathetic Democratic-run House Ways and Means Committee, would mean that since December, people would get as much as $2,000 per person as an economic stimulus, a plan that was championed by President Donald Trump.
Biden’s plan would phase out the benefits starting at $75,000 in adjusted gross income for individuals and $150,000 for joint filers. Those with adjusted gross incomes of more than $100,000 as an individual or $200,000 filing jointly would get no benefit.
Some centrist Democrats pushed to lower those limits.
“It does not make sense to send a check to those (higher income) individuals who are still working, earning a decent living,” said Sen. Joe Manchin, D-West Virginia.
House committee Democrats opted for the higher amounts.
The amount of the payments would be based on incomes in 2019 and 2020, though exactly how 2020 income would be considered and calculated has not yet been determined.
This story was originally published February 11, 2021 at 5:00 AM.
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