Rescue America Plan - Biden’s Stimulus Package

Podcast Transcript

the tax made simple, where we break down the complex and the ambiguous in a digestible fashion so that you can make informed decisions. Tax is made simple, is brought to you by the tax and accounting wizards at dark horse CPAs. Well, you're stuck with this ugly mug today as I'm going solo for this episode.

But I promise you, I will make it worth your time. If you're interested in the new stimulus package, dub D rescue America plan that Biden unveiled last week. What I want to talk about today is exactly what he's proposing and where we think things will land. When these proposals make their way into a buyable bill.

If you're watching this on YouTube, you should definitely click the link below to subscribe to the podcast. If you're listening to the podcast and you haven't yet subscribed, come on, man. Drink the dark horse Kool-Aid and sign up. Okay. So you heard about it and you either thought finally, or here we go again, the market's heard about it and they said,

Hmm, sounds inflationary.

Let's increase interest rates. The bottom line is that this proposal has an astronomical price tag of $1.9 trillion after the 900 billion that was authorized under the last bill in December. And where does Biden want this money to go? First of all, he wants to do a new round of $1,400 stimulus checks.

This would be per person, including dependence, regardless of age, between this check and the one from December, a family of five would get a check for $10,000. If they qualified for the full amount. The math is $600 from the first check plus $1,400 per person under the Biden proposal multiplied by five.

If that family supports a grandparent who may claim as a dependent, that check becomes $11,400. Next, he wants to increase the federal unemployment bonus to $400 a week from its current level of $300 a week and extend it through September of this year. This would continue to include self-employed folks.

And those facing displacement from their home would benefit from an extension to the eviction and foreclosure moratorium through September, as well as $30 billion to help low-income families who have lost their job, pay their rent and utilities. He also wants to increase the child tax credit from $2,000 per child to $3,000.

And if the child is under age six, the family will get an additional $600. The credit would be refundable to which it currently isn't in additionally he's requesting $40 billion in grants to support childcare centers and essential workers with meeting their childcare costs on the business. Front Biden is proposing allocating $35 billion for guarantees of up to $175 billion in low interest loans meant for small businesses, which is typically meant those under 500 employees, an additional 15 billion would be allocated for grants to these same small businesses.

He wants to require employers of all sizes to offer up to roughly 14 weeks of paid sick and family leave. This would include those caring for sick family members. The weekly benefit amount would be as much as $1,400 per week. Employers with under 500 employees would likely receive tax credits to cover the cost of the sick pay.

Also, he wants to increase the federal minimum wage to $15 an hour. And for reference sake, the current minimum wage is $7 and 25 cents an hour. Then there's 350 billion for state and local governments, 170 billion for schools, 20 billion for vaccinations and testing. And well, you get the point. This bill is going to be expensive.

Everyone has a different opinion on how much and where the money should go. However, one thing is for sure. This spending will not simply be made up for by taxes on increased economic activity. It's going to come in the form of higher taxes and that will happen. Trust me, just not this year is we don't believe the Biden administration will cut off its nose to spite its face.

They will likely wait until the pandemic has subsided. And the economy has recovered before implementing Biden's tax plan, which will substantially increase taxes on those making over $400,000. When it comes to the rescue America plan, we're confident that Democrats will concede or compromise on certain initiatives in order to avoid having to pass this bill, all the, a budget reconciliation, which would be a time consuming process and is not the correct format for some of these relief measures to avoid this, they will need 10 Republican votes in the Senate.

So what are they likely to drop in order to get these votes? I would start with the increase of the federal minimum wage to $15 an hour, because that wouldn't be allowed to be past the reconciliation. Anyway, the second concession they'd likely be forced into is a reduction of the amount allocated to state and local governments.

Republicans hate bailing out state governments, whom they find have created large deficits due to mismanagement. Last some of the price tags of certain benefits will have to come down. Maybe they won't be able to do $400 a week in additional unemployment temper. Maybe it will only last through June.

It's these types of concessions that Democrats will have to consider to move quick on their overall agenda. So, like I mentioned earlier, subscribe to this podcast and our YouTube channel. If you care about your business and your taxes, We've got this week, this morning on YouTube, which is a weekly video designed to give you a short form, download of the most important developments, affecting your business and your taxes.

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