- The White House, according to the Washington Post, wants a Phase 4 Coronavirus Aid Bill that includes a number of handouts for the rich – such as cuts in capital gains and wage taxes.
- They also want to exempt employers from any liability if their workers get a corona virus at work.
- Research shows that giving cash to middle and low-income Americans during a downturn actually means more to the economy. Unlike wealthy Americans, they spend money that they get straight away. You got it going.
- We should find out how we can get more checks to families faster. These suggestions are a waste of time.
- This is a column of opinion. The thoughts expressed are those of the author.
- You can find more stories on the Business Insider homepage.
If you think Washington's third phase of the Coronavirus Aid Package is fun, the fight for the fourth phase should be a pleasure.
Already The Washington Post reported on Sunday The White House is reviewing measures that would disproportionately help wealthy Americans, such as lowering capital gains tax, lowering wage tax, and a flat-rate exemption that relieves entrepreneurs of liability if their employees receive COVID-19 at work.
Not surprisingly, these are measures the Trump administration Has played with before. But they were largely designed to be ineffective or too geared towards helping wealthy Americans – even by conservatives.
It is not difficult to understand why. A waiver that relieves business owners of liability for workers who receive COVID at work could cause entrepreneurs to return workers to workers earlier than planned. Or it could make them negligent in terms of cleanliness and adherence to social distance. Some of these measures must be continued until a coronavirus vaccine is available.
Lowering the capital gains tax – the tax on the income you get from investments like stocks and bonds – helps people who own these things. In the United States, that means the rich. According to Goldman SachsThe top 1% of income recipients make up 50% of household share ownership in this country. Just over 50% of Americans own stocks, 60% before the financial crisis.
Then there is a reduction in social security tax, which brings in about 6.2% of each employee's paycheck. The Institute for Tax and Economic Policy The figures for a 2% tax cut were cracked and it was found that almost half the benefits would go to the richest 20% of taxpayers.
And I shouldn't have to say that, but the last thing we need is less social security money in a crisis that hits older Americans more than anyone else in society. I mean come on.
That's a waste of time
Washington appears to be in a pattern when it comes to coronavirus support legislation. Republicans of the White House or Senate are proposing something that favors the rich or business so that it reads as if it was written by the villain in a Charles Dickens novel. Democrats freak out, and House Speaker Nancy Pelosi hovers a plan full of democratic ideas that shows how far the two sides are apart.
After this whole clown show, we get a bill that both parties can live with. The grandstand of the grandstand, but the bill is over. This is what happened to phase three last month. Back then it was a waste of time and today it is a waste of time.
The problem with what the Trump administration is throwing around here is fundamental. If those who have money do not have to pay taxes in a crisis, the ability of the federal government to do great things is compromised. And now, more than ever, we need our government to do great things.
For example, instead of letting the mostly wealthy people who buy stocks and bonds stick to their money, the government now has to send money directly to people affected by this crisis.
After all, some Americans are more affected by the corona virus than others. If you previously thought the inequality was bad, it will only worsen during the corona virus. Low-income workers were the first (though certainly not the last) to lose their jobs as a result of the disaster, and are likely to be the last to get it back. That's how it goes The last downturn worked.
We need money to get where it works best, and that means giving it to low and middle income families.
The MIT has researched It shows that low and middle income families tend to spend stimulus money immediately – that's the whole point of the program – while richer Americans don't change their spending habits. The money just doesn't change much for them.
For this reason, it is currently not economically sensible to lower the taxes on the houses. It just won't have as much of an impact on the economy as another check for a working family. In fact, this bill should be about how more of it can be sent. More quickly. Period.