Short Term UBI

[USGrant1962]

Except for that large gig economy and all the self-employed that get screwed if it's an unemployment benefit. Basically anyone that is contracted/independent labor is screwed in that scenario.

A problem. But even the henney penneys are only predicting 20% unemployment. Why helicopter cash to the other 80%?

 

[MRG]

A problem. But even the henney penneys are only predicting 20% unemployment. Why helicopter cash to the other 80%?

An incentive to spend to restart the economy. I'm not convinced it's the right thing to do but prior exercises suggest it's successful.

I remember the cash from the financial crisis we blew right back into the economy.

 

[HarveyS]

If there is going to be a giveaway to jump start the economy, give it to all. No means testing.

I feel for the gig worker, but maybe this is another case of live for today and don't worry about tomorrow. For those ineligible for unemployment insuruance, I have to ask, did they pay a premium? I have unemployment insurance, and I (via my company) have paid the premium for the past 30 years.
Kind of like folks who never paid into SS, and then wonder why they don't get a check.
Are we looking at another crisis when these gig workers turn 70 and request benefits from SS, when maybe they did not contribute based on their gig or cash earnings?

 

[Montecfo]

See... now you're on to something useful. Forget UBI or sending people a check... use that money to make emergency changes to unemployment so more lost income is replaced and expand the scope of unemployment to self-employed people who have seen a drop in income.

I had the same response.

 

[pb4uski]

..... I feel for the gig worker, but maybe this is another case of live for today and don't worry about tomorrow. For those ineligible for unemployment insuruance, I have to ask, did they pay a premium? I have unemployment insurance, and I (via my company) have paid the premium for the past 30 years.
Kind of like folks who never paid into SS, and then wonder why they don't get a check.
Are we looking at another crisis when these gig workers turn 70 and request benefits from SS, when maybe they did not contribute based on their gig or cash earnings?

Well to begin with the employee doesn't pay UI... employers do. So while gig workers would not normally be eligible for unemployment benefits, it might be prudent to provide them with something to mitigate the financial contagion.

We have a friend like the second part.... in the past mostly under the table cash work which I'm sure she didn't claim... but some W-2 work also. I hope she has her 40 quarters in but I suspect hers will be the minimum benefit and she'll be in a world of hurt. She moved away and we haven't seen her for year so hopefully her situation has changed.

 

[harley]

Our next door neighbor was talking to us the other day. He's one of those living on SS and some govt. assistance programs. He is a vet, so he between that and having no real income he gets his medical care pretty much for free. But he was saying how his rent is rising faster than his SS, and he isn't sure what will happen.

In the midst of the conversation he mentioned that he's getting about $925/month from SS. He was a builder and site engineer, and for a large period of his life he was making $100K+ per year. So to me it's pretty obvious that he wasn't reporting and paying taxes on most of it. It's a perfect example of short term thinking.

He's a nice guy, but pretty pathetic. We help him where we can, but he still makes really bad financial decisions. But it makes us aware there are probably a ton of people out there in his boat. The $1K would be a wonderful windfall for him, but he's more likely to buy cigarettes and steak with it than to put it away to help with future rent increases. Sad.

 

[GTFan]

A problem. But even the henney penneys are only predicting 20% unemployment. Why helicopter cash to the other 80%?

Because you don't know all of the 20%.

Universal cash below a certain income level is coming. We can debate unemployed/independent rationales until the cows come home but expediency is everything here.

The only debate will be how long to keep that money coming, it won't just be a one-time deal.

 

[USGrant1962]

The Senate bill (Coronavirus Aid, Relief, and Economic Security Act - CARES Act) is here: https://www.finance.senate.gov/imo/media/doc/Coronavirus Tax Relief Legislative Text.pdf

While it is pending legislation and verboten here, this whole thread is already that, sooo here's my summary:

The proposed "tax rebate" is under Division B on Page 35:

1. $1,200 for single, $2,400 for MFJ; or net income tax liability, whichever is less
2. Minimum of $600/$1,200
3. An extra $500 per dependent child
4. Phases out starting at $75K/$150K AGI, it says reduction is not below zero, so I guess the minimum described above is only for folks with low/zero income tax liablility
5. A bunch of administrative and clerical rules
6. Only applies to 2020 tax liability

So I guess they are sending everyone a check and it gets trued up with your 2020 tax return.

There are also provisions for
-small business interruption loans,
-delay of business taxes like payroll and estimated taxes,
-aviation excise tax relief,
-a whole lot of medical supply chain regulatory relief,
-testing services,
-regulatory relief to support health care providers,
-research innovation provisions,
-exemptions/inclusions/revisions of medical regulations,
-education provisions,
-labor provisions, and
-money market guarantees.

EDIT - oh, and doing it through the tax code avoids creating a whole new program. I still think it is inefficient as heck, but Congress has to do stuff that will pass.

 

[Montecfo]

The Senate bill (Coronavirus Aid, Relief, and Economic Security Act - CARES Act) is here: https://www.finance.senate.gov/imo/media/doc/Coronavirus Tax Relief Legislative Text.pdf

While it is pending legislation and verboten here, this whole thread is already that, sooo here's my summary:

The proposed "tax rebate" is under Division B on Page 35:

1. $1,200 for single, $2,400 for MFJ; or net income tax liability, whichever is less
2. Minimum of $600/$1,200
3. An extra $500 per dependent child
4. Phases out starting at $75K/$150K AGI, it says reduction is not below zero, so I guess the minimum described above is only for folks with low/zero income tax liablility
5. A bunch of administrative and clerical rules
6. Only applies to 2020 tax liability

So I guess they are sending everyone a check and it gets trued up with your 2020 tax return.

There are also provisions for
-small business interruption loans,
-delay of business taxes like payroll and estimated taxes,
-aviation excise tax relief,
-a whole lot of medical supply chain regulatory relief,
-testing services,
-regulatory relief to support health care providers,
-research innovation provisions,
-exemptions/inclusions/revisions of medical regulations,
-education provisions,
-labor provisions, and
-money market guarantees.

EDIT - oh, and doing it through the tax code avoids creating a whole new program. I still think it is inefficient as heck, but Congress has to do stuff that will pass.

This seems a lot more logical than UBI.

 

[Tiger8693]

So I guess they are sending everyone a check and it gets trued up with your 2020 tax return.

I read it as using 2018 AGI from Tax Filing for the $75k/$150k limits, completely phased out at $99k and $198k. That knocks DW and I out of it, but both DD's should get full $2400. Assuming this passes.

Not sure how I feel about it. I guess we will see how necessary to was in hindsight once we are on the downslope (health impact wise) and understand the true financial/income impacts for individuals.

FYI. DW has been sent home starting this week, no pay. Return to work will be determined on a week by week basis. So far, our plants have not shut down, but starting to have a lot of people impacted by school and daycare closures. They will need this monetary help. Companies (most) can't afford to continue to pay employees with no "output" if they want to be around to re-employ when this is past us.

 

[pb4uski]

So what will a single with $74k of income or a couple with $148k of income do with $1,200 or $2,400? Unless they live beyond their means they will bank it. Meanwhile, for the struggling low income workers that have been laid off it'll pay perhaps a month's bills at the most... but what about next month? Stupid. You would have thought that we would have learned from the Bush economic stimulus checks.

... By the time the checks arrived in taxpayers' hands, it was late summer. It was too late to affect the first half of the year.

It was also too late to prevent the recession. ....

Even if the checks had arrived sooner, they wouldn't have made much difference. Tax rebate checks are not an efficient way to stimulate the economy. The biggest impact is made by increases in the food stamp program. They produce about $1.73 in demand for every dollar spent, according to an Economy.com study.

Check recipients didn't put the money back into the economy. A 2008 survey found that only 20% of those who received checks spent them. Another 32% put the money into savings. The rest use the checks to pay off debt. ...

 

[CRLLS]

I prefer that it is only a month's benefit at the moment. Nobody knows how long this employment situation might last. It could be over in 1 or 2 months. Maybe not. There may be other legislation down the pike. Maybe not. Just because the President wants a 1 and done bill to sign, doesn't meant that it is so. They have time to enact further, more targeted help if it comes to that. This gets money out to the public quickly. Legislation process takes a long time to hone in on a target.

 

[USGrant1962]

I read it as using 2018 AGI from Tax Filing for the $75k/$150k limits, completely phased out at $99k and $198k. That knocks DW and I out of it, but both DD's should get full $2400. Assuming this passes.

....

I missed that, think you are right but IANAL.

 

[JoeWras]

I read it as using 2018 AGI from Tax Filing for the $75k/$150k limits, completely phased out at $99k and $198k

Another reason I should have retired the previous year. Zero income year and a half now. Oh, we have dividends, but those are now cratering. The cash would actually come in handy, but we won't be eligible.

Oh well. We can tough this out I think.

 

[Fermion]

What does it mean they use 2018 AGI?

So if you had high income in 2018, but low income in 2019 and 2020, you would not get a check?

Could you still get the money at tax time in the form of a refund?

 

[Another Reader]

Based on the proposed cut off points, I don't see this as having much effect. People will buy a few necessities and pay a few bills. Will the proposed amounts pay rent or a mortgage payment? Maybe one or possibly two months worth if they get two times the full amount. It's people with higher AGI's that will go out and "blow that dough" in this situation.

I didn't get anything last time and I won't this time. From my personal perspective, that's ok. I don't need the money.

 

[Sue J]

The Senate bill (Coronavirus Aid, Relief, and Economic Security Act - CARES Act) is here: https://www.finance.senate.gov/imo/media/doc/Coronavirus%20Tax%20Relief%20Legislative%20Text.pdf

While it is pending legislation and verboten here, this whole thread is already that, sooo here's my summary:

The proposed "tax rebate" is under Division B on Page 35:

1. $1,200 for single, $2,400 for MFJ; or net income tax liability, whichever is less
2. Minimum of $600/$1,200
3. An extra $500 per dependent child
4. Phases out starting at $75K/$150K AGI, it says reduction is not below zero, so I guess the minimum described above is only for folks with low/zero income tax liablility
5. A bunch of administrative and clerical rules
6. Only applies to 2020 tax liability

Ha! In 2018 I thought I was so clever in keeping our tax liability as low as possible. Who would have thought that it would be the reference point for something like this a few years later? So if this is what the final language is we won't be getting the full $2400. Our tax liability was only $1118 mostly because we made full HSA contributions. So maybe we'd get the minimum of $1200?

Whatever we get we will be passing on to our son and DIL as a gift. He got furloughed last week from his job at a sound and lighting company. They do large events that all involve big groups of people at hotels and convention centers and within a few days every event in the next few months was cancelled.

When it happened our son mentioned maybe needing to borrow from us sometime in the future. We won't lend to him, instead we will gift what we can. He'll get unemployment and our DIL is looking for work.

 

[JoeWras]

What does it mean they use 2018 AGI?

So if you had high income in 2018, but low income in 2019 and 2020, you would not get a check?

Could you still get the money at tax time in the form of a refund?

I don't know, but I'm prepared for disappointment. Nothing is signed yet. We'll see.

 

[Fermion]

I *think* they would reconcile at tax time, such that if you didn't get a check right away you would be able to get a "check" at tax time.

I mean 2018 is 2 years ago. Seems silly to base current needs on your situation 2 years ago. Some could have lost a lot of money in 2019 (it would have been really hard to do that though).

 

[USGrant1962]

I *think* they would reconcile at tax time, such that if you didn't get a check right away you would be able to get a "check" at tax time.

I mean 2018 is 2 years ago. Seems silly to base current needs on your situation 2 years ago. Some could have lost a lot of money in 2019 (it would have been really hard to do that though).

The IRS has your 2018 AGI in hand to calculate your check. It does not yet have 2019 or 2020.

With ACA Congress figured out it could do stuff through the tax code, so there you go.

 

[target2019]

As being discussed, it will have a tough time getting passed. It overlooks those who worked with low wages, but had no tax liability.

 

[USGrant1962]

As being discussed, it will have a tough time getting passed. It overlooks those who worked with low wages, but had no tax liability.

It is still just a bill, on Capitol Hill...

Here is an article discussing this and two other proposals: https://finance.yahoo.com/news/coro...sals-to-get-money-to-americans-132226900.html

We'll see where it ends up, but IMO doing it through the tax system will be the quickest and easiest.

 

[target2019]

It is still just a bill, on Capitol Hill...

Here is an article discussing this and two other proposals: https://finance.yahoo.com/news/coro...sals-to-get-money-to-americans-132226900.html

We'll see where it ends up, but IMO doing it through the tax system will be the quickest and easiest.

Found something:

Taxpayers with little or no income tax liability but at least $2,500 in qualifying income would receive $600 for individuals or $1,200 for couples.

https://www.al.com/news/2020/03/cor...us-checks-walmart-bonuses-tj-maxx-closes.html

 

[gwraigty]

I haven't read in depth about all these proposals floating around, but the latest one referenced in post #58, well, I don't agree with everyone automatically getting a check. There are people who aren't experiencing any loss of income right now. Some probably won't, like the health care workers, first responders, etc. Retired people who are getting regular income through Social Security, pensions.

If this passed, in our household, DH and I would get $2,400. DS would get $2,100. None of us have had a loss or reduction in income. DS works in an essential business that cannot shut down (nursing home). DH's employer could be mandated to shut down. If so, he would qualify for unemployment under the new Ohio guidelines, but it's also possible his employer might continue to pay everyone for awhile.

DD is the one who has had a severe reduction in her hours at Panera Bread. Yet she would get nothing because she couldn't work in 2018 due to a medical problem that required major foot surgery, a lengthy convalescence, and physical therapy to learn to walk again. Just her rotten luck, I guess, but the rest of us would be paid money that we don't need. Ridiculous!

Along with anyone who may have entered the work force for the first time in 2019. I'm sure there are a lot of them out there who are hurting right now who also won't qualify for a payment.

 

[ivinsfan]

It is still just a bill, on Capitol Hill...

Here is an article discussing this and two other proposals: https://finance.yahoo.com/news/coro...sals-to-get-money-to-americans-132226900.html

We'll see where it ends up, but IMO doing it through the tax system will be the quickest and easiest.

Sesame Street or Electric Company?