Summary: Several GOP senators have proposed an alternative to the Biden administration’s proposed COVID relief bill. Among other provisions, the plan would offer direct payments of $1,000 per adult (with an additional $500 for dependents), phasing out at a rate of 10 cents per dollar above $40,000 in income ($80,000 for married filers). PWBM projects that this provision would cost $225 billion.
| Income group | Average benefit | Share receiving rebate | Percent change in after-tax income | Share of benefit |
|---|---|---|---|---|
| Bottom quintile | 1,300 | 100% | 27% | 28% |
| Second quintile | 1,685 | 100% | 7% | 27% |
| Middle quintile | 1,560 | 84% | 3% | 24% |
| Fourth quintile | 1,195 | 59% | 2% | 16% |
| 80-90% | 415 | 20% | 0% | 2% |
| 90-95% | 215 | 9% | 0% | 1% |
| 95-99% | 25 | 2% | 0% | 0% |
| 99-99.9% | 0 | 0% | 0% | 0% |
| Top 0.1% | 0 | 0% | 0% | 0% |
Note: “Income” is defined as AGI plus: above-the-line deductions, nontaxable interest income, nontaxable Social Security benefits, nontaxable pensions and annuities, employer-side payroll taxes, and corporate liability. Note that this definition excludes transfer income and thus understates low-income tax units' income.