The coronavirus relief bill passed by Congress this week is expected to slash taxes by an average of $3,000, according to an analysis by the Tax Policy Center.
Unlike Republican tax cuts, the breaks in the $1.9 trillion bill will largely benefit low-income and middle-income families.
In all, the bill is expected to raise after-tax incomes by an average of 3.8%.
Families with children will get an average tax cut of more than $6,000 under the bill.
Nearly 70% of families are expected to see tax benefits from the relief package.
“By contrast, nearly half of the TCJA’s 2018 tax cuts went to households in the top 5 percent of the income distribution,” the Tax Policy Center noted.
Measures add up:
The tax breaks will come from the $1,400 stimulus payments, the expansion of the child tax credit and earned income tax credit, and the child and dependent care tax credit.
But these tax breaks are temporary. Democrats are already pushing to extend certain measures like the child tax credit expansion permanently.
The stimulus payments, which will provide households an average of $2,300, represent two-thirds of the tax cut.
Low-income families with kids to see huge boost:
Low-income families with kids will receive the most benefits from the package.
Families making $25,000 or less would get an average tax cut of $2,800, boosting after-tax income by 20%.
A low-income household with children would see a tax cut of nearly $7,700, boosting after-tax income by over 35%.
