Let’s take a closer look at Biden’s $ 1.8T for families and education
WASHINGTON (AP) – President Joe Biden’s administration wants to make $ 1.8 trillion down payment for the future children, families and higher education, claiming that this would produce lasting benefits for the economy. Paying that would equate to $ 1.5 trillion in tax hikes over the next decade for wealthier households.
Let’s take a closer look at where the money is going and where it comes from:
– $ 200 billion to provide free preschool education to all 3 and 4 year olds. The administration estimates that 5 million children would benefit and an average family would save $ 13,000.
– $ 109 billion to provide two years of free community college to all Americans. Young immigrants living illegally in the United States who were brought to the country as children to stay would also be eligible.
– Increase the maximum amount of the Pell scholarship by $ 1,400 per eligible student. Pell Grants are financial aid for low-income students, and the increase would help reduce reliance on student loans.
– $ 46 billion for historically black colleges and universities as well as tribal colleges and universities. This would include $ 39 billion to provide two years of subsidized tuition fees to students from families earning less than $ 125,000 per year.
– $ 9 billion for scholarships and teacher training.
– $ 225 billion to subsidize child care services for families and support child care workers. Families earning 1.5 times their national median income would pay a maximum of 7% of their income for all children under 5.
– $ 225 billion to create a national family and medical leave program. The program would provide workers with up to $ 4,000 per month, with a minimum of two-thirds of the average weekly wage replaced, which would increase to 80% for lower-paid workers.
– $ 45 billion to improve school meals and provide food benefits to children during the summer.
– Match the duration and amount of unemployment benefits to the underlying economic conditions, creating an automated response to a recession.
– $ 200 billion to make temporary reductions in health insurance premiums for Affordable Care Act plans permanent.
– Extend until 2025 an improved child tax credit that could be paid monthly. Eligible families would receive $ 3,600 per year per child for children under 6 years of age. The payment would be $ 3,000 per child for children 6 to 17 years old.
– Permanently increase tax credits for childcare. The credits would cover up to half of a family’s expenses for the care of children under the age of 13, to a total of $ 4,000 for one child or $ 8,000 for two or more children.
– Make the extended earned income tax credit permanent for childless workers.
– Allow the IRS to regulate paid tax preparers.
Biden’s plan would cover these proposed expenses by:
– Increase funding for the IRS application to audit wealthier taxpayers and require financial institutions to report income from investments and business activities in a manner similar to wages. This could bring in 700 billion dollars over 10 years.
– Raise the top tax rate for the richest Americans from 37% to 39.6%. The rate was 39.6% before the 2017 tax cuts.
– Taxpayers who earn $ 1 million or more per year, the top 0.3%, would no longer pay a 20% rate on income from capital gains such as the sale of one stock or another active. Instead, they would pay 39.6%.