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Stimulus Check Update and Stimulus Package Update August 14, 2020

Stimulus Check Update

Stimulus Check Update and Stimulus Package Update August 14, 2020

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Quick Overview

  • The Senate is now officially on vacation. Senate Majority Leader Mitch McConnell has adjourned the Senate. Senators will return to stimulus package negotiations on September 8th, or when both parties decide to come to an agreement, whichever comes first.
  • President Trump is separately pushing for a lower capital gains tax rate. Biden is trying to raise it.
  • The fastest vaccine ever developed took 4 years and the US says that we’ll have the Covid-19 vaccine by January. Russia says their Covid-19 vaccine, the Sputnik V, will be for sale in the 4th quarter of this year.

Party Updates

Senate Majority Leader Mitch McConnell has now officially declared the Senate to be on vacation.

McConnell says stimulus package negotiations will resume when Senators return from vacation on September 8th or the Senators will be ready to return earlier if the Democrats are willing to compromise. Treasury Secretary Steven Mnuchin said “the Democrats must make the next move on stimulus talks. Anytime they have another offer to make, they can either call me or I’ll go see them, but they have to compromise.” Reporters asked Nancy Pelosi, Leader of the Democrats in the House of Representatives, when she would talk with Mnuchin. Pelosi responded by saying that she would talk with Mnuchin “when they are willing to spend $2 trillion dollars.”

This is double what the Republicans are looking to spend and the Republicans are saying that’s unacceptable. Mark Meadows, one of two negotiators, says that the Republicans would consider spending as much as $1.5 trillion, up from the initial offer of $1 trillion. Meadows says that the Democrats would rather have no deal at all than agree to a price tag around $1 trillion to $1.5 trillion.

Senate Majority Leader Mitch McConnell says “the Democrats are barely even pretending to negotiate” even though McConnell, who is the leader of the Senate, has not been to a single negotiation meeting.

Nancy Pelosi told reporters that we can’t wait until September to pass a stimulus package, otherwise, people will die. Pelosi says that and refuses to take the $1 to $1.5 trillion deal.

Unemployment Executive Order

The executive order does allow for the self-employed people to receive it, but it may end up where the states choose not to cover the self-employed workers by opting to use their traditional system. About 30% of the current recipients of unemployment benefits are the self-employed. The states would need to reconfigure their state unemployment systems to include the self-employed, but it is considered to be a very difficult implementation process.

Additionally, you need to receive $100 in state unemployment benefits to qualify for this additional federal unemployment assistance, which is going to leave out 1 million Americans. If you are left confused with these terms. Don’t worry you’re not the only one.

The DOL, the Department of Labor, requested that Treasury Secretary Steven Mnuchin issue further guidance and clarification on this executive order. The Department of Labor said that if the executive order gives $300 a week, then that would give 50% of workers at least the same amount of income as when they were working. If the states chip in their $100 to make it $400 a week, then 66% of workers would receive the same amount of income as when they were working.

Tax Policies

President Trump and Joe Biden are battling on tax policy when it comes to the rich. The highest capital gains tax rate for the rich, if you’re in the top tax bracket, is 23.8%. That’s 15% long term rate + the extra 5% + the 3.8% net investment income tax, so 23.8%. President Trump is pushing to get this lowered down to 15% all-in.

White House Economic Advisor, Larry Kudlow, says that this will spur investment and will be the engine for economic recovery. Joe Biden is attempting to raise the capital gains tax rate from the 23.8% to 39.6% for people making over a million dollars.

And please keep in mind that none of these figures include state income taxes, if applicable in your state.

The Manhattan Institute is saying that “a reduction in the capital gains tax is just the wrong tool for the economy right now. Capital gains tax rates are not holding the economy back.”

Biden says that this increase in taxes would generate the government $448 billion over 10 years.

Again, this applies only to the high income earners.And both parties believe that their policy is more popular with the public.

Covid-19 News

  • The United States reported 51,443 Covid-19 cases and 1,076 fatalities on Thursday according to the John Hopkins University.
  • The government has spent $10 billion dollars on six vaccine projects.
  • Once a Covid-19 vaccine gets approved, our government will pay for the delivery and administration of millions of doses as soon as possible. This is expected to occur in early 2021.
  • Russia has approved their Covid-19 vaccine, the Sputnik V, and will begin mass vaccinations in their own country in October. After their own mass vaccination campaign, they will begin selling their vaccine internationally.
  • Putin claims that there are 20 countries of interest that have ordered a billion doses.

Please remember, that the Sputnik V, has not even completed their clinical trials and they have not released any data. Russia has offered to help the United States by providing vaccines but the US has declined the assistance. A Russian official said that once the Sputnik V proves to be one of the most effective vaccines, the US will regret letting politics get in the way of access to a vaccine.

Please keep in mind that the fastest vaccine ever developed took 4 years. Critics are saying that corners are being cut. Please do your own research before going out and buying the Sputnik V.

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