Three provisions in the legislation released this week by the House Ways and Means Committee would provide a 33% income boost on average for the poorest 20% of Americans, according to an analysis by the left-leaning Institute on Taxation and Economic Policy.
The three provisions covered by the new report are the relief payments of $1,400 and expansions of both the child tax credit and the earned income tax credit programs. Under the expanded child tax credit, eligible families would receive $3,000 per child between the ages of 6 and 17 and $3,600 for children under 6, paid out in monthly installments. The expanded earned income tax credit would provide more robust aid, especially for childless adults, increasing payments by as much as 200%.
For households in the lowest 20% of the income distribution — with an upper limit of $21,300 and average earnings of $10,900 per year — the three provisions would provide more than $3,000 in aid on average, ITEP said. Breaking it down by program, the relief payments would provide a 20.3% boost to income on average, the expanded child tax credit would provide 9.7% and the earned income tax credit would deliver another 3%.
Households higher in the income distribution would receive smaller payments on a relative basis, with those in the middle receiving a boost of about 6.6%.
Overall, all eligible families would receive an average payment of $3,290 for the year, based on 2020 household data.