Posted by I have been writing about American income inequality for some time: see here, here and here. For the first time, because of the American Rescue Plan, Biden’s big relief bill, the American government has begun to reverse the trend toward increasing inequality. According to the Washington Post the stimulus/relief bill will help the poorest Americans most (see chart below).
This is an enormous step forward and a major change in tax incidence. The bottom quintile will see its after-tax income increase by 20%, the next quintile will see their income increase by 9.3% and so on. These two income quintiles contain 46% of all Americans. According to calculations by the Committee for a Responsible Federal Budget, a Massachusetts family of four that had an income of about $53,000 would get around $66,000 from the government, including $15,500 in assistance that would have been available even without the stimulus. A single unemployed person in Tennessee would get around $44,000, including $6,200 that would have been available even without the stimulus. It is expected that this bill would lift 13 million Americans out of poverty of the 40 million people currently living in poverty. It is expected that poverty would decline by 42% among black Americans and 39% among Hispanic Americans.
This legislation is the most ambitious anti-poverty program in America perhaps ever.