COVID-19's Impact on Taxpayers: 75% of Regions in Total Lockdown - Research Paper

Introduction

One of the groups that have been walloped by the effects of the COVID-19 outbreak is the taxpayers. This comes at the moment when about 75% of the regions that are experiencing the worst due to this virus, have gone to total lockdown, with most of the remaining facing partial lockdown. The USA is one of the nations in the world with the most significant and stabilized economies. Companies have closed, and most big and small businesses have also been closed due to the high rates of infections in the USA (Salah Hasan, 2020). Consequently, if some are still operating, then their taxes have reduced tremendously. It is, therefore, a vital challenge on the taxpayers because they no longer get reasonable outcomes. Others who are getting a little inflow in a month are also affected because the dependency ration has profoundly increased. It is, therefore, a tragedy both from an individual perspective and a corporate perspective.

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The challenge is worldwide, and most nations are deteriorating in their economies, as much is released in the stimulus packages to curb the spread of COVID-19 in the health sector to manage those who have been overwhelmed with the symptoms. The central idea here is that taxpayers are not in a position to submit their taxes in time in the USA. This is what triggered the federal government to collaborate with the state government in responding to the fallout caused.

How Much Individuals With Dependents Receive?

An individual with dependents will have to file their returns, including those who have not been filing, for them to become eligible for the packages. Congress and the federal government agreed that a total of $292 billion would use as a rebate people manage their expenses at home, as the tragedy continues to impact the income of the majority. There are two groups of dependents described by the taxpayer-care act package. First, are the children who are below the adult age, while the second category consists of those who are past the adult age, but are still regarded as dependents by families. For the children, the eligibility is guaranteed, while the second category will not be eligible (Miller et al., 2020). The rebate, as stipulated in the CARES act, would offer $500 per child, and there is no limit for the number of children who are eligible for this. This decision creates a smile on the families leaving with more children, as they would be considered and will enjoy highly from the Taxpayers-Care act.

However, the category of dependents who are not yet filing would not be eligible for any taxpayer cut; thus, the individuals hosting them will have no take their expenses and would face a considerable challenge during this time. Meanwhile, there is only one alternative for such people, which is filing the non-resident individual returns under the nil returns. This will make them re-eligible, although experts and analysts suggest that not everyone would be able to do the filing since the duration given is very low; hence it is with no doubt that some will miss.

How Much Individuals and Corporations Will Receive?

Analysts suggest that, on average, every taxpayer will get a rebate worth $1,729. The basis of creating the differences that one individual and corporations receive primarily relies on the income level. Taxpayers in the least category of income (decile) between (0-10% and 10-20%) would receive $1,457-$ 1,675) respectively. Individuals in the category of 70-80% and 80-90%) will get $1,928 and $1,981 respectively (Miller et al., 2020). The higher value of rebates for the households receiving higher payments is because they have high marriage rates and also many children in their households. The children could be adapted or genetically, but the argument was based on the fact that most families with higher income often tend to have more dependents and marital status in the USA.

The taxpayer-care act is also fair when it comes to the distribution of income after taxes, sometimes referred to as after-tax income. For instance, with the stimulus package and rebate rates stated above, the low-income earners would receive a total of 25.4% after-tax income. The middle-income earners would receive a boost of about 4.5%, while high-income earners will receive no tax after income (Miller et al., 2020). For the corporates, they will receive loans from the government to help them manage their operations and continue with their manufacturing and production tasks. This will ensure that products are made available, as the supply chain is continuous, even as most individuals are forced to remain in their households to curb the spread of COVID-19. Using the 2009 Recovery Act which stipulated that in such occasions, $831 billion will be availed to the corporates, the American government took the initiative to provide a total of $50 billion for companies and organizations to manage their operations ("Work on US COVID-19 economic stimulus package starts," 2020).

Maximum Amount of Salary a Taxpayer not Qualify

During the time of the worldwide pandemic, some companies may elevate the salaries, making it difficult for them to afford taxes when COVID-19 comes into an end, or to manage their operations effectively. People receiving government paper checks will not be affected as such, but some restrictions outline the maximum amount of salary that the taxpayer should qualify for. This comes after the rebates offered as higher after-tax income to the low-income earners. The ruling commissions led by the ministry of labor debated and came up with a technique called "special fast track," which will monitor the progress of making salaries to ensure that a taxpayer's salary is limited to a certain amount. The USA labor departments quoted value of EUR 126.94 to be the maximum amount that any taxpayer should qualify for ("Work on US COVID-19 economic stimulus package starts," 2020). The reason for this is that most of the people receiving salaries currently working at home will only need fewer allowances to manage their bills. The limitations have also been motivated by new laws that allow taxpayers a maximum of $5,000 fee of the tax credit.

Finally, individuals can also smile after the federal government proposed various laws to control the prices of assets by corporates and organizations at the time of the COVID-19 outbreak. Following the $500 billion boost for corporates announced by the government, the costs of the manufactured products have reduced, to make the ordinary citizens afford them more straightforwardly ("Work on US COVID-19 economic stimulus package starts," 2020). This is governed by the implicit taxes act, which also rendered small businesses registered under the federal law to easily access loans and financial boosts to aid their operations and enhance their steady supply of the essential products to people. In summary, the Taxpayer-Care Act in the USA, would help in re-establishing the economy, and also in derailing the rate of economic fallout.

References

Miller, D. S., Lee, M. (., Semanski, K., & Webb, S. (2020). Summary of the tax provisions of the CARES Act. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3570888

Salah Hasan, M. (2020). World's outbreak caused by COVID-19. Acta Scientific Veterinary Sciences, 2(4), 26-27. https://doi.org/10.31080/asvs.2020.02.0060

Work on the US COVID-19 economic stimulus package starts. (2020). Emerald Expert Briefings. https://doi.org/10.1108/oxan-es251261