I opened the mailbox and casually sorted through the various flyers and letters as I slowly walked up the driveway. It was a beautiful sunny day and I was in no hurry to go back in the house and stare at my laptop. The mail contained mostly junk. Nobody writes letters anymore. I flipped over one crisp, white envelope and my heart stopped. It was from the IRS. “Am I being audited?” I’m sure I’m not the only person with this reaction. Back in the house, I quickly tore the envelope and extracted the contents. It was a letter from President Biden proclaiming his success in the first few weeks in office. I sat down to read.
A key part of The American Rescue Plan is direct payments of $1400 per person for most American households. With the $600 direct payment from December, this brings the total relief payment up to $2000. This fulfills a promise I made to you, and will help get millions of Americans through this crisis.
As I read, I think about the coming burden of the check I need to write to the IRS to pay my federal tax bill. I think about the thousands of dollars I withheld from my pay check in 2021. A pay check I was fortunate to receive because our elected officials randomly chose not to shut my job down as part of the convoluted, and nonsensical “shutdown”. I think about the additional money I sent to the IRS because *gasp* I am saving to take care of myself as I get older. That tax burden far exceeds the pittance returned to me by “The American Rescue Plan” and similar payments last year.
Let me state that again to be clear in case you missed it. After taxing the daylights out of you, the federal government is giving you some of your money back under the premise that they are helping you. They then spent more federal tax dollars to send you a letter to tell you they are rescuing you and that you should be grateful they are sharing some of your money with you.
Now it’s time for the math portion of today’s post. What is monthly cost to run your household? You’ve received $2000.00 since December. It is now April. If you are truly depending on that government hand out for survival, does $2000.00 have you pretty well covered? Let’s assume for a moment you don’t own your own home and pay either rent or mortgage.
As we see above, the rent for a modest 1-bedroom affair is as much as $1,120 on average and we know in places that number is much larger. Quick math shows $2000 didn’t even cover the roof over our head for 2 months. And the numbers aren’t better if you have a mortgage.
Just looking at the largest mortgage demographic, we can see that nearly 27% of homeowners are setting up a cardboard box down by the river alongside the renters. Less than two months in, the $2000 cookie from the IRS is long gone.
Even those that own their home aren’t off the hook. The graphic here shows around $1200 a month. Even if we chop out the $158 for private mortgage insurance that a paid-off home wouldn’t have, monthly expenses still reflect a, in my opinion, conservative $1000/month. Note that one of the largest fees and the largest fee for many are local property taxes. (Notably, not deferred at all during the pandemic.) And of course the graphic doesn’t include things like food, clothes, medicine and other household necessities. Again we can see $2000.00, while nice, doesn’t really do much to “rescue” the average American.
For those of you who like to loan the government your money and are expecting a tax return, I wouldn’t go standing out by the mailbox anticipating that check anytime soon. Like the mail-in voting debacle that crushed the postal service, Congress acted without measuring the effect on the IRS of processing all these payments. In typical government read-fire-aim fashion, they’ve managed, once again, to overwhelm the system and the IRS is now weeks to months behind in processing 2019 and 2020 income tax returns. I would expect that income tax return check sometime later this year perhaps after Aunt Jane’s moldy Christmas cookies arrive from the US postal service.
My response to President Biden is the same response I have to his predecessor after receiving similar letters.
“Dear Mr. President, instead of breaking your arm patting your own back, please realize you h ave a lot of work to do. A lot. Instead of giving me token dollars, how about doing something to relieve my long-term tax burden? I promise if I’m not spending every last cent of my disposable income on taxes, I’ll be more than happy to help out my fellow Americans via charity and assistance anywhere I can. Otherwise, how about we get started on that whole promise of unity and healing you spoke of all through the election? So far, all I’ve seen is the left-wing, progressive playbook or were you going to get to the unity and healing stuff after your and your cronies in Congress get through your own agenda? Just curious. I’d like to share more with you but I need to get back to work so I can afford to send my hard-earned dollars to you.”