After a month of negotiations, Congress will send the American Rescue Plan Act to the Oval Office for President Biden’s signature. The comprehensive bill includes critical components to address job loss, poverty and a weak economy.
The American Rescue Plan Act is unique in that it employs the tax code to deliver relief to those struggling most. The five charts below provide a glimpse of how the plan helps families across the income spectrum and also targets economic relief to low- and moderate-income families in the form of cash payments and expansions to the Child Tax Credit and Earned Income Tax Credit.
Combined, cash payments and tax credit expansions are particularly targeted—as a share of income—toward households who earn $65,000 or less annually. Families in the poorest 20 percent of households—$21,300 or less annual income—receive an average income boost of one-third. On average, these provisions will send $3,460 to households in the bottom 80 percent, giving a more dramatic boost to lower-income households as a share of income. For families with children, the payment would be much larger than the averages depicted here.
