The start of the coronavirus pandemic in the US-led to a severe downturn in the economic situation as businesses shut down around the world simultaneously for a prolonged spell of economic uncertainty. The unemployment rate spiked to an almost unsurmountable 14.8%. it was the highest faced by the nation since the post-World War economic recession. The federal administration responded with a series of stimulus checks.
The stimulus checks were in hindsight the correct measure given the hopelessness and gravity of the situation. Most low and moderate-income earners instantly lost their jobs or shifted to fewer working hours as companies downsized to survive.
While the US administration has managed to put the direct consequences of the pandemic on the economy behind it, it has come face to face with another grave danger for the economy in the form of record inflation rates, the highest in 4 decades.
In the absence of any more stimulus checks, it has raised the specter of an abrupt rise in poverty levels, something that had come down to manageable levels following the issue of the Economic Impact Payment under the American Rescue Plan Act signed by President Joe Biden in March 2021 immediately after he assumed office a couple of months earlier.
The opening up of the economy and the markets in the third quarter of 2021 saw an economic recovery and the administration raked in record revenues. This has helped states to declare a record surplus for 2021.
But this turnaround came at a price. The infusion of such a large amount of money directly into the hands of citizens led to a large demand for goods. People were expending more money on goods than on services for the first time in years. This coupled with a shortage of goods was partly responsible for the spike in rates of gasoline and essentials.
Added to that was the war in Europe which cut off cheap oil from Russia right at the moment the US needed it the most. The ban by the NATO countries imposed on Russia has hit them more than the country they attempted to punish.
People continue to clamor for a fourth stimulus check, but it is obvious that there is little chance of that happening as far as the federal administration is concerned.
States Move Into The Picture With Stimulus Checks Of Their Own
Most American states are flush with funds thanks to good revenue collection in 2021 on the back of an exceptional economic resurgence and also the funds they received from the Federal Reserve under the American Rescue Plan Act.
With most Americans staring at an uncertain economic future due to the record inflation rate, many of them realize that they will be back staring at another round of poverty unless they receive immediate support from the administration.
Every state has varied in the form of support they have proposed and also the extent to which they are willing to support. While there are a few direct stimulus checks on offer, states have also gone in for tax rebates, a cut in sales tax on items that have seen a strong increase in prices including gas and essential food items.
California Has Gone For Gas Cards To Protect Against Rising Gasoline Prices
California was the first state to give out state stimulus checks in two phases under the Golden State Stimulus Check I and II. Under a fresh initiative proposed by Governor Gavin Newsom, residents in California will get a $400 gas card for each card owned and registered in the state. Each family will get a maximum of 2 cards.
Residents who do not own cards will get a transit card that will enable them to avail free or subsidized travel within the state. The details of the scheme are being worked out and there appears to be a stalemate among legislators. But the Governor has assured of getting the cards into the hands of Californians by July this year.
Another Democratic governor, Jared Polis of Colorado, has announced legislative measures to fast-track stimulus checks to eligible residents. The Colorado Cashback program will provide a $400 stimulus check to eligible residents who have filed their 2021 income tax returns by May 31 this year. The payment will be restricted to low-income earners in Colorado.
Delaware has formed a relief rebate of a direct stimulus check of $300 per adult resident of the state. It is intended to help them face high prices of grocery items and gas.
Georgia governor Brian Kemp has signed a bill to send a rebate to resident taxpayers who have filed both 2020 and 2021 income tax returns. The state has proposed sending a $250 stimulus check to single taxpayers, double for married couples filing jointly, and $375 for heads of households.
Taxpayers in Hawaii are eligible for a stimulus check depending on filing status, the AGI, and the number of dependents. Household filers will receive $300 as individuals for income below $100,000 and $100 for others. Legislative measures have been completed and the payments should be on their way soon.
Eligible residents of Idaho will receive either 12% of their 2020 state income tax payments or $75, whichever is more. The rebate program was approved as early as February and the payments will continue throughout the year.
Maine Has Approved The Highest Direct Stimulus Check Payment
Maine has given the highest direct stimulus check of $850 to its residents with an AGI of less than $100,000 for individuals.
Minnesota’s residents can expect a one-off payment of $750 this year, though details are not available yet.
New Jersey residents will send qualifying taxpayers a Middle-Class Tax Rebate worth $500. Residents who paid taxes using a federal ID number and not a SS number will receive the payment too.
New Mexico residents who have filed their 2021 returns by May 31 will automatically receive the state stimulus check. The stimulus check will be worth $250 for single filers and double that for joint filers.
The payments have started going out by the last week of May. But residents who have opted for the paper check through the US Postal Service can expect their payment to be delayed by a few weeks.
If residents owe taxes to the state in 2021 and haven’t paid, they will have their rebate stimulus check adjusted against the unpaid taxes. The rebate payment will offset taxes owed individually or by joint holders.
