Stimulus Check Update: How Rich Americans With $5.7 Billion in Income Received Stimulus Checks

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  • Data found that 270 Americans with a combined $5.7 billion in income received some COVID-19 stimulus money from the CARES Act.
  • Despite huge earnings, tax write-offs made these Americans eligible for stimulus checks.
  • This occurrence exposed a flaw in the way stimulus payments were distributed.

You'd be surprised how much billionaires received in stimulus money.

Stimulus checks were made available by the federal government in both 2020 and 2021 with the goal of helping people to cope with the financial consequences of COVID-19.

Most people know that these checks were mailed out or deposited into people's bank accounts under both the Trump and Biden administrations, and that there were income limits to be eligible for the payments.

But, despite the fact that the stimulus money was meant to help defray the financial damage everyday people were experiencing due to lockdowns, new data from ProPublica shows a surprising number of billionaires received money from the federal relief efforts as well.

In fact, ProPublica found that a total of 270 taxpayers who had disclosed $5.7 billion in combined income on previous tax returns ended up qualifying for stimulus payments. Here's how this happened.

Some of the richest Americans were able to benefit from COVID-19 stimulus checks for this reason

According to ProPublica, a total of 18 billionaires and 270 other very wealthy people got thousands of dollars from the CARES Act, which was the first COVID-19 relief bill. This included hedge fund managers and corporate raiders who have billions of dollars in collective wealth to their names.

The CARES Act offered payments valued at $1,200 per person; $2,400 per married couple; and $500 per eligible dependent. Many very wealthy individuals received these payments because the IRS sent them out automatically to single taxpayers with a reported income of $75,000 or less on their tax returns and to married taxpayers with combined incomes of $150,000 or less.

While eligibility for the payments phased out above these income levels, the 270 rich taxpayers identified by ProPublica were able to get full or partial payments anyway because they were able to use tax write-offs to wipe out much of the income they had made. In fact, their write-offs and deductions left them reporting an income below the threshold for eligibility, despite huge earnings.

ProPublica found that while the 270 ultra-wealthy taxpayers had billions in collective earnings, the tax savings they were eligible for ended up allowing them to list low or even negative incomes on their tax returns. They thus came in well below the level at which they'd have become ineligible for CARES Act payments. This was likely an issue with the two other stimulus checks as well, although that wasn't specifically included in ProPublica's analysis.

How could this happen? The ultra-wealthy taxpayers have more flexibility when doing taxes than most people because they get little of their income in wages and often have business interests that allow them to declare more deductions and losses than most everyday people. Of the 270 wealthy people who got stimulus checks, just $82 million -- or 1.4% of their total earnings -- came from wages.

Some of the taxpayers who received these government payments indicated to ProPublica that they had returned the checks they were sent. Most also said they hadn't requested the funds and they were deposited without their consent. The very fact they received the payments at all shows one of the flaws in the automatic distribution of aid that the COVID-19 stimulus legislation authorized.

Unfortunately, while billionaires got stimulus payments, many everyday Americans continue to struggle with the lingering effects of the pandemic. And as it stands today, the government is unlikely to authorize a fourth payment despite a petition signed by millions demanding one.

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