Archive for Andy Kiersz

Trump’s delay in signing the stimulus bill could keep $5.9 billion from unemployed Americans

trump wind
Donald Trump.
  • President Donald Trump finally signed the $900 billion COVID-19 relief bill nearly a week after it was passed by Congress.
  • The delay means that unemployed Americans have already missed a week of the $300 supplemental unemployment insurance the bill provides.
  • With nearly 20 million Americans receiving some form of unemployment benefits as of early December, that would add up to almost $6 billion in foregone payments.
  • Visit Business Insider's homepage for more stories.

On Sunday, President Donald Trump finally signed the $900 billion COVID-19 relief package and $1.4 trillion omnibus package funding the government and avoiding a shutdown.

While many of the new law's provisions will help support individual, businesses, and communities across America, Trump's delay in signing the bill for nearly a week after it was passed by Congress is likely to be very costly for Americans receiving unemployment benefits.

Insider calculated how much, and it's quite a few billion.

Different kinds of funding

First, we need to consider the pipes through which this stimulus actually gets to people. 

One of the provisions in the relief package is a weekly $300 supplement to unemployment insurance, similar to the $600 weekly additional pay for unemployed workers included in the CARES Act in the spring and early summer.

The just-passed bill included an 11-week extension of the $300 supplemental payments, running through March 14, 2021. But because of Trump's delay in signing the bill into law, the first week of those payments has been missed, leaving millions of Americans without that initial $300 payment.

The supplemental payments go out to unemployed Americans receiving benefits from traditional state-run unemployment programs, as well as two federal programs implemented in the CARES Act. The Pandemic Emergency Unemployment Compensation (PEUC) program provides unemployment benefits to workers who have exceeded their normal state unemployment benefits, while the Pandemic Unemployment Assistance (PUA) program supports workers who would typically not be covered by traditional unemployment, like gig workers and workers directly affected by the pandemic.

As of the week ending December 5, the most recent data available from the Labor Department, about 5.5 million Americans were receiving traditional unemployment, 9.3 million were receiving checks from the PUA program, and 4.8 million were receiving pandemic emergency unemployment compensation.

The cost a week makes

All together, about 19.5 million Americans were receiving benefits from one of those three programs, and thus missed out on last week's $300 supplemental pay that they would have received if Trump had signed the legislation by Saturday. That represents about $5.9 billion in total supplemental unemployment insurance that wasn't paid out, assuming roughly similar numbers of Americans receiving benefits last week.

Although, as noted above, the supplemental $300 benefit was originally intended to run for 11 weeks, the missing week now effectively means that only 10 weeks of the extra money will be paid out, since the benefit is scheduled to end on March 14. Per The New York Times, it remains unclear whether or not states will be able to retroactively pay that money, with Labor Department guidance coming in the near future.

That could be just the start of problems caused by the delay - the PEUC and PUA programs were also slated to expire last week under the CARES Act, and were extended in the new bill. The Washington Post wrote that the delay in signing the bill could lead to further slowdowns in states implementing those extended programs, putting benefits for millions of Americans at risk.

Read the original article on Business Insider

Trump’s delay in signing the stimulus bill could keep $5.9 billion from unemployed Americans

trump wind
Donald Trump.
  • President Donald Trump finally signed the $900 billion COVID-19 relief bill nearly a week after it was passed by Congress.
  • The delay means that unemployed Americans have already missed a week of the $300 supplemental unemployment insurance the bill provides.
  • With nearly 20 million Americans receiving some form of unemployment benefits as of early December, that would add up to almost $6 billion in foregone payments.
  • Visit Business Insider's homepage for more stories.

On Sunday, President Donald Trump finally signed the $900 billion COVID-19 relief package and $1.4 trillion omnibus package funding the government and avoiding a shutdown.

While many of the new law's provisions will help support individual, businesses, and communities across America, Trump's delay in signing the bill for nearly a week after it was passed by Congress is likely to be very costly for Americans receiving unemployment benefits.

Insider calculated how much, and it's quite a few billion.

Different kinds of funding

First, we need to consider the pipes through which this stimulus actually gets to people. 

One of the provisions in the relief package is a weekly $300 supplement to unemployment insurance, similar to the $600 weekly additional pay for unemployed workers included in the CARES Act in the spring and early summer.

The just-passed bill included an 11-week extension of the $300 supplemental payments, running through March 14, 2021. But because of Trump's delay in signing the bill into law, the first week of those payments has been missed, leaving millions of Americans without that initial $300 payment.

The supplemental payments go out to unemployed Americans receiving benefits from traditional state-run unemployment programs, as well as two federal programs implemented in the CARES Act. The Pandemic Emergency Unemployment Compensation (PEUC) program provides unemployment benefits to workers who have exceeded their normal state unemployment benefits, while the Pandemic Unemployment Assistance (PUA) program supports workers who would typically not be covered by traditional unemployment, like gig workers and workers directly affected by the pandemic.

As of the week ending December 5, the most recent data available from the Labor Department, about 5.5 million Americans were receiving traditional unemployment, 9.3 million were receiving checks from the PUA program, and 4.8 million were receiving pandemic emergency unemployment compensation.

The cost a week makes

All together, about 19.5 million Americans were receiving benefits from one of those three programs, and thus missed out on last week's $300 supplemental pay that they would have received if Trump had signed the legislation by Saturday. That represents about $5.9 billion in total supplemental unemployment insurance that wasn't paid out, assuming roughly similar numbers of Americans receiving benefits last week.

Although, as noted above, the supplemental $300 benefit was originally intended to run for 11 weeks, the missing week now effectively means that only 10 weeks of the extra money will be paid out, since the benefit is scheduled to end on March 14. Per The New York Times, it remains unclear whether or not states will be able to retroactively pay that money, with Labor Department guidance coming in the near future.

That could be just the start of problems caused by the delay - the PEUC and PUA programs were also slated to expire last week under the CARES Act, and were extended in the new bill. The Washington Post wrote that the delay in signing the bill could lead to further slowdowns in states implementing those extended programs, putting benefits for millions of Americans at risk.

Read the original article on Business Insider

This map shows how much the $600 stimulus check is worth in every state

New York City
$600 at the national average price level translates into just $516 in New York State, after adjusting for cost-of-living.

Over the weekend, Congress finally came to an agreement on a new stimulus package intended to fight the ongoing economic turmoil stemming from the coronavirus pandemic. One of the major features of the bill, which is expected to see a vote late Monday, is a $600 direct payment to most adults in the US, along with an extra $600 per child to families.

Of course, $600 will go a lot further in some parts of the country than others.

The US Bureau of Economic Analysis recently released its latest cost-of-living estimates across US as of 2019. These "regional price parities" show how expensive goods and services are in different states, relative to the national average.

We can use the regional price parities to get an idea of how much $600 is actually worth to consumers in each state. The BEA releases price parities every year, indexed to a national average of 100, with values for a state below 100 indicating a lower cost of living than the national average and values higher than 100 meaning more expensive than average goods and services.

In 2019, the most recent year for which data is available, New York State had a regional price parity of 116.3, meaning that prices in the state tended to be about 16.3% higher than average. Given that, $600 at the national average price level would be worth just $516 in the Empire State.

Meanwhile, Arkansas had a regional price parity of 84.7, meaning that prices in that state were about 15.3% lower than the national average. So, a $600 stimulus check at the national average price would be worth $708 in Arkansas after this cost-of-living adjustment.

Following the same logic, this map shows how far a $600 stimulus check would go in each state. Hover over a state to see the regional-price-parity-adjusted value of $600 in that state:

 

Read the original article on Business Insider

NBA Finals MVP LeBron James made $37 million last year — and that’s a steal

lebron james
  • LeBron James, the Finals MVP, is one of the greatest basketball players of all time.
  • However, the NBA's salary cap rules mean he typically earns less than other mega-star athletes.
  • European soccer leagues lack a salary cap, and both Lionel Messi and Cristiano Ronaldo made far more last year than James.
  • Visit Business Insider's homepage for more stories.

LeBron James led the LA Lakers to an NBA championship on Sunday night, marking his fourth championship and first since joining the Lakers in 2018.

The Lakers' victory adds to the age-old debate on whether James should be considered the greatest basketball player of all time. And with that debate also comes the question of whether he is being paid like the potential GOAT.

On Monday, The Wall Street Journal's Ben Cohen made the argument that James represents a "market inefficiency" in the NBA. While he made over $37 million in salary over the last year, the NBA's salary cap rules mean that this is effectively around the most a team can play a player, even a once-in-a-generation talent like James, and a fair market valuation without the cap would suggest a much higher rate of pay.

To get a quick sense of how James' pay stacks up, we compared his salary to those of comparable mega-star athletes:

James' $37.4 million was slightly above the Los Angeles Angels' Mike Trout's annual average pay of $35.8 million, according to CBS Sports, but he was below the other athletes we looked at. Kansas City Chiefs quarterback Patrick Mahomes signed a contract this year with an average annual payout of about $45 million, according to the NFL.

Unlike the NBA, European soccer leagues do not have a salary cap, which shows up in the enormous salaries for Barcelona's Lionel Messi and Juventus' Cristiano Ronaldo, as reported by Forbes. These are arguably the strongest comparison for James — Messi and Ronaldo are arguably the two best soccer players of their generation, and their importance to their teams is similar to James' crucial role in the NBA. It's not hard to imagine a capless NBA resulting in a $70-90 million per year payout to James.

Before the modern salary cap went into effect, Michael Jordan, the leading competitor with James for the title of greatest NBA player of all time, earned a career high of $33.1 million in the 1997-1998 season, according to Spotrac. Adjusting by the most commonly used measure of inflation, that would be worth about $53 million in 2020 dollars, or about 40% larger than James' salary.

There are a lot of complicated factors in trying to figure out what James is "really" worth. Our comparison above cuts across leagues and sports with very different salary rules and team structures. While Mike Trout is an incredible baseball player, he's only up to bat a relative handful of times in a given game, while James could be involved in nearly every play.

The soccer superstars made roughly double what James did, but the economics of the NBA are very different than European soccer.

Further, any counterfactual about what the NBA would look like without a salary cap would imply a very different league with very different incentives for teams and GMs, meaning any attempt at estimating a market value in that world would be highly speculative.

While $37 million in a year is an extremely high rate of compensation, it may not be as much as King James would be worth in a different world.

Read the original article on Business Insider

Even the lowest-paid workers in America have a higher tax bill than Trump

Donald Trump phone
President Donald Trump.

On Sunday, The New York Times released a bombshell report on President Donald Trump's tax returns over the past two decades. Among the many stunning revelations was that Trump, a self-described billionaire and real-estate mogul, paid just $750 in federal income taxes in 2016 and again in 2017.

Business Insider estimated that workers making just under $18,000 a year would have paid a similar amount of income tax as the president did, based on listings of tax brackets for 2016 and 2017 by the Tax Foundation, an independent tax-policy nonprofit.

Estimating a normal worker's income taxes

To keep things simple, we'll consider a single worker with no children in our calculations.

Our hypothetical worker is using the standard deduction, which means they aren't itemizing various specialized deductions and tax breaks for things like interest paid on a mortgage or charitable donations.

We also assume they took the standard personal exemption, which was another tool in the tax code to reduce taxable income based on the number of dependents in the filer's household; it was removed under the 2017 Tax Cuts and Jobs Act.

According to the Tax Foundation, the standard deduction for a single filer in 2016 was $6,300, and the personal exemption was $4,050. That means our hypothetical taxpayer could deduct $10,350 from their actual income when calculating their taxable income in 2016.

In 2016, the lowest tax bracket covered taxable income under $9,275 for single filers, according to the Tax Foundation, and that income was taxed at a rate of 10%.

Putting all this together, a single filer in 2016 taking the standard deduction and personal exemption who made $17,850 would have had a taxable income of $7,500 and thus would have owed $750 in income taxes, equal to what Trump reportedly paid.

A similar calculation using the standard deduction, the personal exemption, and tax brackets from 2017 suggests a taxpayer who made $17,900 would have owed $750 that year.

The overwhelming majority of Americans working full time make much more than $17,900 and thus would have owed more than $750 in federal income taxes, under our above assumptions.

Most Americans make much more than $17,900

According to the Bureau of Labor Statistics, the median salary as of May 2017 for gaming dealers, who run gambling games in businesses such as casinos, was $19,820, the lowest reported annual median wage among occupations in the BLS database.

With the 2017 standard deduction and personal exemption, a typical gaming dealer would have owed $947.

Fast-food-prep and serving workers had a median annual wage of $20,180, leading to an estimated tax bill of just over $1,000.

Business Insider's Joseph Zeballos-Roig reported that Trump's tax bill was lower than that of Americans making as little as $20,000 a year.

A similar calculation shows that a married couple filing jointly, taking the standard deduction and two personal exemptions, and earning $28,200 in 2016 and $28,300 in 2017 would have had an income-tax bill of $750.

This calculation covers only the federal income tax. Most workers and business owners pay many other taxes, like the payroll taxes that support Social Security and Medicare. Indeed, the Trump Organization lawyer Alan Garten told The Times that Trump had paid "tens of millions of dollars in personal taxes" since 2015, though The Times noted that this did not directly address Trump's income-tax payments.

This is also, of course, a very simplified calculation. The tax code is enormously complex, and there are plenty of other caveats — deductions other than the standard deduction, or tax credits like the earned-income tax credit — that could make things more complicated for our hypothetical taxpayer.

Read The New York Times' full report »

Read the original article on Business Insider