As Congress gets closer to approving a new round of Covid relief, the proposed $1,400 stimulus checks are likely to make the biggest difference in the pocketbooks of taxpayers in Mississippi and West Virginia.
An analysis of the first round of federal stimulus payments in 2020 shows the money provided the biggest average income boost to residents in those two states. The $1,200 payments to individuals and $500 per child doled out nearly a year ago via the CARES Act amounted to a 2.2% income boost for the average resident in Mississippi and West Virginia, according to an analysis of IRS data by the Federal Funds Information for States (FFIS). Kentucky residents saw an average 2.1% boost in income thanks to the stimulus checks.
The proposed income limits in the current $1.9 trillion federal relief bill are similar to the income limits for the CARES Act stimulus checks, so these trends are likely to play out again if the bill passes.
The news comes as Mississippi Gov. Tate Reeves (along with Texas Gov. Greg Abbott) announced he is lifting the statewide mask mandate, a move that President Joe Biden called “Neanderthal thinking.”
Some Democrats have previously suggested that federal relief for COVID-19 be withheld from states that do not mandate the use of facemasks statewide, but that idea did not take hold. The Biden administration is pushing the Senate to pass the relief bill before unemployment and certain other benefits expire this month.
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FFIS conducted its analysis by comparing the total in stimulus payments received in a state against the total 2019 income reported by its residents. So, it makes sense that lower-income states would see a greater impact. Conversely, residents in the higher income states of Massachusetts, Connecticut and the District of Columbia saw the smallest relative impact: Stimulus payments equated to 1% or less of the average income.
On average, the $270 billion in total Economic Impact Payments equaled 1.5% of total 2019 state personal income, according to FFIS.
The organization also noted that states with higher populations of children somewhat distorted the data because the money per child in most cases was a fraction of what each adult received. Some states “with below-average per capita incomes—such as Texas, Arizona, Utah, and Georgia—received below-average payments, due to their larger number of dependents,” the analysis said. “In those states, the reduced payments for dependents pulled down the statewide average.”
The most recent stimulus checks doled out in December and January and the bill under consideration now give full payments for dependent children. What’s more, 17-year-olds and adult dependents (anyone 18 or older) would also be eligible for a payment as part of this plan.