How President’s Proposals can Affect Salon Pros

Joe Biden
Democratic presidential candidate former Vice President Joe Biden gives a speech on the Supreme Court at The Queen Theater, Sunday, Sept. 27, 2020, in Wilmington, Del. (AP Photo/Andrew Harnik)

President Biden outlined several proposals that will impact salon professionals. Most of these proposals benefit the average salon worker, including childcare, eviction ban, a freeze on student loan payments and raising the minimum wage to $15 an hour.  Some proposals were already implemented by executive order, and others need approval by Congress. BUT you must act on many of these to receive the benefit, so knowledge is king. Read on.
The recommendations below are part of the $1.9 trillion proposal as of this writing:

  1. Increase stimulus checks to $2,000. President Biden calls for more than $1,400 to bring the recent stimulus checks to $2,000 per person. If you earned $75,000 or less a year, you would receive an added $1,400 besides the $600 you already received. If you didn’t get your $600, you could deduct it from your tax return this April.

    This time, adult dependents would qualify for the direct payments. Previously, only child dependents in qualifying households who were under 17 could receive a stimulus check. Mixed status households, where one spouse does not have a valid Social Security number, would also be eligible under Biden’s plan. In those families, spouses and children with Social Security numbers would qualify.

  • Student Loans. Biden wants to extend the student loan payment pause and interest waiver for federal student loans through at least September 2021. There are growing calls for Biden to forgive a part of the country’s $1.7 trillion in outstanding student loan debt, but this was not included in his stimulus package. Biden would like to cancel $10,000 from every student loan, but this was not part of Congress’s plan

  • Create a $25 billion emergency fund to help childcare centers stay open and expand childcare aid by $15 billion to subsidize childcare for low-income families. Millions of children go without childcare. Parents are left to choose between caring for their children or putting food on the table. Women are particularly hit when no childcare is available. The proof is how women accounted for 100% of the lost jobs in December 2020, according to an analysis by the National Women’s Law Center.

  • Freeze on evictions. President Biden directed the Centers for Disease Control and Prevention (CDC) to extend a nationwide ban on evictions through March 2021. The executive order also extends the foreclosure moratorium on government-backed mortgages, including those backed by the USDA, VA, and HUD. It allows homeowners to apply for mortgage forbearance if they need it.

  •  If you owe back rent, Biden wants $30 billion in rental help and another $5 billion to help those experiencing a risk of homelessness find housing. About 14 million Americans are behind on their rent because of the pandemic crisis. Look for Biden to request keeping the moratorium in place through September 2021.

  • Boost weekly unemployment benefits an added $400. Biden’s $1.9 trillion Covid relief package, the American Rescue Plan, would boost unemployment benefits by $400 a week through September.

  • Raise the federal minimum wage to $15, up from $7.25 per hour. The federal minimum wage was last raised on July 24, 2009, when it rose from $6.55 to $7.25 per hour. Keep an eye on this one because it will face opposition by most Republicans. The result might be an in-between compromise.

  • Increase the child and dependent care tax credit to a maximum of $4,000 for one child under age 13, or $8,000 for two or more children. Families earning between $125,000 and $400,000 in income will receive a partial credit.

  • Your Taxes
    Biden proposed a return to the 39% top tax rate from its current level of 37%. He pledged no new taxes on anyone making less than $400,000. The wealthy will face higher taxes. Individuals can currently gift or make a bequest of $11.7 million, or $23.4 million for a married couple, before facing the 40% estate or gift tax.

    Social Security
    Benefit increases are a part of the President’s plan. Eligible workers would get a guaranteed minimum benefit equal to at least 125% of the federal poverty level. Those who have received benefits for at least 20 years would receive a 5% increase. Widows and widowers could get approximately 20% more a month.

    The Thrifty Cosmetologist will keep you updated on the measures proposed by the Biden administration. In the meantime, focus on making the most of your hard-earned dollars by saving 10% of every earnings deposit you make to your accounts. I do it automatically.

    Carlos Valenzuela is a hairdresser, writer, success coach, ex-salon & beauty school owner. Author of The Thrifty Cosmetologist, a simple video- based approach to money smarts tailored to salon pros, and Letters to Young Carlos a novella about a gay boy growing up along the border in the 1960s–to read excerpts, go here.

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