Obama’s $787 Billion Economic Stimulus Plan: The Least You Need To Know
2009 February 18
President Obama signed a modified economic stimulus bill into law yesterday, a plan with a $787 billion price tag. The purpose of this article isn’t to debate the merits of the stimulus plan, however, but to examine what the average taxpayer can expect to get out of it. The direct benefits to consumers mostly comes under a single heading: tax cuts.
New Tax Cuts
- “Make Work Pay” Tax Credit – Single workers with an adjusted gross income (AGI) below $75,000 are eligible for a $400 tax credit, which is a dollar for dollar reduction in tax owed to the IRS (as opposed to a tax deduction, which merely reduces taxable income). The delivery-method of choice for this rebate is to simply add it back to workers’ regular paychecks little by little over the course of the year. Married workers with an AGI below $150,000 are eligible for a tax credit of up to $800.
- Mass Transit Tax Breaks – Users of mass transit can now pay for up to $230 worth of transit passes with pre-tax dollars, up from $120.
- Expanded Child Tax Credit – The lower income limit to become eligible for the $1,000 per child tax credit is now $3,000 instead of the former $8,500.
- Early Release of AMT Exemption Amounts – The exact amount of the AMT exemption is traditionally left to the last minute, but this year the numbers are being released early: $70,950 for married-filing-jointly taxpayers and $46,600 for single and head-of-household filers. No, this won’t actually lower your taxes, but at least you can plan a bit.
- $8,000 First-Time Home-buyer Tax Credit – Although less generous than the proposed $15,000 tax credit, $8,000 is nothing to sneeze at. First-time home buyers purchasing a first home between January 1st and December 1st, 2009 are eligible. The tax credit begins to phase out at an AGI of $75,000 for single home buyers and $150,000 for married-filing-jointly couples.
- The First $2,400 of Unemployment Benefits Are Tax Free – Unemployed people may also qualify for subsidized health insurance through COBRA.
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the spending in this bill is outrageous! where is 787 BILLION dollars going to come from when our country is already billions of dollars in debt? There’s two ways the government is going to come up with the money: print more money, making the value of our money decrease; or TAX. yes tax, but not people like “you”.. just the people who earn “enough.” As if the government hasn’t expanded enough, be prepared for BIG government. Every little thing the government spends money on, it regulates. Say buh-bye to free market and hellllooo to socialism!