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Stimulus Bill Tax Relief
WHAT IS CONGRESS DOING TO CUT TAXES AND RECOVER FROM THE RECESSION?
“Federal taxes are very considerably lower by every measure since Obama became president.”
- Bruce Bartlett, Domestic Policy Advisor to President Ronald Reagan.
In total, Congress has enacted more than $800 billion in tax cuts, with another $285 billion making their way through Congress. Recently passed health care reform legislation contained $40 billion in tax credits for 4 million small businesses to offer health care coverage to their employees. Additionally, more than one-third of the Recovery Act, which has created or saved thousands of jobs in our community, was made up of tax cuts. Much of this tax relief is immediate with more than half of them already in the hands of our families and businesses.
The Recovery Act contains 25 different tax cuts for Americans, including the Making Work Pay Tax Cut. Included in this list were incentives to spur economic development by encouraging Americans to buy a home, purchase a car, or send a child to college. These tax cuts have resulted in tax refunds increasing by an average of 10 percent, pushing the average refund up to a record $3,000 per taxpayer.
Over the past year, Congress has enacted job-creating tax incentives to spur hiring of unemployed Americans, strengthen small businesses with tax cuts, and make the purchase of quality insurance more affordable. I believe these targeted tax cuts are the right way to pull ourselves out of the recession and put Upstate New Yorkers who are currently between jobs back to work.
Tax Cuts for American Families ($232 billion over 10 years):
Making Work Pay Tax Cut: Provides immediate and sustained tax relief to about 95 percent of American workers and their families through the Making Work Pay tax credit, a refundable tax credit of up to $400 per worker ($800 per couple filing jointly), phasing out completely at $190,000 for couples filing jointly and $95,000 for single filers in 2009 and 2010. The credit provides over 110 million working families—about 95%—the tax relief they need right now and is being distributed largely by reducing tax withholding from workers’ paychecks beginning April 1, 2009.
Child Tax Credit: Cuts taxes for the families of more than 16 million children through an expansion of the child tax credit. This provides a new tax cut for more than 6 million children, and increases the existing credit for more than 10 million children.
Earned Income Tax Credit: Expands the Earned Income Tax Credit by providing tax relief to families with three or more children and increasing marriage penalty relief.
American Opportunity College Tax Credit: Helps more than 4 million additional students attend college with a new, $2,500 tax credit for families, which is partially refundable. As a result, the nearly one-fifth of high school seniors who currently receive no tax credit will receive a tax cut to make college affordable for the first time. These tax credits phase out completely at $90,000 for individuals and $180,000 for couples filing jointly.
Alternative Minimum Tax Relief: Protects 26 million middle-class families from being hit by the alternative minimum tax.
First-Time Homebuyers: Strengthens the housing market by enhancing the current first-time homebuyer tax credit by increasing it to $8,000 (up from $7,500) and by removing the repayment requirement. This tax credit has been credited with bringing greater stability to the housing market.
Incentives to Buy New Cars: Provides a tax deduction for state and local sales taxes and excise taxes paid on the purchase of new cars, including light trucks and motor homes.
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