The Obama Tax Cuts
The Obama Tax Cuts
January 5, 2009 - by Donny Shaw
The Wall Street Journal is reporting the details of the tax relief portion of Obama’s economic-stimulus package proposal:
>President-elect Barack Obama and congressional Democrats are crafting a plan to offer about $300 billion in tax cuts to individuals and businesses, a move aimed at attracting Republican support for an economic-stimulus package and prodding companies to create jobs.
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>The size of the proposed tax cuts – which would account for about 40% of a stimulus package that could reach $775 billion over two years – is greater than many on both sides of the aisle in Congress had anticipated, and may make it easier to win over Republicans who have stressed that any initiative should rely relatively heavily on tax cuts rather than spending.
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>The Obama tax-cut proposals, if enacted, could pack more punch in two years than either of President George W. Bush’s tax cuts did in their first two years. Mr. Bush’s 10-year, $1.35 trillion tax cut of 2001, considered the largest in history, contained $174 billion of cuts during its first two full years, according to Congress’s Joint Committee on Taxation. The second-largest tax cut – the 10-year, $350 billion package engineered by Mr. Bush’s in 2003 – contained $231 billion in 2004 and 2005.
The bulk of the tax cuts in the bill would be aimed at the low end of the income scale and would be capped at $200,000 or so. This is basically Obama’s “Making Work Pay” credit proposal from the campaign – a tax credit of up to $500 per person, or $1,000 per couple, including those that make too little to pay income taxes. There’s also a smattering of business tax credits, including the ability for companies to apply last year’s losses against previous years’ liabilities, and some mechanism for lowering or eliminating taxes on new equipment investments.
A lot of this is still in the works, and we’ll have to see some actual legislation before we begin pulling out the little devils. Also, if the goal here is to attract Republican support, using 40 percent of the stimulus for tax cuts seems a bit like overkill, considering that Democrats will have nearly 60 percent of the voting share in Congress. After all, Senate Minority Leader Mitch McConnell (R-KY) has already said that he expects Senate Republicans to back the stimulus package as long as the Democrats “pursue a fair process…and give both sides an opportunity to have input.” Congress gets final say on what’s in the stimulus package, so it seems possible that with such a strong Democratic majority this tax section could get tweaked a bit to free up more money for things like food stamps, unemployment insurance and infrastructure projects.
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I'm left wondering how this $1000 per couple tax relief will do what the Bush administration's $1200 economic incentive checks didn't. When exactly would we see this extra income? Would it be in the form of a larger return check in '09 against our '08 tax return or would it be in a slightly larger take home pay throughout '09 due to lowered tax tables? I think the key is to make these incentives sustainable. Do not give to us on one hand and take away on the other. If providing this federal tax relief only means that I will be paying more in state property and school tax and that sales taxes would rise as a result of reduced federal aide then I would say that smoke and mirrors should be left to magic shows and not be included in an economic solution at such a dire time. When tax cuts are being proposed, the source should be explained. What will we lose and or who will be making up the difference?
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2009 is year for President-elect Barack Obama and as our new leader he is devising a plan to bring you extra cash on payday so you won't need a payday loan. He is proposing a tax cut which he calls “Making Work Pay.” This will create a new tax credit of up to $500 per person or $1,000 per working family. Along with the economic stimulus and job-creation package he is formulating, he hopes this new, but different strategy will stimulate the economy and reduce the need for a payday loan. It’s impossible to tell what tomorrow will bring; hopefully this plan will restore consumer confidence as well as the economy in general. Hopefully soon, our checks on payday will flourish with that extra cash we all are anticipating so you won't need to take out a <a title="READ Obama Aims to Boost Your Payday" rev="vote-for" href="http://personalmoneystore.com/moneyblog/2008/12/30/obama-aims-to-boost-your-payday/">payday loan</a>.
As President Elect Obama prepares to take office, he wants to make a better change in the ailing economy that’s why he proposed an economic stimulus package. And it includes tax cuts. The stimulus plan could be a great help to the ailing economy but do you think it is for a long term or a long period of time? People still need the help of payday loan. Aside from that an immediate action is needed because the pay cuts to the employees are still discussing to prevent lay offs. But employees are keep on complaining on this pay cuts because the price of goods in the market is still on the rise. And if they accept this, they also accept the difficulty in budgeting. That’s why people are resorting to some creative ways of job hunting. People are also taking jobs that pay significantly less than what they were earning before. If you want to read more stories about job seekers, visit your <a title="READ Pay Cuts and Payday Loans" rev="vote-for" href="http://personalmoneystore.com/moneyblog/2009/01/15/pay-cuts-and-payday-loans/">payday loan</a> source.
I think the package is full of pork. Just give the money directly to the
people if you want to spend it. Or give it to each state and let them create work. To many pet projects in congress. Lets not rush this package. I am dissapointed. A concerned American........ VIRGINIA
I think the package is full of pork. Just give the money directly to the
people if you want to spend it. Or give it to each state and let them create work. To many pet projects in congress. Lets not rush this package. I am dissapointed. A concerned American........ VIRGINIA
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