The 2009 Economic Stimulus Package proposes approximately $825 billion to resuscitate the US economy. Of that amount, $275 billion is planned for tax relief and $550 billion in spending on new projects and infrastructure.
The idea behind an economic stimulus plan is that the government can boost the economy through both short-term and long-term strategy. President Obama’s short-term plan is to encourage consumers or businesses to spend on goods; the long term plan is to encourage businesses to grow through the creation of jobs and investments in infrastructure and research.
Tax cuts for individuals typically promote short-term spending, while tax cuts for businesses promote both spending and investment which results in job creation. Also, big spending on public works such as transportation fills the immediate need for jobs, and helps to build better cities. Just this week the NY Times reported that states such as Colorado, Maryland, and Kansas have already gotten the ball rolling on transportation projects that are funded by money from the stimulus package. These types of projects are estimated to create and save thousands of jobs over the next two years.
The biggest question about the 2009 stimulus package is, “Does this mean tax payers will receive checks like we did during the Bush administration?” Unfortunately not. There will be no standard checks issued to tax payers as we received in 2008. However, individuals will receive the benefit of a tax break which allows for a few extra dollars in the bank. In this plan, individuals with a maximum income of $75k will gain a $500 tax break. Additionally, couples with a household income below $150k will gain a $1000 tax break.
Here are some good news facts about the stimulus package from Cnn.com:
-Economic Advisors forecast an estimated 3.3 million jobs to be created over the two years as a result of the stimulus package
-Large expenditures from the package will go directly to states to fund needed areas such as:
$32 billion transportation projects, $41billion for grants to local school districts, $79 billion for state relief to prevent cuts in state aid, $39 billion toward subsidies to health care for the unemployed, $90 billion to assist states with Medicaid, $20 billion for renewable energy tax cuts/credit for research and development on energy related work , etc.
-Tax Cuts for Individuals:
$500 per worker, $1000 per couple for two years costing about $140 billion
Expansion of the earned-income tax credit to include families with three children
$2500 college tuition tax credit
Repeal of a requirement that a $7500 first time homebuyer tax be paid back
-Tax Cuts for Businesses:
An infusion of cash into money-losing companies by allowing them to claim tax credits on past profits dating back five years instead of two
Bonus depreciation for businesses investing in new plants and equipment
Doubling of the amount small businesses can write off for capital investments and new equipment purchases
Allowing businesses to claim a tax credit for hiring disconnected youth and veterans
The idea behind an economic stimulus plan is that the government can boost the economy through both short-term and long-term strategy. President Obama’s short-term plan is to encourage consumers or businesses to spend on goods; the long term plan is to encourage businesses to grow through the creation of jobs and investments in infrastructure and research.
Tax cuts for individuals typically promote short-term spending, while tax cuts for businesses promote both spending and investment which results in job creation. Also, big spending on public works such as transportation fills the immediate need for jobs, and helps to build better cities. Just this week the NY Times reported that states such as Colorado, Maryland, and Kansas have already gotten the ball rolling on transportation projects that are funded by money from the stimulus package. These types of projects are estimated to create and save thousands of jobs over the next two years.
The biggest question about the 2009 stimulus package is, “Does this mean tax payers will receive checks like we did during the Bush administration?” Unfortunately not. There will be no standard checks issued to tax payers as we received in 2008. However, individuals will receive the benefit of a tax break which allows for a few extra dollars in the bank. In this plan, individuals with a maximum income of $75k will gain a $500 tax break. Additionally, couples with a household income below $150k will gain a $1000 tax break.
Here are some good news facts about the stimulus package from Cnn.com:
-Economic Advisors forecast an estimated 3.3 million jobs to be created over the two years as a result of the stimulus package
-Large expenditures from the package will go directly to states to fund needed areas such as:
$32 billion transportation projects, $41billion for grants to local school districts, $79 billion for state relief to prevent cuts in state aid, $39 billion toward subsidies to health care for the unemployed, $90 billion to assist states with Medicaid, $20 billion for renewable energy tax cuts/credit for research and development on energy related work , etc.
-Tax Cuts for Individuals:
$500 per worker, $1000 per couple for two years costing about $140 billion
Expansion of the earned-income tax credit to include families with three children
$2500 college tuition tax credit
Repeal of a requirement that a $7500 first time homebuyer tax be paid back
-Tax Cuts for Businesses:
An infusion of cash into money-losing companies by allowing them to claim tax credits on past profits dating back five years instead of two
Bonus depreciation for businesses investing in new plants and equipment
Doubling of the amount small businesses can write off for capital investments and new equipment purchases
Allowing businesses to claim a tax credit for hiring disconnected youth and veterans
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