Friday, January 25, 2008
President Bush and House leaders agreed yesterday on $146.3 billion in tax cuts intended to stimulate the economy. More than $100 billion is in the form of tax rebate checks of up to $600 for individuals or $1,200 for couples, and the remainder of the tax cuts are aimed at encouraging businesses to increase their investments in new equipment by the end of 2008. Here are some details from the White House Fact Sheet:
- The agreement reached today would allow Americans to keep more of their money to stimulate consumer spending. The growth plan provides approximately $100 billion in temporary relief that will allow Americans to keep or spend more of their incomes. Under the agreement:
- In 2008, taxes would be cut from 10 percent to zero percent on the first $6,000 dollars of taxable income for individual taxpayers and the first $12,000 of taxable income for couples. Taxpayers could receive rebates of up to $600 for individuals and $1,200 for couples. A minimum of $300 per person and $600 per couple would be available to those with at least $3,000 of earned income. This relief would be available to everyone with adjusted gross income less than $75,000 for singles and $150,000 for married couples filing jointly. It will be phased out for taxpayers above those income thresholds.
- Everyone eligible for this relief would also receive an additional $300 per child. For example, this would mean up to $1,800 of tax relief for an eligible couple with two children.
- The agreement would also offer incentives to spur business investment. The agreement would save businesses approximately $50 billion in near-term taxes through a temporary change to the tax code that will allow American businesses that buy new equipment this year to deduct an additional 50 percent of the cost of their investment in 2008. This will encourage businesses to expand and create new jobs now because buying equipment, software, and tangible property this year will dramatically lower their taxes. The agreement also increases expensing for small businesses.
Press and blogosphere coverage:
- Angry Bear
- Associated Press
- Center on Budget & Policy Priorities
- Greg Mankiw's Blog
- Mauled Again
- New York Times
- Tax Foundation's Tax Policy Blog
- Tax Policy Center's TaxVox
- A Taxing Matter
- Wall Street Journal
- Washington Post