Economic rescue plan signed Tuesday
Stimulus to benefit taxpayers, consumers; is one part of attack against recession
Kevin G. Hall
Issue date: 2/19/09 Section: Nation and World
WASHINGTON - President Barack Obama signed into law Tuesday the largest government economic rescue plan in the nation's history; a $787 billion package of spending, tax cuts and tax credits that's designed to help pull the nation out of what's becoming the worst downturn since the Great Depression.
The American Recovery and Reinvestment Act includes everything from money to refurbish public housing to incentives for energy conservation. The 1,000-page plan aims to create and preserve jobs, and also to accelerate the transformation of key economic sectors.
While the plan provides some benefits directly to individuals, the main way it's intended to help Americans is to promote economic activity nationwide. The stimulus is but one part of a multi-front attack by the government against the recession.
Other parts include the mortgage-relief program that Obama will announce on Wednesday and the next phase of the bank bailout, to be announced soon. They're all intended to work together, along with efforts by the Federal Reserve to kick-start the economy. However, individuals will benefit most once the economy resumes growth rather than from the stimulus itself.
Here are some answers to questions about what the stimulus plan might mean to taxpayers and consumers.
Q: Will I get a tax rebate like last year?
A: No. Taxpayers won't receive checks this year. This plan involves a payroll tax cut, where employers will withhold less in taxes, meaning there will be a modest bump up in take-home pay until an income threshold is met. The cap is $400 for single filers and $800 for joint filers whose adjusted gross income falls below $75,000 and0 $150,000, respectively.
Q: What if I'm self-employed?
A: You must adjust your quarterly tax filings to capture this credit.
Q: I don't earn a lot. How else does the stimulus plan help me?
A: The stimulus plan includes a temporary expansion of the earned-income tax credit for families with three or more children, and it allows more low-income families to receive a refundable child tax credit this year and next. For recipients of food stamps, the dollar amount of this assistance will increase by 14 percent.
The American Recovery and Reinvestment Act includes everything from money to refurbish public housing to incentives for energy conservation. The 1,000-page plan aims to create and preserve jobs, and also to accelerate the transformation of key economic sectors.
While the plan provides some benefits directly to individuals, the main way it's intended to help Americans is to promote economic activity nationwide. The stimulus is but one part of a multi-front attack by the government against the recession.
Other parts include the mortgage-relief program that Obama will announce on Wednesday and the next phase of the bank bailout, to be announced soon. They're all intended to work together, along with efforts by the Federal Reserve to kick-start the economy. However, individuals will benefit most once the economy resumes growth rather than from the stimulus itself.
Here are some answers to questions about what the stimulus plan might mean to taxpayers and consumers.
Q: Will I get a tax rebate like last year?
A: No. Taxpayers won't receive checks this year. This plan involves a payroll tax cut, where employers will withhold less in taxes, meaning there will be a modest bump up in take-home pay until an income threshold is met. The cap is $400 for single filers and $800 for joint filers whose adjusted gross income falls below $75,000 and0 $150,000, respectively.
Q: What if I'm self-employed?
A: You must adjust your quarterly tax filings to capture this credit.
Q: I don't earn a lot. How else does the stimulus plan help me?
A: The stimulus plan includes a temporary expansion of the earned-income tax credit for families with three or more children, and it allows more low-income families to receive a refundable child tax credit this year and next. For recipients of food stamps, the dollar amount of this assistance will increase by 14 percent.
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