President Obama is expected to sign the new stimulus package to help in the economic recovery of the United States of America. While waiting in anticipation of him signing this new plan, I have been trying to research as to how this package will effect me. I feel that I am a good representation of the "Middle Class" that Obama has referred to so I was very hopeful that the Stimulus package would be very beneficial to me.
On the contrary, according to the information I have read, it seems like there will not be much included in this stimulus package that will be directly applicable to me. From what I saw, below are a few highlights as to some of the applicable points of the stimulus:
New tax credit
•About $115 billion for $400 per-worker, $800 per-couple tax credits in 2009 and 2010. Credit phases out for individuals with adjusted gross incomes of $75,000 to $90,000 and couples with AGI of $150,000 to $190,000.
From my understanding, this change goes into effect starting in June. We are due to start seeing $13/week extra in our paychecks which will reduce the overall money taken out of our checks due to federal payroll taxes. I am not sure how much this will allow me to help stimulate the economy, but at least I can have enough money to buy a lunch or dinner each week (which could help).
http://www.usatoday.com/money/economy/2009-02-12-stimulus-plan-breakdown_N.htm?loc=interstitialskip
Auto sales
•$2.5 billion to make sales tax paid on new car purchases tax deductible.
Outside of the these two provisions, I do not really know what else is going to be applicable to me to help stimulate the economy. However, I do trust the vision of the leadership and hope that they understand how this will bring the economy around. I am very hopeful that the other provisions will indirectly affect me and allow us to turn our economic situation around.
Below is the source of the information provided in this log.
Please let me know your thoughts on the economic stimulus package below. Stay Disciplined!
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3 comments:
I wish I could share your trust in the vision of the leadership who is pushing this bill through. A bill which is over 1,000 pages, voted on by people who have not read most (or any) of it cannot really be a good thing. We are spending close to 1 trillion dollars on a plan which the Congressional Budget Office states will ultimately decrease our overall GDP. There are some good things in the package which will ultimately help our economy (like the extra grant money available for people to go to college), but I believe we are being short-changed by this bill in that it is not as focused it the use of money as it should be.
There are two big advantages of handling the tax credit as a withholding adjustment instead of as a direct payment:
1) Less governmental overhead - Last year's credit was dispensed directly from the IRS to anyone who had filed a 2007 tax return. This was no small undertaking, as it required that the IRS review everyone's 2007 return and mail them an individual check. It makes sense to transfer some of this responsibility to employers, since they're already accustomed to withholding pay and issuing paychecks. In the event that someone does not receive the appropriate reduction in withholding, they can still collect their credit on next year's taxes.
2) Targeted stimulus - The hope professed last year was that people would use the stimulus payment to help with a down payment on a car or house, or to buy a new TV, or the like. Instead, a tremendous amount of the money reportedly went directly into people's savings accounts. While this makes sense for the average consumer looking to stay afloat during hard times, it also defeats the purpose of the stimulus. By dividing the stimulus into smaller chunks, it may encourage people to spend it directly instead of saving it, which is what the government is hoping for.
Also, check out http://www.stimuluswatch.org/ for a list of programs which may or may not be funded with the stimulus bill.
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