Tax+Cuts

= = = = = = = = = = = = = = = = = __**T****he Stimulus Package: Tax Cuts** __ =

CURRENT GRADE 9 OF 10. SEE QUESTIONS BELOW

What it is:
Wikipedia.com defines a tax cut as “a reduction in taxes. Economic stimulus via tax cuts, along with interest rate intervention and deficit spending, are one of the central  parts of Keynesian Economics." __Keynesian Economics__ believe in government spending programs to increase employment. Also, that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.  The following spending on tax cuts are designed to put more money in people’s pockets, which encourages them to go out and spend, spend, spend. This will fire up the economy quicker, increasing the gross domestic product (GDP).

$116.2 billion New tax credit for workers-The tax credit for workers will be 6.2 percent of earned income (after federal taxes are taken out), up to $400 for individuals and up to $800 for couples. People who have income levels of $75,000 or higher (individuals) and $150,000 or higher (married couples) will not receive this tax credit. $69.8 billion Extend patch for the alternative minimum tax. [The alternative minimum tax is a tax that applies to taxpayers who would pay little or no tax because of various deductions and tax credits. The alternative minimum tax is an additional tax based on the difference between a tax on the taxpayer's "alternative minimum taxable income" and the tax that would otherwise be imposed.] $14.8 billion Expand eligibility for Child Tax Credit. $13.9 billion Expand higher education tax credits. $6.6 billion Incentive for first-time home buyers. $4.7 billion Increase Earned Income Tax Credit. $2.0 billion Increase tax credits for residential energy efficiency improvements. $268 million Expand tax incentives for residential renewable energy properties. $192 million Equalize mass transit and parking benefits Equalize mass transit and parking benefits. __VEHICLES__ __INCOME TAXES __ __TELECOMMUNICATIONS __  __**Source: **__ http://projects.nytimes.com/44th_president/stimulus/tax-cuts-for-individuals From The New York Times. Published February 25, 2009. Although The New York Times has been attacked for having too liberal of a slant and having some gaffes with its journalist, in general, it has enjoyed a reputation of being a very credible newspaper for several years. "The //Times// enjoys the reputation of being a generally reliable source of news. The editorial position of the //Times// is often regarded as liberal in its interpretation of social issues and events. However, it does have a mix of editorial columnists, ranging in approximate political position from<span style="color: rgb(0,0,0); font-family: Arial,Helvetica,sans-serif;"> Maureen Down, Paul Krugman, and Bob Herbert on the left, to William Safire and David Brooks, formerly of the //Weekly Standard// magazine, on the right." <span class="wiki_link_ext">http://www.sourcewatch.org/index.php?title=New_York_Times <span style="color: rgb(255,0,0); font-family: 'Arial Black',Gadget,sans-serif;"><span style="color: rgb(0,0,0); font-family: Arial,Helvetica,sans-serif;"><span style="color: rgb(255,0,0);">**__<span style="color: rgb(0,128,128);">Source: __** <span class="wiki_link_ext">http://www.rockymountainnews.com/news/2009/jan/27/tax-cut-plan-hailed-assailed From The Colorado Rocky Mountain News. Published January 27, 2009 at 12:05 a.m. The Colorado Rocky Mountain News is overall a fairly well balanced and credible news paper. This article is a very credible choice because it has comments and viewpoints from both Democrats and Republicans. is often regarded as liberal in its interpretation of social issues and events. However, it does have a mix of editorial columnists, ranging in approximate political position from <span style="color: rgb(0,0,0);"> <span style="color: rgb(0,0,0); font-family: Arial,Helvetica,sans-serif;"><span class="wiki_link_ext"> <span style="font-family: Arial,Helvetica,sans-serif;">
 * <span style="font-family: Arial,Helvetica,sans-serif;">$2.0 billion Incentive for alternative vehicle. [Alternative Vehicles are vehicles that runs on a fuel other than "traditional" petroleum fuels (petrol or diesel); any method of powering an engine that does not involve solely petroleum (e.g. electric car, petrol-electric hybrid, solar powered)]
 * <span style="font-family: Arial,Helvetica,sans-serif;">$1.7 billion Incentive for car buyers.
 * <span style="font-family: Arial,Helvetica,sans-serif;">Registration, license, title would total $10 yearly per vehicle.
 * <span style="font-family: Arial,Helvetica,sans-serif;">Ownership taxes would decrease in "four equal yearly steps" to $2 for new vehicles and $1 for all others.
 * <span style="font-family: Arial,Helvetica,sans-serif;">All other state and local government charges - except fines, tolls, parking, seizure, inspection and new plate charges - would cease.
 * <span style="font-family: Arial,Helvetica,sans-serif;">2011 income taxes would be 4.5 percent, dropping 0.1 percent yearly until the rate is 3.5 percent, in each of the first 10 years that income tax revenue net growth exceeds 6 percent. (Winger question #5 - I don't understand here - where these percentages come from - these rates are too ow to be the actual tax rates)
 * <span style="font-family: Arial,Helvetica,sans-serif;">Income tax credits would cease.
 * <span style="font-family: Arial,Helvetica,sans-serif;">Alternative minimum tax would cease.
 * <span style="font-family: Arial,Helvetica,sans-serif;">Except for 911 fees, state/local taxes and fees would be eliminated on charges for telephone, pager, cable, TV, Internet, computer and satellite.

The following are costs and the break down of The Stimulus Package<span style="font-family: Arial,Helvetica,sans-serif;">. Even though The Stimulus Package may fire up the economy quicker, trillions of dollars are being put into it. <span style="font-family: Arial,Helvetica,sans-serif;"> <span style="color: rgb(0,128,128);"> <span style="color: rgb(255,0,0); font-family: 'Arial Black',Gadget,sans-serif;"><span style="color: rgb(0,128,128);">**<span style="color: rgb(0,0,0); font-family: Arial,Helvetica,sans-serif;">__<span style="color: rgb(0,128,128);">Source: __ ** <span style="color: rgb(0,0,0); font-family: Arial,Helvetica,sans-serif;"> http://www.thedigeratilife.com/blog/index.php/2009/02/12/2009-economic-stimulus-package-obama-stimulus-plan-money-tax-cuts-spending/<span style="font-family: Arial,Helvetica,sans-serif;"> From The Digerati Life Directory. © 2006-2008.
 * <span style="font-family: Arial,Helvetica,sans-serif;">$790 billion for the Obama administration’s stimulus bill.
 * <span style="font-family: Arial,Helvetica,sans-serif;">$700 billion for the Bush administration’s bailout plan.
 * <span style="font-family: Arial,Helvetica,sans-serif;">That’s almost $1,500,000,000,000 all together!
 * <span style="font-family: Arial,Helvetica,sans-serif;">Here’s how the package breaks down: 35% of the bill will be allocated to tax cuts while 65% will be for spending.
 * <span style="font-family: Arial,Helvetica,sans-serif;">The 35% of $790 billion is reserved for workers.
 * <span style="font-family: Arial,Helvetica,sans-serif;">The government is not giving away physical economic stimulus checks this time. Instead, they are giving a bunch of tax breaks, the main item being this one: a tax credit for workers.
 * <span style="font-family: Arial,Helvetica,sans-serif;">The tax credits are $400 for individuals and $800 for couples. You’ll only get full credit if you earn $70,000 or less per person.

<span style="color: rgb(255,0,0); font-family: 'Arial Black',Gadget,sans-serif;">
<span style="color: rgb(255,0,0); font-family: 'Arial Black',Gadget,sans-serif;"><span style="font-family: Arial,Helvetica,sans-serif;"><span style="color: rgb(0,0,0);">Tax cuts implemented in to the stimulus package are designed to allow the recipient to have a higher sense of financial security. When people have more money in their pockets, they are more likely to spend. More spending means higher profits for businesses, higher profits equals more spending and higher production to keep up with demands. The idea of a tax cut is to increase spending, and to ultimately increase production, resulting in a higher GDP (Gross Domestic Product). Barack Obama plans to offer about $300 billion of tax cuts to individuals and businesses. The size of the tax cuts could reach $775 billion over two years, and it is expected to have a big impact on the economy! <span style="font-family: 'Arial Black',Gadget,sans-serif;"> <span style="color: rgb(0,0,0);"> <span style="color: rgb(0,0,0); font-family: Arial,Helvetica,sans-serif;"><span class="wiki_link_ext">   <span style="font-family: Arial,Helvetica,sans-serif;"> From Yahoo News. Published Friday February 27 at 4:59 p.m. <span style="color: rgb(0,128,128);">**__Source:__** http://online.wsj.com/article/SB123111279694652423.html From The Wall Street Journal. Published January 5, 2009.
 * <span style="color: rgb(0,128,128);">__Source:__ ** <span class="wiki_link_ext">http://news.yahoo.com/s/ap/20090227/ap_on_go_co/obama_budget_taxes