Record Of Special Events: It’s Not Just About the $400 Tax Credit

Monday, February 16, 2009

It’s Not Just About the $400 Tax Credit

When talking about the 790 billion dollar stimulus bill currently nearing the end of its congressional marathon, it’s tempting for people to focus on the direct, short-term benefits, namely a $400 tax credit, and how such a thing won’t go very far in benefiting most people.

I tend to agree, but I’m also the first to admit that I’m no economist, in fact I’ve never studied macro-economics, and everything I know about personal finance I’ve learned by making mistakes. In my case, an $800 tax credit (married, filing jointly) would go toward paying down the $6,000 IRS bill we were surprised with in 2008.

That tax credit is just one part of the American Recovery and Reinvestment Act (AKA stimulus bill, AKA stimulus package, AKA spending bill, AKA “pork-filled liberal wish list”). For those of us who are already struggling in the post-toxic asset economy, here are some other highlights that should, even if indirectly, help make life a little easier:

$4 billion for job training

one-time $250 payments to Social Security recipients, poor people on Supplemental Security Income, and veterans receiving disability and pensions

my personal favorite: $7.2 billion to bring broadband Internet service to underserved areas

$24.7 billion to provide a 65 percent subsidy of health care insurance premiums for the unemployed under the COBRA program

$5 billion to weatherize modest-income homes

$11 billion toward a so-called “smart electricity grid” to reduce waste

$44.5 billion in aid to local school districts to prevent layoffs and cutbacks

$4 billion in grants to state and local law enforcement to hire officers and purchase equipment

About $70 billion to spare about 24 million taxpayers from being hit with the alternative minimum tax in 2009. The change would save a family of four an average of $2,300

About $14 billion to provide a $2,500 expanded tax credit for college tuition and related expenses for 2009 and 2010

$4.7 billion to expand the Earned Income Tax Credit for low-income families with three or more children

$6.6 billion to repeal a requirement that a $8,000 first-time home buyer tax credit be paid back over time for homes purchased from Jan. 1 to Nov. 30, unless the home is sold within three years

Those bullet points were pulled from this Associated Press story. Check out the whole list and see if anything else strikes your fancy. There are bound to be things in there you don’t agree with, but I’m personally proud of our Congress for managing a workable compromise in such a short amount of time.

It’s also important to pay attention to your state and local news to see how they’re planning on using the funds being offered. Try searching Google News for “stimulus bill” and your closest city.

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