I was disappointed by some compromises made to pass the stimulus (the American Recovery and Reinvestment Act) in February 2009. I felt President Obama made too many concessions in the fruitless pursuit of Republican votes, and that too much of the cost went toward tax cuts that would be slower-acting and less stimulative than certain forms of government spending.
That said, the tax cuts in the stimulus will help tens of millions of American families, particularly those with working-class or middle-class incomes. Citizens for Tax Justice has calculated that "the major tax cuts enacted in the 2009 economic stimulus bill actually reduced federal income taxes for tax year 2009 for 98 percent of all working families and individuals. "
In terms of the number of Americans who benefited, the stimulus bill was the biggest tax cut in history. That is, "the estimated $282 billion in tax cuts [from the stimulus] over two years is more than either of the 2001-2002 or the 2004-2005 Bush tax cuts or the Kennedy or Reagan tax cuts." George W. Bush's tax cuts were more costly to the U.S. Treasury over a 10-year period, but as Anonymous Liberal noted last year,
The Bush tax cuts were skewed dramatically toward the wealthy. In 2004, 60% of the tax cuts went to the top 20 percent of income earners with over 25% going to the top 1% of income earners. Those numbers have increased since then as the cuts to the estate tax have taken effect.
Tomorrow is the deadline for most Americans to file their tax returns, and Republicans will try to harness the tea party movement's anger at what they view as excessive taxes and spending. However, many ordinary people may be shocked to learn how large their refunds are this year. According to the White House, "the average tax refund is up nearly 10 percent this year."
Democrats should not be afraid to vigorously defend the stimulus bill during this year's Congressional campaigns. I wish the recovery act had been larger and better targeted, but the bottom line is that Republicans voted against the largest ever middle-class tax cut.
The White House website has this Recovery Act Tax Savings Tool to help people find benefits to which they are entitled. After the jump I've posted a fact sheet on this subject, which the White House press office released on April 12. Note: if you have already filed your taxes, you can amend them after April 15 to collect on any credits from the stimulus bill that you missed.
FOR IMMEDIATE RELEASE
April 12, 2010
FACT SHEET: RECOVERY ACT TAX SAVINGS FOR AMERICAN FAMILIES
WASHINGTON - With Tax Day approaching, huge numbers of American families are taking advantage of important tax savings made available through the American Recovery and Reinvestment Act. See below for some examples of these critical tax savings. On Saturday, during his weekly address, President Barack Obama spoke to the American people about how to take advantage of Recovery Act tax benefits ahead of Tax Day - April 15, 2010. Largely due to the Recovery Act, the average tax refund is up nearly 10 percent this year. One-third of the Recovery Act was made up of tax cuts - tax cuts that have already provided more than $160 billion in relief for families and businesses, and nearly $100 billion of that directly into the pockets of working Americans. To help taxpayers see for themselves exactly how they can benefit from Recovery Act tax credits and collect every dollar owed when they file this tax season, the White House launched a new interactive Tax Savings Tool available at www.WhiteHouse.gov/Recovery. The full audio of the address is HERE or click HERE for the text of the address and more information. The video can be viewed online HERE.
Tax Savings - By the Numbers
$160 Billion - Tax relief provided through the Recovery Act so far to families and businesses.
Nearly $100 Billion - Tax relief provided through the Recovery Act so far that has gone directly in the pockets of working families.
Nearly $3,000 - The record average tax refund taxpayers are seeing this tax season.
Nearly 10% - The percentage average tax refunds are up this year - something the IRS says is largely due to Recovery Act tax credits.
36% - The percentage of taxpayers that have not yet filed their federal income tax returns and should be aware of the Recovery Act tax credits they may be eligible for.
64% - The percentage of taxpayers who have already filed their taxes, but can still amend them after April 15th to collect on any Recovery Act credits they may have missed.
95% - The percentage of working families benefiting from the Recovery Act's Making Work Pay tax credit, making it the broadest tax credit in the history of the country.
$800 - The amount most married couples are collecting through their paychecks this year thanks to the Recovery Act's Making Work Pay tax credit. Individuals collected $400 this year thanks to Making Work Pay.
Up to $2,500 - The expanded amount eligible taxpayers can collect with the American Opportunity Credit to help cover college expanses thanks to the Recovery Act.
Up to $8,000 - The amount new homebuyers can collect this year for purchasing their first home thanks to the Recovery Act's expansion of the First-Time Homebuyers Tax Credit.
Up to $1,500 - The amount homeowners can collect this year on improvements made to their homes like energy-efficient windows, doors and insulation thanks to Recovery Act tax credits.
$2,400 - The amount of 2009 unemployment benefits that taxpayers do NOT have to pay taxes on this year thanks to the Recovery Act.
Over $600 - The increase in Earned Income Tax Credit a single parent of three children making $15,700 in 2009 would collect this year thanks to the Recovery Act.
65% - The amount by which the Recovery Act cut the cost of COBRA health insurance premiums for unemployed workers last year through an up-front tax credit.
700,000 - The number of new homeowners who qualified for the First-Time Homebuyers Tax Credit through the Recovery Act in 2009.
120,000 - The number of times taxpayers have used the WhiteHouse.gov Tax Savings Tool to determine which Recovery Act tax credits they are owed -and how to collect on them.
There was a new Schedule M this year, and it saved me a lot of money. Does anyone know if that was part of the Recovery Act?
yes, it was
but apparently it has caused confusion for a lot of people.