Details of Stimulus Plan

The most effective economic stabilization provision of the bill was eliminated in the House-Senate conference. The $15,000 tax credit for any buyer of a home regardless of income or first time home buyer status has been replaced with an $8,000 credit for first time home buyers only. This credit expires at the end of this year. It is also limited by income: $75,000 single, $150,000 married.

The economy will not begin to heal until the housing decline is arrested. If the goal of this spending package is to revive the economy, why limit the credit to first time home buyers and have income limitations? People who have more money will be able to: A. Buy more expensive homes (the ones that are mostly being foreclosed) B. Qualify for a larger mortgage C. Have more incentive to invest in housing since their tax braket is higher.

The fact that this housing market stabilazation credit has been eliminated proves to me that this is just a 70's style entitlement porkfest.

The increase in the Earned Income Credit and the refundable child tax credit is purely an expansion of welfare. These are payments to people who don't pay any taxes since their income is too low. In addition to a full refund of any taxes witheld, thousands of additional dollars are paid in most cases, a classic liberal wealth transfer-Lou

Here are some of the highlights of the stimulus bill just passed by Congress:


FOR WORKERS, CONSUMERS AND RETIREES

* Creates a "making work pay" refundable tax credit championed by President Barack Obama of up to $400 per individual and $800 for a couple in 2009 and 2010. It is calculated at a rate of 6.2 percent of earned income and is phased out for individuals with adjusted incomes over $75,000 and couples with incomes over $150,000.

* Provides a one-time payment of $250 to Social Security beneficiaries, railroad retirees and veterans receiving benefits from the Veterans Affairs department. State government retirees not eligible for Social Security would also get the $250 payment.

* Increases the earned income tax credit for low-income workers with
three or more children.

* Expands eligibility for the refundable child tax credit to more low-income workers. The bill reduces the income floor to $3,000 in 2009 and 2010 from the current floor of $8,500.

* Provides a new $2,500 tax credit for college education expenses. The credit phases out for individuals earning more than $80,000 and couples with incomes over $160,000.

* Provides an $8,000 tax credit for first-time home buyers for homes purchased between Jan. 1 and Dec. 1, 2009. The tax credit phases out for individuals earning more than $75,000 and couples earning more than $150,000.

* Provides temporary relief from the alternative minimum tax for millions of middle-class taxpayers who otherwise would be ensnared by the tax originally meant for the very wealthy.