A Much Needed Boost for the Economy
By Congressman Henry Cuellar
In a couple of months, many Americans will be relieved to find a much-needed check in their mailboxes compliments of the U.S. federal government. This rebate comes when most Americans are facing severe financial troubles. Family incomes and home prices are down while health care, energy, food, education costs, and mortgage foreclosures have climbed. The hardworking people of America deserve better, and Congress has taken timely, targeted action.
In our bipartisan effort to provide tax relief for working Americans, Congress passed The Recovery Rebates and Economic Stimulus for the American People Act. We hope it will inject confidence and consumer demand into the economy, promote economic growth, and create 500,000 jobs by the end of the year.
Hundreds of dollars will be put into the hands of more than 130 million American families, including seniors and disabled veterans, who will spend it immediately to reinvigorate the economy. The plan will provide up to $600 per individual and $1,200 per married couple, plus an additional $300 per child. The measure provides $32 billion in tax relief for 35 million families who work but make too little to pay income taxes.
Many of you have contacted my office to find out if you are eligible. Generally, you are eligible if you file your 2007 income tax return reporting tax liability or have earned income, social security income, or disabled veterans’ benefits of more than $3,000. If you are claimed as a dependent on someone else’s return, such as your parents, you are not eligible. The credit phases out for those taxpayers with an adjusted gross income of $75,000 ($150,000 for a joint return) or more, generally at a rate of $50 dollars per $1,000 of adjusted gross income above $75,000 ($150,000 for a joint return).
In addition to the rebate, the package addresses the mortgage crisis to save thousands of people across America from losing their homes. This bill increases the FHA loan limits up to $729,750 to expand affordable mortgage loan opportunities for families at risk of foreclosure.
The plan also encourages business investment, a vital component to reinvigorating our economy. The plan doubles the amount small businesses can immediately write off their taxes for capital investments made in 2008 from $125,000 to $250,000, for purchases of new equipment up to $800,000. The Bonus Depreciation will provide immediate tax relief for all businesses to invest in new plants and equipment by speeding up depreciation provisions, so that firms can write off an additional 50 percent for investments purchased in 2008.
I am pleased Congress was able to include as many individual groups of people for the rebates, and I commend my colleagues in the House and Senate for putting aside partisan politics and doing what’s best for the people we represent.