Body temperature and the stimulus/jobs package

Ninety eight point six?  Body temperature?  Yes: it is also the percentage  – 98.6  – of working tax filers who are impacted positively by tax cuts in the stimulus package.

From “the tax reductions in the stimulus – which collectively made up $288 billion, or about 37 percent of the package. Most of those tax cuts are targeted at individuals. And while the they aren’t terribly deep, they are impressively broad.

The broadest tax cut in the stimulus package is the “Making Work Pay” tax credit, worth about $116.2 billion (see the Urban Brookings Tax Policy Center for this and other figures) and applicable to the vast majority of working Americans. Indeed, all single filers making less than $95,000 and all joint filers making less than $190,000 are eligible for this tax cut. Most of them, in fact, are already receiving it in the form of lower withholding on their paychecks.The well-to-do are benefiting too – or at least they will once it comes time to file their taxes next April. That’s because, as part of the stimulus, the government extended the alternative minimum tax (AMT) “patch”, which reduces the tax burden for some 24-26 million Americans who would be subject to the AMT. Most people who would be hit by the AMT are doing pretty well. The median income among people who would be subject to the AMT is about $130,000, and the average is about $165,000. This has the convenient property, though, of starting to kick in right where the “Making Work Pay” credit phases out, meaning that a great number of Americans who won’t benefit from former program will benefit from the latter one.

Finally, there are a number of smaller tax rebates and credits that are more highly targeted – to buyers of new cars and new homes, to small businesses, to low-income families with children, to the unemployed, and so forth. We’ll focus principally on one of these, which is the credit for new car purchases. ..  The automobile purchase credit operates by allowing taxpayers who buy new vehicles to deduct state and local sales taxes from the amount they owe to the IRS – something they ordinarily can’t do.”


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