The stimulus was the biggest middle-class tax cut in history

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.

In addition, "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. The White House press office released this fact sheet with much more detailed information 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.

Tags: stimulus, stimulus bill, American Recovery and Reinvestment Act, tax cuts, Barack Obama, Taxes, arra (all tags)

Comments

6 Comments

I will give this another shot

My view of the current Republican attitude. I read this and thought it really fitting:

http://gallery.kitmaker.net/data/500/Peanuts_4-11-10.jpg

Again, apologies and a tip o' the hat to the late Charles Schultz.

by Hammer1001 2010-04-14 09:26PM | 0 recs
What was missing....

....was a jobs component from the stimulus.  Instead of all that pork, we could have had that.  The stimulus has been a success, but would have been even better, and without all the pusturing we're having now on unemployment extensions (What was Sen. Leahy thinking today?)

Just my two cents.

by esconded 2010-04-14 11:19PM | 0 recs
RE: What was missing....

There were some job-creating elements, but there was no coherent strategy. For instance, $70 billion was spent on fixing the alternative minimum tax--what if we had put $70 billion into high-speed rail projects? There was tremendous demand for the $8 billion the stimulus did allocate for high-speed rail.

by desmoinesdem 2010-04-14 11:49PM | 0 recs
RE: What was missing....

Not to mention the 'amt fix' was not a stimulus, it's something that happens regardless of the economic conditions. The stimulus was not a stimulus at all, instead it was a simple emergency stop-gap bill.

by vecky 2010-04-15 12:41AM | 0 recs
RE: What was missing....

Although you could argue that I am biased, in that my 60 week tenure on unemployment is coming to a close thanks indirectly to the ARRA, $42 billion of the stimulus was directed towards Federal civil works projects.

It is estimated that for every $1 billion spent on civil works projects, 35,000 jobs are created. That's about 1.5 million jobs. The down side? It was only 5% of the stimulus. An additional $80 billion (demoinesdem suggested) would hire an estimated 3.0 million additional workers, slashing unemployment from the present 9.7% to a theoretical 7.8%.

I was terribly upset that transit was short-changed on a Federal level. I agree with demoinesdem that just a little more in specific places could have created a tangible achievement.

But the big grey area of the stimulus is the additional $211 billion in aid to states (an extra 20%). Most infrastructure projects are carried out on a state level. If a state receives help in area A, it can spend on area B. And that is actually how I ended up getting hired.

by NoFortunateSon 2010-04-15 12:51AM | 0 recs
RE: What was missing....

I totally agree. It was a missed opportunity. LaHood has very good intentions on transportation policy, and would have made sure extra funds for transit were used wisely.

The state fiscal aid was extremely important for saving and creating jobs. Many economists felt that part of the stimulus bill should have been larger, and that Congress should have passed a new bill late last year with more aid targeted to state and local governments. Representative George Miller's new House bill would do this, but I doubt the Senate will pass that this year, unfortunately.

by desmoinesdem 2010-04-15 07:26AM | 0 recs

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