House Democrats unveiled $275 billion in tax relief Thursday as part of a far-reaching economic stimulus proposal. A key element is a refundable tax credit of $500 per worker or $1,000 per couple. The credit phases out for couples earning $200,000 or more a year. Democrats say 95 percent of U.S. workers would benefit.
Here are other highlights of the proposed tax measures as described in a press release by Rep. Charles Rangel of New York, chairman of the tax-writing House Ways and Means Committee:
Chairman Rangel Outlines Economic Recovery Package
Bill would provide critical tax, health, job training benefits for
families, incentives to create jobs
WASHINGTON, D.C. - Ways and Means Committee Chairman Charles B. Rangel(D-NY) today released details of the economic recovery package fallingunder the jurisdiction of the Committee. This groundbreaking plan willprovide critical tax, health and job-training benefits to Americanfamilies, incentives for businesses to grow and create jobs andassistance for those who have lost their jobs or are economically disadvantaged.
"The critical state of our economy calls for swift, comprehensive actionand this package will provide relief to all communities and all sectorsof the American economy," said Chairman Charles B. Rangel (D-NY). "Thisrecovery package will provide tremendous tax relief, health care and jobtraining benefits for families struggling to make ends meet, while alsogiving businesses the boost they need to create new jobs. We have alsodesigned specific provisions to help State and local governments fundcritical infrastructure projects to improve our roads, schools, bridgesand airports, while also maintaining and creating good-paying jobs forworking families. This package was developed with strong coordination between the House and Senate leaders, President-elect Obama and hiseconomic team. I look forward to working with all parties involvedtoward a swift passage."
The Recovery legislation will be formally introduced in the coming days,and is expected to receive consideration in the Ways and Means Committee next week.
An outline of the provisions under the Ways and Means Committee'sJurisdiction included in the Economic Recovery package follows:
Tax Relief for Individuals
- "Making Work Pay Credit"
- Expand Earned Income Tax Credit (EITC)
- Increase in child tax credit, $0 floor Education
- Simplification of education credits w/ $2,500 credit for firstfour years of higher education expenses (increase income limitations),with credit partially-refundable (40% refundable) Housing
- Remove repayment requirement on $7,500 first-time home buyercredit for homes purchased after 2008 and before termination of credit(June 30, 2009)
- Coordination provisions with new grant program for low-incomehousing being designed by the Financial Services Committee Business
- Bonus depreciation
- 5-year carryback of net operating losses (excluding companiesreceiving TARP benefits, Fannie Mae, Freddie Mac)
- Extension of increased small business expensing
- Expand work opportunity tax credit for disconnected youth andunemployed, recently-discharged veterans
- Prospectively repeal Treasury Section 382 ruling State and Local Governments
- Allow financial institutions to purchase State and local bondsand other changes
- Repeal AMT limits on new private activity bonds
- Taxable bond option for governmental bonds
- School construction bonds
- One year deferral of withholding tax on government contractors Distressed Areas
- Provide tax exempt bonds and tax credit bonds to "recoveryzones." These tax exempt bonds and tax credit bonds can be used for awide array of purposes to stimulate economic development, including jobtraining and education. A "recovery zone" would be an area within aState, city or county that has exhibited high unemployment, foreclosuresor poverty. These bonds would be allocated automatically to States andlarge municipal governments based on the number of unemployedindividuals within that area. Energy Tax Incentives
- Long-term extension of renewable energy production tax credit
- Temporary election to claim the investment tax credit in lieu ofthe production tax credit
- Coordination provisions with new grant program for renewableenergy projects being designed by the Energy and Commerce Committee(sections 45 and 48 projects)
- Clean Renewable Energy Bonds ("CREBs")
- Qualified Energy Conservation Bonds
- Energy efficiency and conservation tax incentives under sections25C, 25D and 48
- Smart energy conservation, energy efficiency, and renewableenergy R&D credit
- Refueling property credit expansionsTrade Adjustment Assistance (TAA)
- Updates, modernizes and expands TAA to cover service workers,and substantially improves and extends coverage to manufacturing workers
- Triples funds for job trainingUnemployment Insurance (UI)
- Encourage UI Modernization
- Continue the Emergency Unemployment Compensation Program
- Increase UI checks by $25/week Additional Temporary Assistance for Needy Families (TANF)
- Provide additional TANF Contingency Funds to serve needyfamilies Supplemental Security Income (SSI)
- Provide a one-time additional SSI Payment to Low-Income elderlyand disabled recipients Child Support Enforcement Funding
- Restore federal funding for Child Support Enforcement for 2years COBRA Healthcare for the Unemployed
- Provides temporary subsidies for health insurance coverage tothose who have lost their jobs.
- Extends the availability of unsubsidized COBRA coverage forolder and tenured workers beyond the 18 months provided under currentlaw Health Information Technology (HIT)
- Establishes standards, payment incentives and privacyprotections to encourage the widespread adoption of health informationtechnology.Extends Moratorium on Selected Medicare Regulations through October 1,2009