Economic Stimulus Tax Cut Package 2009

by Mike Holman

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President Obama has proposed an economic stimulus tax cut package for 2009 which contain about $275 billion  worth of tax cuts to individual tax payers as well as businesses.  The big question is – does this package contain a stimulus check in 2009? The idea behind this money is to promote  individual spending as well as business spending and job creation.  The large amount of the tax cuts is  partially due to the need to get Republican support for stimulus package.

Is there a stimulus check in 2009?

There will be a stimulus check in 2009 for selected groups – however there won’t be a blanket check for all taxpapers like there was in 2008.  However – the year isn’t over yet and the economy hasn’t recovered so don’t give up hope – the stimulus check could happen this year.

What is an economic stimulus package?

In 2008 the government sent out economic stimulus checks to 130 million Americans with the idea that this money  would be spent on consumer goods and services thereby stimulating the economy. Most economists think that this  program was not successful because too many people either saved their stimulus check or paid down debt.   Regardless, the economy has slowed down into a recession with the possibility of a depression which has increased the motivation for another stimulus package.

Individual tax cuts

Obama has proposed tax cuts of $1,000 for couples and $500 for individuals.  This would apply to individuals  with a maximum income of $75,000 and households with a maximum of $150,000 in income.  This is similar  to a stimulus check except you would receive this amount over time rather than all at once.  The idea  behind tax cuts for individuals is to promote spending which will increase economic activity.  More economic  activity is good for the economy and will help fight off the recession.

Business tax cuts

Here are some of the proposed business tax cuts:

  • Tax credit for companies that avoid layoffs or make new hires.  I would assume that if they have offsetting  layoffs and new hires they wouldn’t get any credits.
  • Allow companies to write off losses from 2008 and 2009 to retroactively reduce tax bills from the last 5 years.   Normally these companies would only be able to write off the losses on current or future tax bills.
  • The tax write offs would be effective from Jan 1,2009 so any expenditures since then could be included in the  tax loss.

Second economic stimulus check

At the moment Obama has not proposed a 2009 stimulus check like the one that was sent out in 2008.

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{ 35 comments… read them below or add one }

1 Gregory Wilson

I’m not happy at all with this stimulus package.your ideas will go for a fewWhy don’t we get the bulk of the stimulus. Let us spend it. Same old story, you don’t trust us. I think that a few will get money and the people won’t.

Gregory Wilson
Retired

2 Nadine Fahrlander

I hope that Congress will back this plan, and not nitpick it to death. We need concerted effort from statesmen. We do not need partisan bickering. The economic team has done the research, so lets put it into action!

3 Leo Leal

The stimulus package is full of fluff that does nothing for the economy and will only put this country further into debt. You can’t stimulate an economy by shutting down small businesses. And if you hand out stimulus checks people will never do the right thing with them. Put the money in education, our school systems are falling apart.

4 Alicia Bristow

Well the stimuls package passed in the House and we can only hope that the Senate votes against it. I have been researching what is in the package and am appalled at the “pork barrell” spending. Shame on you Congressmen and Congresswoman who have hidden agendas for your own gain. These pork barrell items, if people will check, have nothing to do with stimulating the economy. Wake up America!

5 Robert Webb

I see nothing in the tax package that Obama promised that retirees who receive less than 50,000 paying no income tax…I remember hearing him say this over and over..

6 DownriverDem

The Republicans did nothing to help the economy. The voters don’t trust Republicans when it comes to the economy. We have had 28 years to see if trickle down works. We now know it doesn’t work.

Let let the Dems have a chance.

7 dorothy leurquin

I have already told my boss to keep taking out the same taxes I do now.I can better use my money when I get a tax refund next year than getting $45.00 every two weeks.I do not make alot,and this way it is like a bank account,without interest ha ha ,and I can better use it then.

8 Eliza

I want to give the democrats a chance because Bush’s stimulus package has only given me, and a bunch of other people a cut in hours or no work at all. But when I look at the Obama’s stimulus plan he has$248 million for furniture at the new Homeland Security headquarters.
and A $246 million tax break for Hollywood movie producers to buy motion picture film. WHAT IS THAT! Are the democrats going to do any better or are they just as worse.

9 capalistpig

The only fair way to distribute benefits would be to exempt anyone who voted for a congressman (as in man kind) who did not vote for the stimulus bill!

10 S. Connor

I am not sure how the stimulus package will stimulate the country. Also, I am not sure how all the cuts in the package will affect the original plans. There is no unity in the congress, especially the cooperation of the republican party. If the Republicans trusted in all George Bush’s decision and voted on them, which has brought this Country to this level, well they should be willing to give President Obama a chance to see if this plan will work. It is not going to happen over night.

11 T. Long

If the government really wants the public to spend the money when they receive it, it should be more than $1000 or $500. People will be more likely to put that kind of money into savings rather than spend it and have to use part of their own money as well. What they should do is give a larger set of money to each person and have restrictions on it. For example, give everyone $10,000 and put a time limit on it to spend and also what they can spend it on. Such things could be automobiles, house/house payments, or anything else that helps stimulate the economy. The way I see it, its not just the people that are making out, the government is as well because it can only boost the economy.

12 G. Brocco

Once again a good idea becomes bloated by Congressmen trying to get reelected. Cut everything from the plan that does not directly generate a self funding job. Any governemnt “programs” should be voted on independently and approved on their own merits. Don’t piggyback every congress person’s special project on a bill that needs to be passed in the hopes of sneaking through controversial programs that we will be paying forever.

13 Curtis

Let’s see if I can put a different spin of things….

The way I see it, the reason I think “the economy is down” is because for the last several years, we have all lived “too high”. More specifically, too high FOR OUR STATION IN LIFE.

The economy is like a big pot. Where each of us deposits our “work”…and withdraws our “lifestyle”. We simply have been withdrawing far more “lifestyle” than is justified by the “work” each of us puts in. Even to the point of putting the difference in “cost” on “credit” (of one kind or another).

What needs to happen now is simply the reverse. We need to “work” more and “lifestyle” less. Then, when the debts are paid, the economy will re-balanced and will be just fine.

14 Bonnie Wilson

Our goverment is spending way to much money, and we are going to leave our kids in a big mess 10 or 20 years down the road, why should we bail out detroit when they were paying there employees over $78.00 dollars an hour and could not run there own business is that the taxpayers problem, this package will not help us at all as we just retired last year, my husband worked for the railroad for 37 years and only made just at the end $20.00 an hour and we get by.

15 dave

thats right let the big three auto makers die that way we can all drive foreign cars and help strengthen overseas economy even more, the way i see it those of you who made the 2 largest purchase of your household by buying a foreign car ,you people are somewhat directly the cause of our economic crisis.let detroit fall,put millions of steel workers,textile workers,tire companys,wire companys and countless others of american jobs.not just auto workers.sick of all this foreign crap.be american.buy american or move to japan and cry over there!

16 Dave 2

I’m sorry, but American cars just plain suck. They don’t last as long, they have clunky designs, are inefficient and cost too much. Not to mention, most “american cars” are filled with parts manufactured overseas anyway.

17 dave

that just shows your mentality.so what some parts are foreign made.the bulk of an american car purchase goes to corporate detroit.toyotas have american made parts on them but i wouldnt buy one because of it.i work in the rv industry,and if detoit totally collapses what are people going to tow a 36 foot fifth wheel with ?, a tundra? not hardly.a nissan titan? no way.like i said before buy american (when Possible) or move overseas along with your money to support foreign economy.

18 smiley

I have to admit $1000 dollars is not going to stimulate my spending. I mean it less then 08 tax break. I ll probably just put it away in savings.

19 donna

I think the goverment should give everyone who works *works being the key word a million dollars then there would be no financual stran on the working class we would pay off our morgatage’s, we as the working class work our butts off and see in our pay checks go down instead of up …america’s are not free anymore it seems like the goverment helps the rich out and the poor get pooror….

20 Two-Dogs

The only way the stimulus package can work is if it directly benefits the population starting with lower income households. Instead of making a fat corporate America fatter, make the money available directly to consumers. The easiest way is a national lottery. Let it start as only those earning less than 100K are eligible to purchase tikcets. No more than 10 tickets per household in a month at a cost of $1 per ticket. One win allowed in your life, period. Let the winning ticket holders dertermine one of two ways to use the winnings, limited to 30k. Pay against current mortagage or use as a down payment on a new first mortgage. The second option is a vehicle allowance. No money is paid directly to the winner, but the winner gets the direct benefit. The payment goes directly to the corporation in the name of the winner. The money goes back into the economy to bail out mortgage companies and the auto makers. The money gained from purchasing tickets is more than enough to pay administrative costs with the remainder put back into the lottery fund. The plan could have as many as 20 to 30 winners a month (if not weekly) and the lottery could sustain itself for over 10 years. It’s a long term stimulus plan for long term growth of the economy. It certainly beats giving our tax dollars away to corporations like AIG who spend the bulk of the money on vacations. Talk about pork barrel spending.

21 Kenneth

It is so funny how everyone is complaining about the current administrations effort towards correcting the recession and were so silent when Bush, Jr. gave the first portion of the Stimulus money away without even thinking about the consumers. At least taxes are being lowered and transparency exist in this administration.

22 shawn

this package doesnt help the hardest hit … it doesn’t help unemployed and those who are losing there jobs … you can’t cut taxes if i can’t pay any

23 Brenda

Obama, is trying to help get America out of this Mess that the Bush and
the Republican . I am sick of white america complaining about OBama
He have been in office just a month. It took Bush 8 years to mess this
economy uo. Give hime longer than a month to fix it.

24 J Teer

Why don”t all the Seniors band together on the broken promise of No taxes on Retire”s ????????????????

25 Janet Emmons

For years we have voted Repulbicain.but we heard Obama say over and over again that he make sure we retires will not have to pay taxes on our social security . We need all the money we can get on our fixed income,so that is way we went with Obama. Boy did we ever get fooled.Mr Obama well not get our votes the next time around.He is not a man of his word.On top of that he bad mouth our city ,Las Vegas.We may be old but not stupid.

26 capodanno division

The U.S. Naval Sea Cadet Corps consists of about 8,000 young Americans, aged between 11 and 17 years of age, who would benefit greatly by a stimulus grant.

27 Michelle

This is a stimulus package? I only read the part about the “tax cut” instead of a stimulus check……wow…..as I get paid twice per month, this will amount to a whole $15.38* per pay check …..Yep, I am going to run right out and spend that!

*($400 per year/26 checks, which is the amount that was approved)

28 dave a

Has anyone looked at 2009 15t publication. I am paying 24.00 more a week not getting any tax break. My paycheck is less not more. Compare your tax tables from 2008 and 2009 and you will see the difference. Good luck you are paying more not getting more. More garbage from the administration.

29 Kris

This is such a farce!
Forget the big shots that make too much money already!
I think the government should give each tax payer $20,000 & we WILL spend it to stimulate the economy!!! But, NO they will give each overpaid executive an additional $100K+ & the little man get a whole $26 extra a month!?!?!?! Who’s the genius that came up with this? Oh wait, this person already makes too much money!!1

30 fedup

for eight years or longer we put up with crap and lies from the repub party. no one was complaining except about the war and losing loved ones. all the while in the background jobs were slowing closing without notice. now that its in your faces you want instant relief and someone to blame. take the blinders off you know where the blame lies face up to it, whoever the ones dumb enough to vote for someone again not paying attention to the mess he was already putting this country in. where is he now, bush, probably drinking under his bed where he should be. people start to pray because right now that is this country’s only hope. god bless you all and america’s future

31 idea

i just a person with a thought i was just wonder if the government says we are in bad shape, which we are why cant the government help really help bail us out like for example: mind you just an idea you have what $787 billion in bailout money what if you would give everyone that works and is making at least $20.000 a year. give each person 500.000 and they must do the following things with the money.(1) pay off all their debts no matter how far back there debits go. (2) they must buy a home and could not sell there home back on the market for at least 5 years. and (3) they would have to buy an automobile, a american made hydrate car. which in my opioion would mean: you are putting back into the ecomic the car industry would benfit, the home business would grow and the the value of the grovements spending growth would grow because all the mone would be put right back in the system. something that is going to happen anyway.
wouldnt that be something if it was just that simple and easy to understand. just my idea. wow what if it could work that would great.

32 becky

I agree with everyone, however why should the people that draw ADC and get food stamps benefit more from this then the people that go to work every day and struggle to make ends meet its almost to me telling me to have a few more kids and stay at home and collect from state and have them pay my bills for me.

33 Kerri

Well a lot of you and people around the US are going to get a little suprise next year for taxes…the IRS isn’t giving you a “stimulus” credit…You will find that when you go to pay your taxes, (1) you will not recieve the return that you have recieved in the past and/or (2) YOU ARE GOING TO OWE!!!!! That’s right!!….Obama has spent sooo much money…why do you think he is going to give you a tax break when he has run up a tab so large…on your dime!!!! I am putting my Federal Withholding back to what it used to be. And PLEASE STOP WITH RACISM!!! A black man is in office. Black men and women have come far and that is wonderful, but black Americans are no longer the leading minority….Please stop talking about the white man and white America….How about white people start talking like you do??!! But I guess that would be prejudice…hmmmm….

34 rich

You must be dreaming if you think your going to see any money from the dems. They will take our taxes and give us promises in return. The banks are in trouble for lending to people that can’t pay the loans back, so now we are going to pay the loans. We will be lucky to keep our jobs while the goverment spends tax dollars on “buy the Votes Programs” and 2010 you will see it in action. 2012 Obama will cry he was not giving time for the program to work and promise you more hope. The only hope we have is he does not get his way in 2010.

35 rich

And for the bush heaters. He did not spends as much in 8 years as Obama did in 100 days. He made mistakes yes. But is you had a job for the last 8 years and now you think he is the reason you may lose your job now , you may ask this question. Are Lay offs are based on the future bussiness or the past. Many jobs will be lost because company know they are not going to have work for you in the future because of cost and lack of demand for products and services. So will some be lost do to lack of investment capital needed to withstand the recovery of the economy. Would you take your money and spend it to save someone a job knowing you will never get it back.

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