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Today, Congress and President Bush announced a tentative agreement on a fiscal stimulus package to help avoid what many believe is an impending recession. So, what does this package mean to you? Well, there is something in this package for most everyone except for folks that make more than $75,000 (singles) or $187,000 (married couples, although the rebates are phased out beginning at $150,000 of income). Here's the quick and dirty:
Approximately 117 million American families will get some tax rebate including low income workers that currently pay no income tax (although they do pay payroll taxes).
Individuals would get rebate checks of $300 to $1,200 depending on a number of factors including income level and number of children in a household. Low-income workers who earned as little as $3,000 and paid no income tax would also get rebates. Workers who paid income taxes would receive up to $600 in rebates, or $1,200 for a couple. Taxpayers with children would get an extra $300 per child.
Businesses also get in on the action; they would get a 50% write-off on capital investments made in 2008. This is likely to help create some number of new jobs this year, so say the politicians.
Finally, the package provides for the definition of a "Jumbo" mortgage to change such that mortgages that are the larger of $417,000 or 125% of the median home price in the area. This is significant because it will reduce the costs of homeowners who need to take out a jumbo mortgage to pay for a loan (thus helping the flagging real estate market).
All in all, this looks like a reasonable plan. I am sure some will argue that folks that don't pay income taxes should not get a rebate (fair point). The other side will argue that these folks need the help the most. Whether you like this package or not, it should help give the economy a short-term boost.
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