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Leaders from the House of Representatives completed negotiations on January 24, 2008, with President George W. Bush's administration over a $150 billion package of economic stimulus provisions that they believe will prevent the economy from heading into a recession. At a Capitol Hill briefing, House Speaker Nancy Pelosi (D-Cal.) and House Minority Leader John Boehner (R-Ohio) were joined by Treasury Secretary Henry M. Paulson to announce details of the package that would give tax rebates and child tax credits to millions of American families, and tax relief to businesses. Lawmakers hope that the bipartisan proposal will reach the president's desk by mid-February.
According to details from Paulson and Pelosi, single taxpayers with earned income of at least $3,000 will get a tax rebate check of at least $300, while married taxpayers would get double that amount. Single taxpayers with income up to $75,000, and married taxpayers with incomes up to $150,000 will see rebate checks of up to $600 and $1,200, respectively. Taxpayers with incomes above those levels will see benefits phase-out at 5 percent for each additional $1,000 in earnings. In addition, the package includes a child tax credit of $300 per child. The tax rebates will go to approximately 117 million Americans.
The cost of the rebate checks and child tax credit is estimated at $103 billion. For businesses, the stimulus package would provide a 50 percent bonus deduction on new equipment in the year that it is placed in service. The approximate cost would be $42.3 billion for 2008. It would also allow employers to fully expense $250,000 in both new and used tangible property in the year it is purchased. The cost would be $1 billion.
Senate Democratic leaders praised the focus of the House agreement with the White House, citing the targeted tax rebates aimed at middle class families, but they also termed the package incomplete, announcing their intention to add more spending measures, which could delay or endanger passage of the bipartisan stimulus measure.
President Bush said the stimulus package meets his principles for boosting the economy. In a brief statement at the White House on January 24, Bush praised the agreement for containing "an effective, robust and temporary set of incentives" to encourage consumer spending and business investment.
Stay tuned to CompleteTax for the latest information and changes regarding the 2007 tax filing season!
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