Wisconsin’s First District Congressman Paul Ryan today voted in favor of the Senate amended H.R. 5140, the Recovery Rebates and Economic Stimulus for the American People Act, also referred to as the “Economic Stimulus bill” to allow taxpayers to keep more of their own money.
The Economic Stimulus bill would provide rebate checks to individuals and families, bonus depreciation for businesses for new equipment purchases, increased expensing limits for small businesses and an increase in loan limits for Government Sponsored Enterprises (GSEs) such as Fannie Mae and Freddie Mac as well as the Federal Housing Administration (FHA). The amended version of the bill also expands the rebate to seniors and disabled veterans. Additional safeguards were added to ensure that illegal immigrants will not receive a rebate.
“Allowing American families to keep more of their own hard-earned money is a good policy. Americans are already overburdened by taxes and are facing the threat of outrageous tax hikes. I firmly believe that increasing personal economic freedom is good for our economy. Businesses will benefit from the incentives included in this bill,” Ryan said.
“Yet I can not stand behind the idea that tax rebates will add any lasting strength to our economy,” Ryan continued. “Growth of a strong free market economy is not founded on government rebates, but in policy rooted in lower taxes and an inviting atmosphere for business. Real economic growth will come from low tax rates on workers and business owners alike. I supported this bill because working men and women, who are simply trying to keep up with the cost of living, deserve to have more control over their own money.”
Specifically, H.R. 5140 includes the following provisions:
Rebate Checks for Individuals and Families: Rebate check amounts would be determined by the greater of two options: (a) income tax paid in 2007, with a maximum of $600 for a single taxpayer and $1,200 for married couples; or (b) $300 for an individual and $600 for a married couple, provided the individual or couple earned income of at least $3,000 in 2007. The rebate check amounts would phase-out with adjusted gross incomes above $75,000 for a single taxpayer and $150,000 for married couples. A children’s bonus would be included in the rebate check calculation. Anyone qualifying for the base amount would also receive an additional $300 per child, with no cap on the number of children.
Bonus Depreciation for Businesses: A 50 percent bonus deduction on new equipment in the year it is placed in service, with certain exceptions for equipment with a “long life.” This provision expires at the end of this year. This tax relief provides an incentive to small businesses to invest now and create more jobs.
Small Business Expensing: Current law permits small businesses to immediately expense (rather than deduct over time), costs for the first $125,000 of purchases each year. Current law phases out that benefit, on a dollar-for-dollar basis, when purchases exceed $500,000. The agreement increases those limits for 2008, to $250,000 and $800,000. This provision expires at the end of this year. It would provide small businesses an incentive to invest now in their business so they can keep the workers they employ and create more jobs.
Amendments passed by the House and Senate: The amendments added by the Senate and passed by the House would expand the “rebate” eligibility to those seniors and disabled veterans with at least $3,000 in Social Security or veterans benefits, but who did not qualify for a rebate under the House-passed bill because they did not pay any income taxes or have a high enough earned income.
Security Safeguards: The newly passed version also includes additional safeguards to ensure that illegal immigrants do not receive a rebate. In order to qualify, the bill requires a Social Security Number for both the parent and child, which is more stringent than current law for the Child Tax credit.