January 18, 2008
Bush announces plan to stimulate troubled economy
Legislation updates provided by Rob Smith, Ceridian manager of Government Relations
Bush announces plan to stimulate troubled economy
President Bush on Friday outlined plans for a $145 billion tax relief package designed to help stave off a looming recession caused by the nation's ongoing credit crunch.
The President is advocating a tax rebate in the amount of roughly $800 for individuals and $1600 for married couples to increase consumer spending. Although the exact amount of the rebate and the size of the overall package must still be ironed out, the rebate will most likely be delivered to taxpayers in the form of a one-time check from the US Treasury. This is good news for employers because, unlike other tax relief measures in the past, they would not be required to make a change in tax withholding to deliver the tax cut.
The tax package will also include incentives for businesses, and Congressional Democrats are looking to expand unemployment benefits in an effort to deliver money to lower and middle income individuals who would be more likely to spend it immediately.
Mechanically, the tax rebate would most likely work by eliminating the 10 percent income tax bracket for 2008, with taxpayers receiving rebate checks within the first few months of the year. For 2008 the 10 percent tax bracket applies to $8,025 for single filers and $16,050 for joint filers. Thus, temporary elimination of the 10 percent bracket would produce rebate checks of approximately $800 for single filers and $1600 for married couples filing jointly.
While Congress is still in the process of drafting legislation to implement the rebates, the Democratic leadership has already said that it favors the one-time checks, so taxpayers should expect to receive a check from the government sometime early this year. Several key lawmakers have said the rebates will probably be limited to individuals with annual incomes of $85,000 or less and couples with incomes up to $110,000, but these details have not been finalized.
Legislation updates provided by Rob Smith, Ceridian manager of Government Relations
Bush announces plan to stimulate troubled economy
President Bush on Friday outlined plans for a $145 billion tax relief package designed to help stave off a looming recession caused by the nation's ongoing credit crunch.
The President is advocating a tax rebate in the amount of roughly $800 for individuals and $1600 for married couples to increase consumer spending. Although the exact amount of the rebate and the size of the overall package must still be ironed out, the rebate will most likely be delivered to taxpayers in the form of a one-time check from the US Treasury. This is good news for employers because, unlike other tax relief measures in the past, they would not be required to make a change in tax withholding to deliver the tax cut.
The tax package will also include incentives for businesses, and Congressional Democrats are looking to expand unemployment benefits in an effort to deliver money to lower and middle income individuals who would be more likely to spend it immediately.
Mechanically, the tax rebate would most likely work by eliminating the 10 percent income tax bracket for 2008, with taxpayers receiving rebate checks within the first few months of the year. For 2008 the 10 percent tax bracket applies to $8,025 for single filers and $16,050 for joint filers. Thus, temporary elimination of the 10 percent bracket would produce rebate checks of approximately $800 for single filers and $1600 for married couples filing jointly.
While Congress is still in the process of drafting legislation to implement the rebates, the Democratic leadership has already said that it favors the one-time checks, so taxpayers should expect to receive a check from the government sometime early this year. Several key lawmakers have said the rebates will probably be limited to individuals with annual incomes of $85,000 or less and couples with incomes up to $110,000, but these details have not been finalized.
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