The Economic Stimulus Package
By: Congressman Brad Sherman
The policies of this Administration – particularly the huge tax cuts for the very wealthy and the $330 million we spend every day in Iraq – have led us to the Bush recession. Our economy needs a jump start. That’s why I supported the bipartisan emergency stimulus package which passed Congress in February. It contains two major provisions relevant to Valley families, along with some important small business tax relief:
1. TAX REBATES
Over 90% of Valley family taxpayers, and 80% of individual Valley taxpayers, will be eligible for tax rebates.
MINIMUM (for those who paid little or no income tax)
- $300 for workers who earned at least $3,000
- $300 for Social Security beneficiaries and certain recipients of Veterans benefits
- Up to $600 for individuals with incomes of up to $75,000
- Up to $1,200 for married couples with incomes of up to $150,000
- $300 per dependent child
PARTIAL BENEFIT (decreasing percentage of full benefit)
- For individuals who earn $75,000 to $87,000
- For married couples who earn $150,000 to $174,000
- Somewhat higher incomes will qualify for some benefit if you have dependent children
- The first checks are expected to be mailed in May
2. HELP WITH HOME MORTGAGES
Mortgages above the “conforming loan limit” are called “jumbos.” Until the recent home lending crisis, “jumbo” loans had rates of about .25% higher than “conforming” loans-but now the difference has shot up to about 1.25%. Until last month, the conforming loan limit was $417,000-plenty high if you are buying a home in Kansas City-but not much help for most homebuyers in the Valley.
I have been working for many years to raise the “conforming loan limit” for high-cost areas like Southern California. The economic stimulus bill temporarily increases the conforming loan limit to $729,750 for 2008, and temporarily increases the Federal Housing Administration loan limit to the same amount for 2008.
This will help those buying, selling or refinancing a home in the Valley in 2008. I’m working harder than ever to make these increases in the loan limits permanent.
SMALL BUSINESS TAX INCENTIVES
Finally, for 2008, the stimulus bill increases the maximum amount that a taxpayer can expense on the cost of certain depreciable assets to $250,000 from $128,000. It also allows for a bonus, first year depreciation deduction of 50% of the amount of the adjusted basis of certain depreciable assets placed into service in 2008.
For more information consult a professional tax advisor or call my district office at (818) 501-9200 for referrals for free tax advice.