Paving the road to nowhere, one word at a time.

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Location: Tijuana, Baja California, Mexico

American born, living in Mexico since 1992.

Monday, February 09, 2009

The Stimulus Miracle: Chapter Fourteen - Give Me Some (Tax) Credit

Other Provisions must be items in the bill that aren't Appropriated, otherwise they wouldn't get their own special section, and the first series of items falls under Tax Provisions. All of this stuff is applied to the Internal Revenue Code of 1986, in the form of revisions and additions. Don't think for a minute that I have the time or the talent to get into any detail. I don't. Plus, I'm out of tequila.

First in this section is an Earned Income Credit. I have no idea how to quantify it into one big number, but basically, for anyone making $75,000 or less ($150,000 if filing jointly), you get $500 ($1,000 if filing jointly), or 6.2% of your income, whichever is less. Once you hit over $75,000 of income, the amount starts to drop dramatically as income goes up. This is in effect for the next two years. We have no choice but to set this aside and see how it fits into the total at the end. There is going to be a lot of that from now on.

Next is another Tax Relief item, one for families with children. Basically, more than three qualifying kids will get you $5,000 per year over the next two years. I wonder what having 14 kids will get. Again, I have no idea how to quantify this. Sorry. Consult your own Tax Professional. And yet more Tax Credits! The Hope Scholarship Credit, for tuition and expenses (but not materials), can yield up to $2,500 if I'm reading this right. Of course, again, there's no way to quantify it. And it only applies for the first four years of college. Because, apparently, by the time you hit your fifth year of higher learning, you're already wealthy enough to afford college.

Now we get to Housing Incentives. First-time homebuyers no longer have to repay that tax credit, that is if you buy before July of this year. Oh, and they're reducing the ceiling for Low Income Housing Grants Received in 2009. Apparently, your government really wants you to buy a house.

And there are some Tax Incentives for Business, including a special allowance for certain property acquired during 2009, a temporary increase in limitations on expensing of certain depreciable business assets, an adjustment to 5-year carryback of operating losses (10%, ostensibly), except that none of this applies if you received a TARP payment, otherwise known as the old guy's bailout plan.

There are also incentives for hiring Veterans and "Disconnected Youth". Disconnected Youth must be between 16 and 25 years of age, and be unemployed, unskilled, and uneducated beyond high school. The best way to find a Disconnected Youth in order to hire him or her: Excessive facial piercing and/or tattoos, spends much time smoking dope behind convenience stores, is a member of a rock, punk, or emo band (irrespective of musical ability), has put to memory all lyrics of every song every published and/or performed by the band, "Greenday", and blames his or her parents for everything.

The next part of the bill gives the I.R.S. some sort of power concerning change of ownership of a company. Duh. They pretty much do whatever they want to anyway.

We now get to Fiscal Relief for State and Local Governments, starting with changes that make Tax-Exempt Bonds more marketable by modifying some of the obligations and limitations. There is a lot of modifying, and I'm sure this costs money, but I have no idea how much. There is a section on school bonds, but I have no idea what impact this has at the Federal level. It resets the limits on school construction bonds. Is it higher or lower? No idea. Where is a tax expert when I need one? Also, they address taxable bond options for government bonds. Apparently, if you own these bonds you get a 35% tax credit against the payable interest. Maybe. There are rules. Lots of them.

Speaking of Bonds, apparently there are Zone Recovery Bonds. This could be brand new, I have no idea. This is weighed by what zones have employment declines. There is something about limitations of 10 and 15 billion, depending. Oh, and they are repealing the withholding tax on Government contractors.

There are Energy Incentives, or at least there are changes to whatever existed prior to this bill. These include Renewable Energy Incentives, in the form of Tax Credits; Increased Allocation of Bonds for "New Clean Renewable Energy": 4 billion; Energy Conservation Incentives in the form of Tax Credits; Energy Research incentives in the form of Tax Credits. That's a lot of incentive.

Next in this section is stuff that didn't fit anywhere else. After a few paragraphs on Labor Standards, it seems that the Feds will match whatever the States will Grant for Low-income Housing Credit Allocations. There is also a provision that provides Grants in lieu of Tax Credits for certain Specified Energy property. You'll also be happy to know that after this year, there will be more reports made so that we can see where we're at. Every three Months. Because you can never have too many reports.

We have a little bit to add to our total, which is now 390.479 billion* but note the asterisk. There are billions being spent here that aren't quantifiable. At least for me. But we'll sort out all of that later.

* Plus Billions T.B.D.

Next: Chapter Fifteen – Non-Working Class


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