Tired of all of the rhetoric and none of the truth?

95% of the working class got a tax cut last year. That’s the largest tax cut in US history for middle class and working Americans.

So how is it that the angry and scared members of the radical fringe dominate the news cycle every night?

They scream about deficits and “outrageous taxes.” Where were they when President Bush added almost $5 trillion to our national debt? [1]

Meanwhile our country faces critical challenges in our infrastructure, education, economy and overall quality of life.

Taxes and government are an essential part of all of these.

The answer isn’t “big government” but effective government.

The Other 95 Percent

1. First Time Homebuyers Credit. This credit was originally enacted in 2008, but was extended and enhanced twice in 2009, most recently in The Worker, Homeownership, and Business Assistance Act of 2009. A tax credit of up to $8,000 is now available for qualified first-time homebuyers in 2009. In addition, a tax credit of up to $6,500 is available for qualified existing homeowners who purchase a new principal residence.
2. Making Work Pay Credit. This credit is targeted to lower and middle income taxpayers and is equal to a maximum of $400 for individuals and $800 for married couples. To qualify for the maximum credit, a single person must have earned income of no more than $75,000 and no partial credit is given if earned income exceeds $95,000. For married couples, the earned income limit for a maximum credit is $150,000 with individuals making $190,000 or more receiving no credit.
3. Unemployment Compensation. The first $2,400 of unemployment compensation received in 2009 in excluded from income for federal income tax purposes. This exclusion was only for 2009 and has expired unless it is adopted again sometime this year.
4. Sales and Use Tax Paid on Automobiles. This is a temporary deduction for sales and excise taxes paid relating to the purchase of a qualified new automobile, light truck, or motorcycle purchased through December 31, 2009.
5. Education Incentives. The Recovery Act significantly enhanced the HOPE scholarship credit and renamed it the American Opportunity Tax Credit (AOTC). The new credit has a higher maximum credit amount, is partially refundable, and is available to some higher income earners. It is also expanded to apply to the first four years of post-secondary educations (as opposed to two before.) This credit is set to expire at the end of 2010.
6. Child Tax Credit. The Recovery Act enhanced the child tax credit by making a larger portion of the credit refundable for 2009 and 2010.
7. Earned Income Tax Credit. The Recovery Act increased the Earned Income Tax Credit.
8. Bonus Depreciation. The 2009 American Recovery and Reinvestment Act (“Recovery Act”) extended bonus depreciation deduction for property placed in service in 2009. This allows businesses to deduct 50% of the qualifying property in the first year that it is placed in service.
9. Section 179 Expensing. The Recovery Act also extended the $250,000 limit on qualifying property that can be expensed by qualifying small businesses under Section 179.
10. Work Opportunity Tax Credit Expansion. The credit rewards employers that hire individuals from targeted groups. The Recovery Act expanded the targeted group to unemployed veterans and disconnect youth.
11. Energy Tax Credits. The 2009 Recovery Act expanded and extended many energy tax incentives for businesses.
12. COBRA Premium Assistance. This provision allows individuals that have been involuntarily terminated to pay only 35% of their COBRA health insurance premiums to their former employers for nine months, and their former employers are required to treat this as full payment. The employers then get to claim a tax credit for the other 65% of the premium on their payroll tax returns. Thus, it should result in no additional liability to the employee or the employer. Currently, COBRA Premium Assistance is only available for individuals involuntarily terminated prior to February 28th, 2010. There are a couple of bills that are proposing to extend this even further.
13. NOL Carryback. Both of the major acts past this year expanded the ability of small and medium sized businesses to count the losses sustained in 2008 or 2009 to recoup taxes paid in the prior five years.

Shame, shame on those dems for not giving the little people a break. Tsk tsk.

This is only a step. HR3590 was a change to the bill, and it now must go back to the senate for reconciliation/affirmation.

The senate, in essence, must avoid making any changes to the HR3590 changes in order to present this to the president. The bill produced for the executive must be identical from the house and senate.

Were the senate to make any amendments, the bill would then again be put to the house for reconciliation.

HR3590 changes include eliminating the FFEL program (i.e stafford loans, FEL) in turn for direct government loans for secondary education. It includes language restoring the original method of requiring citizens to obtain health insurance under penalty otherwise, and language requiring that states create insurance exchanges that will serve as an alternative to private insurance for particular groups of income earners.

The latter two are of questionable constitutionality. Never before has the congress attempted to pass legislation requiring a private citizen purchase what is ostensibly a private product; and the tenth amendment prohibits the federal body from requiring via legislation the state governments use in enacting any piece or part of federal legislation.

Another note; taxes written up in HR3590 specifically against insurance company executives are also of questionable constitutionality, as it has bee ruled in the past that such taxes against certain individuals, groups, or classes *as named* are de facto penalties. Things the gov’t may not say: Joe is to pay 50% higher taxes. People with red hair are to pay 50% higher taxes. People working in widget manufacturing are to pay 50% higher taxes.

HR3590 also introduces a 3.6% (check me) tax on investment income to entities of $200,000 annual income or higher.

The current government appears to be “Aside the people, astride the people, and to the people.”