Final Agreement Reached On The Economic Stimulus Package
It has taken a very long time to happen, but Democrats and Republicans in the House have cooperated together with the President to get something positve done for the American economy. Thank God for election years–or this never would have happened. According to a Bloomberg report, there are several dimensions to the stimulus package.
To begin with, 117 million family units will receive rebate chacks for varying amounts as early as May of this year. Since some of the families receiving these checks don’t even pay income tax, a better word for the checks would be “bribery for a vote.” But, in any case, here is how it breaks down. The check amounts will vary depending on filing status and number of dependents. Individuals will receive $600.00 while couples will receive $1200.00. Another $300.00 will be given for each child in the household. The ceilings for these rebates are $75,000.00 per year for individuals and $150,000.00 per year for couples. The minimum a family can earn and still receive a rebate check is $3000.00 per year.
These rebate checks will have a modest impact on Small Businesses as consumers are most likely to spend their money than they are to save it. So, more money will be injected into the economy. But the big and more direct advantage for Small Business is in the fact that the maximum amount that can now be deducted for purchasing new equipment ($112,000.00) has been doubled.
The stimulus package also has provisions to stem the tide of the mortgage foreclosure problem. Fannie Mae and Freddie Mac, the two largest U.S. mortgage finance companies, are allowed under this provision to temporarily buy back mortgages of as much as $729,750.00, which exceeds the current $417,000 limit.
Short of making permanent the Bush tax cuts, this is about as good as Small Business could hope for. Hopefully the Congress will come to its senses before 2010 when the tax breaks are up for another vote. Until then, Small Business owners will have to make due with the crumbs Congress keeps throwing down for us.
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