Cut Income Taxes $1,000 for Working Families

President Obama has made the following promises:

"Obama will cut income taxes by $1,000 for working families to offset the payroll tax they pay." — Obama's Blueprint for Change

Other promises regarding taxes.

UPDATES:

Updated: February 17, 2009

Congress trims Obama's tax cut for workers

One of the bigger pieces of the economic stimulus bill is the "Making Work Pay" tax credit, an initiative that Obama mentioned often during his campaign. If you ever heard Obama say he would give a tax cut to "95 percent of working families," this program is the origin of that claim.

Obama said the credit was intended to offset payroll taxes, which are automatically deducted from most workers' paychecks. Even if workers make so little that they do not owe income tax, the payroll taxes are not refundable. This is supposed to reimburse them for that. Under Obama's plan, the tax credit would be worth about $500 per worker, or $1,000 for working couples.

The initial version of the stimulus bill in the House, like Obama's original promise, was for $500 per worker. But that was reduced in the Senate to $400 per worker as a way of reducing the overall cost of the package. That lower level of $400 per worker, for a total cost of $116.2 billion, made it into the final bill. Obama signed the American Recovery and Reinvestment Act of 2009 on Feb. 17, 2009.

We should also note that the stimulus bill provides the tax cut only for 2009 and 2010. If Obama wants the tax cut to continue beyond those years, he will have to include it in future budget legislation. Indeed, it's possible Obama could raise the amount to $500 that way. But for the present, we find Obama tried to fulfill his promise and fell slightly short of the goal because Congress trimmed it to $400.

Sources:

Thomas, The American Recovery and Reinvestment Act of 2009, accessed Feb. 17, 2009

PolitiFact.com, Tax cuts for 95 percent? A closer look, Oct. 20, 2008


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