Column: Revitalizing our economy with tax reliefWASHINGTON — This year, millions of middle-class families are finding the tax burden lighter and bigger refund checks in their mailboxes.
By: Rep. Tim Walz, Worthington Daily Globe
WASHINGTON — This year, millions of middle-class families are finding the tax burden lighter and bigger refund checks in their mailboxes.
That’s because the Recovery Act passed last year reduced taxes by almost $100 billion last year and by $220 billion this year. For American families, this translates into significantly lower taxes and larger tax refunds — in fact, refunds are up 10 percent this year, to an average of $3,036.
You have a right to know the facts about how you are benefiting right now by the job-creating legislation that has already become law.
At a time when America appeared to be on the verge of another depression, we passed the Recovery Act to help our economy start creating jobs again. It invested in rebuilding roads and bridges across the nation and right here in southern Minnesota such as the Highway 169 re-construction project through downtown St. Peter. It kept police officers, firefighters and teachers on the job serving you. And with our economy creating jobs again, it’s clear that the law is helping put America back on the right track.
The Recovery Act was also 40 percent tax cuts to help businesses start hiring again and provide relief to middle-class families struggling in the recession. That’s right. The Recovery Act, otherwise known as the “Stimulus Bill,” was 40 percent tax cuts targeted largely to the middle-class.
According to Bruce Bartlett, a conservative economist and economic advisor to President Reagan, “federal taxes are very considerably lower by every measure since Obama became president.”
How do those low taxes benefit you? As you complete your taxes this year, keep in mind that you may be eligible for the following tax benefits. If you have already completed your filing for this year, there is still time to amend it.
Making Work Pay credit: Ninety-five percent of working families are receiving this credit, which means $400 less in taxes for individuals and $800 less for married couples. You’ve probably already seen the effects of this credit in your paycheck.
College expenses: Families and students can claim up to $2,500 to pay for college expenses.
First-home purchase: If you have bought your first home by April 30 of this year, you can claim an $8,000 deduction. And many other homebuyers can claim a deduction, as well.
Energy efficiency incentives: If you’ve made your home more energy efficient through steps like adding insulation or energy-efficient windows, you’re probably already saving money on your energy bills. But now, you can also claim a $1,500 tax credit.
New vehicle purchases: If you bought a new vehicle between Feb. 17 and Dec. 31 of last year, you can deduct the state and local sales taxes from your federal tax return.
Family tax credits: If you’re a moderate-income family, the Recovery Act increased your tax credits: the Earned Income Tax Credit is now $5,657, and it’s now easier to claim the Child Tax Credit.
Tax-free unemployment benefits: Unemployment benefits are usually taxable — but if you were looking for work last year, the Recovery Act made the first $2,400 in unemployment benefits tax-free.
These are still the hardest economic times we’ve seen in decades, and America has a long way to go before its economy is fully back to financial security. But in a little more than a year since the Recovery Act was signed into law, we’ve made real progress — and the Recovery Act’s significant tax cuts and America’s can-do spirit are part of the reason why.
Democrat Tim Walz is in his second term representing Minnesota’s 1st Congressional District.