It's so sad to watch the State of the Union.
I’m reading his speech as he reads it nearly word for word on the teleprompters. The president makes endless promises while Congress sycophantically applauds. It’s as if he’s saying, “We’re the magic politicians and we can solve all your problems. I will cut that deficit that I inherited from President Bush but simultaneously cut taxes for all of you! I will give you a new jobs bill: green jobs, subsidized speedy trains, hand-outs for small business, tax credits for big business. And then Congress applauds itself for spending more of your money.
But we already have an idea of what this will really do: enrich accountants and tax lawyers. We’ve seen it in those stimulus “tax cuts” he bragged about. Here’s a sample of the magic:
Tax Relief for Individuals and Families
1. Making Work Pay Credit - credit of 6.2% of
earned income up to a maximum of $400
single ($800 joint) for tax years 2009 and
2010; phaseout for taxpayers with modified
AGI in excess of $75,000 ($150,000 joint); and
treatment of the U.S. Possessions
2. Temporarily reduce the earnings threshold for the refundable portion of the child tax credit for taxable years 2009 and 2010 to $6,000
3. American Opportunity Tax Credit - amend the HOPE scholarship credit for taxable years 2009 and 2010 so that it is available for four years at a rate of 100% of first $2,000 of expenses and 25% of next $2,000; phaseout for taxpayers with modified AGI between $80,000 - $90,000 ($160,000- $180,000 joint); make textbooks a qualifying expense; allow against the AMT
... 5. Waiver of requirement to repay first-time homebuyer credit unless home is sold within 36 months of purchase”“Exclude up to $2,400 of unemployment insurance benefits from gross income for taxable year 2009
6. Temporarily allow computer technology and equipment as a qualified higher education expense for qualified tuition programs for 2009 and 2010...
1. Extension of the renewable electricity credit - extend by three years the placed-in-service date for each section 45 qualified facility (two years for marine renewables), excluding coal and ppisa 12/31/09 solar facilities
...3. Modify section 48 energy credit – remove cap for small wind systems, and remove cutback to credit for subsidized energy financing”
...7. Extension and temporary increase to 30% ($1,500 per residence cap) credit for all section 25C nonbusiness energy property, and repeal reduction in section 25C credits by reason of ea 12/31/08 & receipt of subsidized energy financing
8. Credit for residential energy efficient property - remove credit cap for residential wind, geothermal property, and residential solar thermal property under section 25D, repeal reduction in all section 25D credits (residential solar, geothermal, wind, fuel cells) by reason of receipt of subsidized energy
9. Temporarily increase credit rate for nonhydrogen refueling property to 50%; increase max credit to $50,000 for business property ($200,000 in the case of hydrogen) and $2,000 for nonbusiness property (sunset 12/31/10)
Tax Incentives for Business
1. Special allowance for certain property acquired during 2009
2. Temporary increase in limitation on expensing of certain depreciable business assets
3. 5-year carryback of 2008 and 2009 NOLs with exception for TARP recipients
...5. Extension of election to accelerate AMT and R&E credits in lieu of bonus depreciation
6. Deferral and ratable inclusion of income arising
from business indebtedness discharged by the
reacquisition of a debt instrument, and temporary ra 12/31/08 & AHYDO exception for debt exchange or before 1/1/11;
That was only a sample.