Posted on Wed, Apr. 15, 2009
last updated: April 15, 2009 06:19:29 PM
WASHINGTON -- President Barack Obama used the deadline day for filing IRS returns Wednesday to herald $800 million in tax cuts for South Carolinians from the new "making work pay" credit, the centerpiece of the tax portion of his $787 billion economic stimulus plan.
Obama said 1.7 million households in South Carolina will get an average of $470 apiece from the "making work pay" credit, which has a ceiling of $400 for working individuals and $800 for working families.
"Since the Recovery Act was signed into law (Feb. 17), we have delivered real and tangible progress for the American people," Obama said. "I am proud to announce that my administration has lessened the tax burden on working families while also restoring some balance to the tax code."
Republican congressional leaders, however, ignored the stimulus tax cuts and criticized Obama's recent budget proposal, which they said would raise taxes over the next five years.
"Overtaxed families and small businesses have had enough," said Rep. John Boehner of Ohio, the House Republican leader. "They've had enough of Democrats forcing taxpayers to pick up the tab for more wasteful spending."
The $800 million South Carolinians will receive from the stimulus package's "making work pay" credit is about 42 percent of the state's $1.9 billion total take from eight new tax cuts in the stimulus bill Congress passed in February with almost no Republican support.
Obama's aides also detailed $349.4 million for an estimated 72,800 unemployed South Carolinians in expanded healthcare premiums -- worth $4,800 apiece -- and $250 one-time payments to 931,852 Social Security recipients, disabled veterans and some other retirees, for a total of $233 million.
Many employed South Carolinians and other Americans are already pocketing money from the "making work pay" credit through reduced payroll taxes that have increased their take-home pay.
Obama said 95 percent of all working families nationwide get a tax cut from the stimulus plan, with more than two-thirds of the benefits going to the middle 60 percent of wage earners.
The stimulus tax cuts will save or create 14,560 jobs in South Carolina, 30 percent of the 50,000 total from the entire recovery package, Obama said.
In Columbia, U.S. Sen. Jim DeMint and Gov. Mark Sanford spoke at one of 11 "tea party" tax protests across the state. They traveled to Charleston to appear at a tea party there.
Conservatives organized hundreds of the demonstrations throughout the country, where activists wore colonial garb and waved tea bags in historic solidarity with American colonialists who dumped British tea into Massachusetts Bay to protest levies imposed from England.
Former Arkansas Gov. Mike Huckabee addressed a "Fair Tax" rally at Township Auditorium in Columbia, pushing the flat-tax system that was a main feature of his 2008 Republican presidential bid.
Republican National Committee Chairman Michael Steele accused Obama and his allies in Congress of "having passed or proposed more than $5 trillion in new spending and $1.4 trillion in new taxes."
The Republicans appeared to be focusing mainly on Obama's first budget proposal to Congress. The $3.55 trillion spending plan for fiscal 2010, which he unveiled Feb. 26, would increase taxes for Americans earning more than $250,000 a year.
Senate Majority Leader Harry Reid, a Nevada Democrat, said the Obama budget, which Congress passed last month with no Republican votes, had several middle-class tax cuts: expanded child, tuition and earned-income credits.
"Because of our economic recovery plan, Tax Day is going to be easier for nearly every working American," Reid said. "And because of the budget we passed earlier this month, the biggest tax cuts will go to the middle class, not multimillionaires."
Stimulus tax breaks
President Obama's $787 billion stimulus plan will direct $1.9 billion in tax cuts to individuals, families and business in South Carolina over the next two years. The following credits and reductions are ranked by total dollar benefit to the state's taxpayers.
Making work pay credit: An estimated average of $470 for South Carolina households, $800 million in total, maximum $400 per working individual and $800 per working family.
Expanded depreciation for businesses: Allows small businesses to write off up to $250,000 in investments; businesses that buy equipment can accelerate its first-year depreciation to up to half the purchase price. Worth $495 million to South Carolina businesses.
Expansion of child tax credit: Lowers annual taxable income eligibility from $12,550 to $3,000. Will bring an average of $1,636 to 160,163 low-income families in South Carolina, for a total of $262 million.
"American Opportunity" credit: Up to $2,500 per college student to offset tuition and other costs, for up to four years in college. Will bring about 71,345 South Carolina families an average of $1,837, for a total of $131 million.
Expansion of first-time homebuyer credit: Up to $8,000 per family on 2008 or 2009 tax return. Projected to return $94.6 million -- $4,643 apiece -- to 20,384 homebuyers in South Carolina.
Carryback of net operating losses for businesses: Small businesses can choose to carry back 2008 net operating losses for up to five years, three years longer than previously allowed. Provides immediate refunds of taxes from previous years. More than 312,000 small businesses will get an estimated $159 apiece this year, for a total of $49.5 million.
Increased earned-income credit: Increases credit for lower-income working families with three or more children. Worth an estimated $375 apiece to 91,730 families in South Carolina, for a total of $34.4 million.
Vehicle sales and excise tax deduction: New deduction for state and local sales and excise taxes paid to buy new cars, light trucks, recreational vehicles or motorcycles through 2009. About 113,570 South Carolinians will save an average of $205, for a total of $23.3 million.
McClatchy Newspapers 2009