Update: Check out this post for updated details of Obama’s stimulus package proposal.
Now that the election is over, there is increased talk of trying to get a second stimulus package passed before Christmas, which could potentially include a second stimulus check. While nothing is certain yet, I imagine it is likely that president-elect Obama will have an influence on the package if it comes before he takes office; obviously he will if it takes place after he takes office.
Reuter’s recently published information on Obama’s proposal for a second economic stimulus package. Some of the highlights that might effect individuals personally include the following:
- Give businesses a $3,000 refundable tax credit for each new full-time employee hired in the United States over the next two years.
- Implement a 90-day foreclosure moratorium for homeowners making good faith efforts to pay their mortgage debt.
- Extend unemployment insurance for long-term jobless workers who have exhausted their benefits, and temporarily suspend taxes on those benefits.
- Temporarily allow penalty-free withdrawals of 15 percent from tax-preferred retirement accounts up to $10,000.
- Suspend rules requiring retirees to begin withdrawing from retirement accounts six months after they reach the age of 70.
- Reform the bankruptcy code to assist homeowners and remove legal impediments to encouraging more mortgage restructuring.
- In the longer term, Obama would roll back some of Bush’s tax cuts for the wealthy. He proposed a permanent tax cut of $500 for most individual workers and $1,000 for families. He also would eliminate taxes for seniors making up to $50,000.
- To help jump-start the economy, the tax cuts would be expedited through refunds based on 2007 tax returns. He would also provide a 10 percent refundable tax credit for mortgage interest to taxpayers who do not itemize their returns.
I am not sure if the penalty-free withdrawals from retirement accounts is a good idea, especially with so many people’s accounts having been battered by the falling stock market. Changing the rule on withdrawals after 70 sounds like a good idea to me though. If someone wants to leave their money in the account to have a chance at regaining some of their loses, that may help.
What do you think about some of the components of Obama’s plan?
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- A Look at the $8000 First Time Home Buyer Tax Credit for 2009
- What’s in the Stimulus Plan? Read the Full Text of American Recovery and Reinvestment Act of 2009
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{ 7 comments… read them below or add one }
I agree with you that removing the penalty to withdraw from your retirement is a bad idea. People need to be encouraged to save.
I don’t have a problem with removing the withdrawal penalty, since it’s temporary and meant to help people who are desperate. If it enables a homeowner to keep paying the mortgage until they are employed again, or work out a deal with the bank or whatever, it’s going to help a lot of people in the short term to get back on their feet.
Spending. Spending. Spending. That will be Obama’s plan. Fiscal stimulus is all they have left. I see the need for it, but fear the long term conseuqnces.
What about persons living on a SS pension alone? Will they get any “survival money?” My SS pension is worth about the same as it was in 2000. Thank you Mr. Bush!
@Brip blap- You bring up a situation that I had not really thought of carefully, and I don’t disagree that it could definitely help some people in a desperate situation. If it does pass, I hope those that are not in that type of situation don’t just take advantage of it because it is available.
It’s your money,and it’s a free country,we are not children ,and since we were smart enough to put the money in the first place.
Send the checks out to help as many people for the whatever reason. Our country is so evil and greedy. We have so much, but complain about everything. Things are going to happen. If our government did like the other countries we would all be in trouble. Because that don’t acknowledge anyone but the people in high offices. We need to be more thankful.