With the outlook for the economy less than palatable for 2008, President Bush has decided to take action. Last week, he announced $145 billion in tax relief for individuals and businesses. His intention with the move is to give a shot in the arm to the economy. He is working with Congress to iron out the details before the plan is implemented.
IRS tax debt and high federal taxes have troubled many Americans for years, taking away a big chunk of their income. Also, on top of the federal income taxes, many Americans have to shell out money for state income taxes, as well. In a remarkable display of bipartisanship, Democrats and Republicans are endorsing the large tax relief and tax help plan.
According to Bush, the plan has to be big to have a great enough impact on the economy and the lives of everyday Americans. He wants the tax package to stimulate the economy, hoping that the high gas prices, the instability in the mortgage, housing and credit markets won’t deter consumers from spending money.
Having the support of the Democrats for the beleaguered Republican President is a boon, a chance to end his last year of his Presidency for posterity in a positive light. While the details are being hammered out in corridors of Washington, the public waits for a silver lining.
Though the details must still be negotiated, both the Congress and the White House are leaning towards similar measures taken to help Americans during the 2001 recession. The proposed measure may include a one-time tax rebate for individuals and expanded deductions for businesses.
However, there are some issues that have to be resolved before any action can be taken. The Democrats would like President Bush to include extension of unemployment benefits, conjoined with tax breaks as part of the comprehensive stimulus package, while the President believes that cutting taxes, rather than federal spending is the gateway to economic upliftment.
A tax relief proposal is not the singular answer; Democrats would like to see a more balanced package that focuses on the middle class and working families. So far, the news reports proclaim that the tax rebate would be around $800 for individuals and $1600 for couples.
Bush hopes that giving back to the American people, a proposed 1 percent of the Gross Domestic Product as stimulus package would induce consumers to shop and business owners to invest in their enterprises this year. It is unclear whether the tax rebate is part of larger Bush scheme of permanent tax cuts.
The Democrats oppose any stimulus measure that will be linked to permanent tax cuts. Whether the stimulus package is $145 billion or $200 billion, the effect, if any. in the lives of the people and the economy will be short-term. Our elected leaders need to look past stop-gap measures and address the true underlying issues of our economic and national policies in all spheres.