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1 Mark Robyn, Update: The Tax Savings from Final Fiscal Stimulus 1 (2009)

handle is hein.taxfoundation/ffbgdxz0001 and id is 1 raw text is: FOUNDATION February 2009 No. 163 FISCAL FACT Update: The Tax Savings from Final Fiscal Stimulus By Mark Robyn On Tuesday, February 17, President Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA 2009), also know as the stimulus bill. It includes several provisions that change the individual income tax. Tables 1, 2 and 3 below show the tax savings for typical American families with various income levels and in different stages of life. Table 4 provides a brief description of the tax provisions included in the stimulus bill. Table 1 shows the tax savings for a family with two children, one in college and one under age 17. Savings are shown for both a married couple and a single parent. At most income levels, the savings are largely due to the refundable Making Work Pay credit ($400 for a single filer, $800 for a couple) and the increased and now partially refundable education credit (now called the American Opportunity credit). The so-called AMT patch also makes up a substantial portion of the savings for the married couple at most incomes shown and for the single parent at higher incomes. Oddly, the calculation of a person's AMT liability is so confusingly interwoven with the calculation of regular tax liability that the so-called AMT patch can actually provide tax relief to people who would not have had to pay the AMT even without the patch. In permanent law, the AMT prohibits the full use of certain tax credits, but with the one-year patch, the full value of those credits can be taken, and so even taxpayers with modest incomes often see significant savings from the AMT patch.

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