This chart compares what after-tax income looked like after passage of the Obama stimulus package—the American Recovery and Reinvestment Act of 2009—and what it will look like under this year’s Republican tax-scam:
Here are some relevant items to this comparison that were part of the stimulus (originally $787 billion, but ultimately $831 billion):
The American Recovery and Reinvestment Tax Act (ARRA) reduced federal taxes by an estimated $287 billion over 10 years. About 80 percent of the tax cuts—$232 billion—were for individuals; smaller cuts subsidized investment in renewable energy and a handful of provisions for businesses. [...]
Other major provisions in ARRA replaced the HOPE education credit with the more generous and more refundable American opportunity credit (at a 10-year cost of $14.8 billion), increased the refundability of the child credit ($13.9 billion), boosted the earned income tax credit (EITC—$4.7 billion), and temporarily suspended taxation of the first $2,400 of unemployment benefits ($4.7 billion). All gave taxpayers more money to spend and thus help boost the economy. Two other provisions—the automobile sales tax credit ($1.7 billion) and the homeownership tax credit ($6.6 billion)—subsidized the purchase of cars along with homes for first-time buyers, thus targeting benefits for two industries hit hard by the Great Recession [...]
Effective for 2009 and 2010, the Making Work Pay tax credit accounted for half of individual tax cuts. The credit equaled 6.2 percent of earned income up to a maximum of $400 ($800 per couple) and phased out at a rate of 2 percent of income over $75,000 ($150,000 for couples). As a result, individuals with earnings between about $6,450 and $75,000 (between about $12,900 and $150,000 for couples) could get the maximum credit. Those with incomes exceeding $95,000 ($190,000 for couples) received no credit [...]
It reduced the Social Security (OASDI) tax rate on employees to 4.2 percent for 2011 and the self-employment tax rate by 2 percentage points for 2011. (However, the act did not reduce the amount of self-employment tax that taxpayers could deduct on their income tax returns.)
(In addition, a substantial amount of the stimulus funding went to job-creation in research, restoring infrastructure ($172 billion), providing health care to the disadvantaged, providing support for recession-battered local and state governments, education assistance, food stamps and rural assistance, extending unemployment benefits and programs, weatherization and other energy conservation measures, and small business assistance.)
There were many critics—me included—of the size and certain elements of the stimulus when it was proposed. More would have been better, we said. But that is irrelevant to the fact that most studies show that what passed in 2009—with the help of only three hard-won Republican votes in the Senate—had a positive impact. One of the best studies—”How the Great Recession Was Brought to an End”—written in the summer of 2010 concluded that it had boosted the gross domestic product by 3.4 percent, cut joblessness by 1.5 percent, and created or saved nearly 2.7 million jobs.
What matters in our comparison today, however, is that most of the tax-cut benefits of stimulus went to people who really needed them instead of people with yachts and spare homes on Lake Geneva and corporations with trillions tucked in offshore accounts.