Between this year and last year, Wisconsin will receive approximately $13 billion in federal stimulus investment ― over $5 billion is in the form of tax cuts for every individual, family and most businesses. Who in Wisconsin is getting these tax cuts? Everybody. Through the Making Work Pay Credit Program, each of Wisconsin’s 2.2 million families is receiving an average tax cut of $506 in 2009-2010 which would pay for a month’s worth of groceries. Through the Child Tax Credit, the families of 279,000 children will save $230.7 million, receiving a higher tax break for each child living in the home. Through the American Opportunity Tax Credit, over 160,000 families of college students will save $217.4 million with a larger tax cut for tuition and other college and technical school expenses lasting up to four years. Through the Earned Income Tax Credit, there are 228,000 low income families with children who will receive an average of an additional $676 in tax returns. This $141.4 million would pay for over half of the families’ clothing costs for the year.
Through the Refundable First-Time Home Buyer Credit, 30,111 first time home buyers received a $500 tax credit and do not have to pay back the credit for 15 years. This will save young families $74.6 million.
Through the suspension of taxation of unemployment benefits, there are 441,000 unemployed persons who will get a $250 federal refundable tax cut as well as a state tax cut – a $73.4 million boost to people who lost their jobs because of the banks’ meltdown. This could pay for heating bills in February and March.
Through the deduction for sales tax on automobile purchases, households purchasing a new car can deduct the sales tax for the purchase price (up to a vehicle cost of $49,500) from their federal income tax. This is a total tax cut of $25.5 million.
Families can also claim tax cuts for energy conservation investments in their home or for household transportation, up to $1,500 per household.
Through economic recovery payments to retirees, $250 checks went to over one million people who are retired or disabled and whose sole source of income is Social Security, SSI, Railroad pensions and Veterans benefits. For seniors, this would cover the cost of Medicare Drug Premiums for six months. This aid totaled $267 million for retired veterans, senior citizens and people with serious disabilities.
Through a number of business tax breaks, Wisconsin business owners are getting a $561 million federal tax cut through 2010.
The federal government is the ultimate safety net to keep the economy from collapsing, and these tax breaks are an important part of that protection.