President-elect Barack Obama’s declared desire to help middle- and low-income families survive the economic downturn has given hope to homeowners troubled by threats of foreclosures.
Now, as Obama’s presidential inauguration nears, talks about Obama’s economic stimulus plan have been top news. One of Obama’s advisers, David Axelrod, appeared on “Meet the Press” and talked about tax cuts that could increase the take-home pay of employees by at least $83.
During the campaign period, Obama made income tax-cut proposals for middle- and low-income Americans and tax exemption for older people earning less than $50,000 a year. In his first interview after his election victory, Obama also said that one of his first priorities after his inauguration would be help to homeowners avoid foreclosure.
Analysts say that among Obama’s proposals, his Make Work Pay Credit plan is the most effective way to put money into the pockets of the most number of families. It is also one of additional ways to help homeowners avoid foreclosure. This plan provides an income tax credit of $500 to individuals earning less than $75,000 and $85,000 and $1,000 to couples earning less than $150,000.
Gary Burtless of the Brookings Institution recommended that these tax credits and tax breaks be implemented in the first months of 2009 so they would make a big impact on consumer spending and stimulate the economy. He also ventured further that giving two years’ worth of tax credits in advance to workers can really make a dent on their financial problems. Homeowners facing foreclosures would have something to kick-start their finances and maintain their mortgage loans.
The Tax Policy Center predicts that Obama’s tax proposal would cost about $49 billion in 2009 and about $66 billion in 2010. The amounts are small compared to those spent for the financial industry’s bailout in 2008, but they would provide much-awaited relief to Americans troubled by debts and foreclosures.
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