Bigger ’09 Paychecks Under Obama’s ‘Make Work Pay’ Tax Plan

December 31st, 2008 | by alexis |

Americans making less than $75,000 annually should expect to see a slightly larger paycheck every two weeks when Barack Obama takes the presidential office on January 20. While he was once believed to be re-thinking the plan he touted during the election, the President-elect is in fact expected to implement a reduced tax plan.

The plan would take effect almost immediately, which could increase individual earnings by $83-$166 per paycheck during the first quarter of the year.

It’s Obama’s belief that a permanent tax break like the one he plans to put into place would stimulate the economy and increase spending from lower to middle-income workers because they’d be reassured that the tax break savings would be there every year.  Obama’s top adviser David Axelrod spoke on the matter Sunday on “Meet The Press,” pointing out that “this new plan will include a portion of a tax cut that will become part of the permanent tax cut [Obama will] have in his upcoming budget.”

As part of his ‘Make Work Pay’ plan, this particular objective will apply to individuals making $75,000 or less annually and families making $150,000 or less annually. Individuals who qualify should expect to see $500 per year come back, while couples will see returns of $1000 per year. Those making between $75,000 and $85,000, or couples making between $150,000 and $170,000, will receive a partial credit.

And since the tax returns will be refundable, even low-income workers without any tax liability will be able to receive a break.

In addition, Obama plans to drop President Bush’s tax cut plans for the upper class. Axelrod spoke on this issue as well on “Meet The Press,” saying,” Whether it expires or whether we repeal it a little bit early, we’ll determine later, but it’s going to go. It has to go.”

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