Stimulus.org - IRS

Other Investment and Tax Incentives

Jason Peuquet — Fri, 07 Jan 2011 16:23:09 +0000

Date:

December 17, 2010

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Economic Target:

Manufacturers

Economic Target:

Other Business

Action Type:

Tax Break

Maximum Amount:

156808000000

Deficit Impact:

77178000000

The 2010 tax cut package included a provision that would temporarily allow businesses to immediately write off the costs of equipment for the next two years. In addition, the package included a number of tax extenders that provide various targeted benefits.

Source:

CBO Cost Estimate

Notes:

Maximum amount represents peak cost of these provision in the ten-year window. Deficit impact represents net costs of these provision from 2011-2020. Because the cost of the business expensing will be partially recouped after it expires, there is a significant difference between these two numbers.

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Estate Tax Change

Jason Peuquet — Fri, 07 Jan 2011 16:20:14 +0000

Date:

December 17, 2010

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Economic Target:

Other

Action Type:

Tax Break

Maximum Amount:

68149000000

Deficit Impact:

68149000000

The tax cut package included a lower estate and gift taxes for the next two years, providing a higher exemption threshold and a lower rate for estate and gift transfers beyond that threshold. The exemption was raised to $5 million and the rate set at 35 percent, compared to a $1 million exemption and 55 percent rate as previously scheduled under current law for 2011 and lower than the Administration's initial proposal of a $3.5 million exemption and a 45 percent tax rate beyond that.

Source:

CBO Cost Analysis

Notes:

Maximum amount and deficit impact represent peak and net cost of this provision--which are the same--from 2011-2020.

CRFB Analysis of Estate Tax Options and Costs

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Payroll Tax Holiday

Jason Peuquet — Fri, 07 Jan 2011 16:13:09 +0000

Date:

December 17, 2010

Who:

IRS

Who:

Various Agencies

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Tax Break

Maximum Amount:

111653000000

Deficit Impact:

111653000000

The tax cut package included a one-year payroll tax cut of two percentage points on the employee side of the FICA tax, reducing the tax for employees from 6.2 percent to 4.2 percent.

Source:

CBO Cost Estimate

Notes:

Maximum amount and deficit impact represent the peak and net cost of this provision--which are the same--from 2011-2020.

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2-Year AMT Patch

Jason Peuquet — Fri, 07 Jan 2011 16:07:01 +0000

Date:

December 17, 2010

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Tax Break

Maximum Amount:

136676000000

Deficit Impact:

136676000000

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act included a two-year "patch" of the Alternative Minimum Tax (AMT).

Source:

CBO Cost Estimate

Notes:

Maximum amount and deficit impact represent the peak and net cost of this provision--which are the same--from 2011-2020.

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2-Year Extension of 2001/2003 Tax Cuts

Jason Peuquet — Fri, 07 Jan 2011 16:04:32 +0000

Date:

December 17, 2010

Who:

IRS

Economic Target:

Consumers

Economic Target:

Other Business

Action Type:

Tax Break

Maximum Amount:

407640000000

Deficit Impact:

407640000000

The 2010 tax cut included a two-year extension of all the provisions from the 2001/2003 tax cuts.

Source:

CBO Cost Estimate

Notes:

Maximum amount and deficit impact represent gross and net cost, respectively, of this portion of the bill from 2011-2020.

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Tax Credit Bonds

Jason Peuquet — Fri, 19 Mar 2010 15:24:13 +0000

Date:

March 18, 2010

Who:

IRS

Policy Area:

Other

Economic Target:

Other

Action Type:

Tax Break

Maximum Amount:

2291000000

Amount Spent:

2291000000

Deficit Impact:

-160000000

The Hiring Incentives to Restore Employment Act included tax credits on qualifying bonds.

Also included in the Hire Act were provisions creating incentives for hiring unemployed workers.

Source:

CBO Cost Estimate of Hire Act

White House Release on the Act's Passage

Notes:

Maximum amount reflects the lost revenue from the tax provisions over a 10-year period. Deficit impact reflects the total net cost of the provision in proportion to the total net cost of -$1.1 billion for the bill. Offsets totaled $16.7 billion, stemming largely from foreign account tax compliance and a delay in implementing worldwide interest expense allocation until 2020.

Amount spent unknown.

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Incentives for Hiring Unemployed Workers

Jason Peuquet — Fri, 19 Mar 2010 15:19:31 +0000

Date:

March 18, 2010

Who:

IRS

Economic Target:

Other

Action Type:

Tax Break

Maximum Amount:

12958000000

Amount Spent:

12958000000

Deficit Impact:

-660000000

The Hiring Incentives to Restore Employment Act included several tax provisions aimed at providing tax breaks for companies and organizations that hire previously unemployed workers. The bill excludes employers from paying the 6.2 percent in federal payroll taxes for the rest of 2010 on new employees they hire who have been previously unemployed for over two months. The bill also allows employers to receive a $1,000 tax credit for each of these new hired employees if they are still with the same employer after a year.

On August 2, 2010, the Treasury Department announced that 5.6 million employees hired between February and June were eligible for the tax credit.

Also included in the Hire Act were provisions for qualifying tax credit bonds.

Source:

CBO Cost Estimate of Hire Act

White House Release on the Act's Passage

Notes:

Maximum amount and amount spent reflect the lost revenue from the tax provisions over a 10-year period. Deficit impact reflects the total net cost of the provision in proportion to the total net cost of -$1.1 billion for the bill. Offsets totaled $16.7 billion, stemming largely from foreign account tax compliance and a delay in implementing worldwide interest expense allocation until 2020.

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IRS Exempts Citigroup from Tax on Repurchase of TARP Assets

Jason Peuquet — Wed, 16 Dec 2009 19:26:28 +0000

Date:

December 11, 2009

Who:

IRS

Who:

Treasury

Policy Area:

Financial Sector Policy

Economic Target:

Citigroup

Action Type:

Tax Break

Maximum Amount:

38000000000

Amount Spent Special Symbol:

Deficit Impact Special Symbol:

The IRS agreed to give up billions in tax money in exchange for Citigroup’s repurchase of $20 billion of its assets held by TARP.

Following long-standing carryback loss rules, federal tax law permits companies to reduce their taxable incomes in profit-earning years by the amount of losses in bad years. Under the law, the IRS, which is part of the Treasury, restricts the transfer of these benefits to new ownership, in the case of a merger, as a way of preventing companies from buying unprofitable firms to evade taxes. As the law exists, Citi’s repurchase of assets held by the Treasury would qualify as a change in ownership, and thus exclude Citi from the tax benefit.

Since Citi has built up $38 billion in losses, the IRS notice exempts up to $38 billion in future Citi profits from taxable income.

This IRS ruling adds to the list of methods in which the Treasury, FDIC, and Fed have supported Citi. Click to see companion programs under TARP (Capital Purcahse Program and Targeted Investment Program), FDIC Gaurantee of Citigroup Assets, and Fed Guarantee of Citigroup Assets.

Source:

Washington Post article 12/16/2009

Notes:

According to a Washington Post article, the exact value of the IRS ruling will depend on Citi’s future profits and other factors. But accounting experts estimated that Citi will save at least several billion dollars. Some experts have also said that the lost tax revenue could easily outweigh the profits the Treasury will likely make in selling its ownership stake in Citi.

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Increase in Low-Income Housing Tax Credit

Jason Peuquet — Wed, 11 Nov 2009 21:56:45 +0000

Housing Starts

Date:

July 23, 2008

Who:

IRS

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Housing

Action Type:

Tax Break

Maximum Amount:

11771000000

Amount Spent:

7630000000

Deficit Impact:

7630000000

This measure increased in 2008 and 2009 the per capita amount of the low-income housing tax credit allocable by each state. In addition, the new rule ignored the distinction between new buildings and existing buildings, allowed buidling receiving moderate rehabilitation assistance to dually qualify for the low-income housing credit, and extended the credit to some eligible students.

The measure was passed as part of the Housing and Economic Recovery Act of 2008, along with the first-time homebuyers tax credit, community housing grants, and the HOPE for Homeowners Program.

Source:

Housing and Economic Recovery Act of 2008

Notes:

Maximum amount reflects the peak cumulative cost of the provision over the 2008-2018 period. Amount spent and deficit impact reflect CBO's estimated ten-year budget impact of the provision (http://www.cbo.gov/ftpdocs/95xx/doc9597/hr3221.pdf).

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Tax Credit for First-Time Homebuyers

Jason Peuquet — Wed, 11 Nov 2009 21:41:41 +0000

Housing Starts

Date:

July 23, 2008

Who:

IRS

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Housing

Action Type:

Tax Break

Maximum Amount:

4648000000

Amount Spent:

4648000000

Deficit Impact:

4648000000

This measure provides a $7,500 tax credit for some qualifying first-time homebuyers. The credit will be claimed on tax returns to reduce the home-purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.

The measure was passed as part of the Housing and Economic Recovery Act of 2008, along with an increase in the low-income housing tax credit, community housing grants, and the HOPE for Homeowners Program.

See the extension of the homebuyer tax credit in the American Recovery and Reinvestment Act and again in the Worker, Homeownership, and Business Assistance Act of 2009.

Source:

Housing and Economic Recovery Act of 2008

Notes:

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Net Carryback Loss Extension and Expansion

Jason Peuquet — Fri, 06 Nov 2009 22:05:04 +0000

Date:

November 6, 2009

Who:

IRS

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Other Business

Action Type:

Tax Break

Maximum Amount:

33197000000

Amount Spent:

33197000000

Deficit Impact:

59000000

This provision would reduce corporate taxes by extending net operating loss carryback rules under the stimulus act from two to five years. This means that, for the purpose of taxation, businesses will be able to subtract losses in 2008 and 2009 from profits over the last five years - and in turn recieve a tax refund. A measure in February's American Recovery and Reinvestment Act increased the carryback loss period from two to five years for small businesses, but this rule now applies to companies of all sizes.

The provision was passed as part of the Worker, Homeownership, and Business Assistance Act of 2009 along with an extension of the homebuyer tax credit and of unemployment benefits.

The provision would cost $33 billion in 2010. However, because it largely defers rather than reduces taxes, it would cost closer to $10 billion over a ten year period. And this cost would be offset -- mainly by delaying, until 2018, a rule to allow the worldwide allocation of interest for the purposes of taxation.

Source:

JCT: Worker, Homeownership, and Business Assistance Act of 2009

CBO: Worker, Homeownership, and Business Assistance Act of 2009

Notes:

Maximum amount reflects the peak total loss in government revenue. Deficit impact based on CBO calculation of ten-year deficit impact (http://finance.senate.gov/sitepages/leg/LEG%202009/103009_CBO_Estimates.pdf).

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First-Time Homebuyer Tax Credit Extension and Expansion

Jason Peuquet — Fri, 06 Nov 2009 21:29:40 +0000

Housing Starts

Date:

November 6, 2009

Who:

IRS

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Housing

Action Type:

Tax Break

Maximum Amount:

12715000000

Amount Spent:

12715000000

Deficit Impact:

61000000

This provision would further extend and expand the First Time Home Buyer Tax Credit, which was previously extended through November 30, 2009 in February's American Recovery and Reinvestment Act and was originally enacted in the Housing and Economic Recovery Act of 2008. This extension would continue the tax credit of up to $8,000 for housing deals signed by April 30, 2010 and completed by June 30, 2010. It would also expand the credit beyond first-time homebuyers by adding a $6,500 tax credit for homebuyers seeking a new primary residence. Eligible incomes for the full credit have also been modified, rising from a $95,000 or less in yearly income for individuals to $125,000. Additional rules, restrictions, and requirements apply.

The provision was passed as part of the Worker, Homeownership, and Business Assistance Act of 2009 along with an an expansion of net operating loss carryback rules and an extension of unemployment benefits.

It would cost $13 billion through 2011, although some of this would be recovered in subsequent years resulting in a ten year cost of $11 billion. These costs would be offset -- mainly by delaying, until 2018, a rule to allow the worldwide allocation of interest for the purposes of taxation.

Source:

JCT: Worker, Homeownership, and Business Assistance Act of 2009.

CBO: Worker, Homeownership, and Business Assistance Act of 2009

Notes:

Maximum amount reflects the peak total loss in government revenue. Deficit impact equals zero since costs of measure would be fully offset.

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Tax Provisions

Jason Peuquet — Tue, 03 Nov 2009 22:25:39 +0000

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Other Business

Action Type:

Tax Break

Maximum Amount:

420000000000

Amount Spent:

284500000000

Deficit Impact:

275000000000

Provisions are part of the $821 billion "American Recovery and Reinvestment Act of 2009," a set of policies designed to mitigate the effects of the economic crisis. The act contains significant tax breaks for individuals and corporations, among other spending provisions.

Source:

Analysis of the Final Bill by the Joint Committee on Taxation

Text of "American Recovery and Reinvestment Act of 2009"

Notes:

Positive numbers in table indicate spending, negative numbers indicate savings or revenue. Maximum amount is the peak cumulative cost of a provision over the period 2009-2019, though the provision may eventually cost less by 2019. Several tax provisions shift deductions for depreciation or other tax savings into the next several years. These are tax breaks that would normally be written off over a longer period of time. Much of the cost for these provisions is eventually made back in the "out" years, because it is the timing--not the amount--of an existing tax break that is being shifted. Deficit impact is the final cost of a provision from 2009-2019. Amount spent reflects CRFB calculated continuations of tax disbursal rates since last reported on Recovery.gov in December 2010 and extrapolated to the present by CRFB staff.

In the January 2010 baseline, CBO estimated that an additional $26 billion would be made available for the Build America Bond program under the Infrastructure Financing Tools of the "Other Tax Provisions" category.

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Other Individual Tax Breaks

suggp — Mon, 03 Aug 2009 14:03:23 +0000

Other Individual Tax Breaks

Date:

February 17, 2009

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Tax Break

Maximum Amount:

72000000000

Amount Spent:

53500000000

Deficit Impact:

72000000000

Provisions are part of the $787 billion "American Recovery and Reinvestment Act of 2009," a set of policies designed to mitigate the effects of the economic crisis. The act contains significant spending for direct worker assistance, infrastructure, healthcare, education, aid to states, and other areas, and tax breaks for individuals and corporations.

Other Individual Tax Breaks (in millions of dollars)
Year	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2009-2019
Health Insurance Assistance	14,302	9,206	1,493	67	0	0	0	0	0	0	0	25,069
EITC Increase	23	2,349	2,291	0	0	0	0	0	0	0	0	4,663
Child Tax Credit Expansion	0	7,489	7,342	0	0	0	0	0	0	0	0	14,830
American Opportunity Tax Credit	791	4,425	5,040	0	0	0	0	0	0	0	0	10,256
Make 40% of the allowable American Opportunity Tax Credit refundable	331	1,725	1,595	0	0	0	0	0	0	0	0	3,651
Temporarily allow computer technology and equipment as a qualified higher education expense for qualified tuition programs for 2009 and 2010	0	0	0	1	1	1	1	1	1	1	1	6
Extension of first-time homebuyer credit	1,115	3,261	-235	-38	102	680	597	514	384	164	94	6,638
Exclude up to $2,400 of unemployment insurance benefits from gross income for taxable year 2009	948	3,792	0	0	0	0	0	0	0	0	0	4,740
Sales tax deduction for purchase	424	1,269	-9	0	0	0	0	0	0	0	0	1,684
Totals	17,934	33,516	17,517	30	103	681	598	515	385	165	95	71,537

Source:

Analysis of the Final Bill by the Joint Committee on Taxation

Text of "American Recovery and Reinvestment Act of 2009"

Recovery.gov

Notes:

Maximum amount is the peak cumulative cost of a provision over the period 2009-2019, though the provision may eventually cost less by 2019. Deficit impact is the final cost of a provision from 2009-2019. Amount spent reflects CRFB calculated continuations of disbursal rates since last reported on Recovery.gov in December 2010, and extrapolated to the present by CRFB staff.

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Other Individual Tax Breaks

suggp — Mon, 03 Aug 2009 14:02:55 +0000

Date:

February 17, 2009

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Tax Break

Maximum Amount:

Amount Spent Special Symbol:

Deficit Impact:

Source:

Analysis of the Final Bill by the Joint Committee on Taxation

Text of "American Recovery and Reinvestment Act of 2009"

Notes:

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Pension Relief

suggp — Fri, 10 Jul 2009 20:01:28 +0000

Date:

December 23, 2008

Who:

IRS

Policy Area:

Financial Sector Policy

Economic Target:

Consumers

Action Type:

Regulatory Change

Maximum Amount:

2509000000

Amount Spent:

Deficit Impact:

2509000000

The Worker, Retiree, and Employer Recovery Act waives rules requiring individuals to make an annual withdrawal from their retirement accounts for one year, and reduces funding requirements for certain defined pension benefits.

Source:

Worker, Retiree, and Employer Recovery Act of 2008

Notes:

Max Amount and Deficit Impact represent ten year numbers. Program makes money is year one due to timing shift.

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Housing Tax Credits

suggp — Fri, 10 Jul 2009 19:55:06 +0000

Date:

July 1, 2008

Who:

IRS

Policy Area:

Sector Policy (Non-Financial)

Economic Target:

Housing

Action Type:

Tax Break

Maximum Amount:

17450000000

Amount Spent:

12280000000

Deficit Impact:

12280000000

The Housing and Economic Recovery Act of 2008 included several stimulative housing measures, including an increase in the low-income housing tax credit and created the first-time homebuyer tax credit.

Source:

Housing and Economic Recovery Act of 2008

Notes:

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Other Tax Provisions

Maya MacGuineas — Fri, 10 Jul 2009 18:57:48 +0000

Other Tax Provisions

Date:

February 17, 2009

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Other

Action Type:

Tax Break

Maximum Amount:

71000000000

Amount Spent:

21000000000

Deficit Impact:

71000000000

Other Tax Provisions (in millions of dollars)
Year	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2009- 2019
Manufacturing Recovery Provisions	1	174	297	342	217	175	182	175	148	94	47	1,850
Economic Recovery Tools	227	348	566	699	722	738	724	700	660	565	553	6,501
Infrastructure Financing Tools*	179	2,752	16,085	6,936	5,921	2,174	2,322	2,345	2,305	2,258	2,233	45,638
Energy Incentives	393	1,482	1,539	1,176	1,619	1,862	2,039	2,264	2,412	2,552	2,614	19,963
Other Tax Provisions	16	20	-147	-338	-377	-362	-341	-333	-332	-332	-332	-2,853
Total	816	4,776	18,340	7,057	8,102	4587	4926	5151	5193	5137	5

Source:

Analysis of the Final Bill by the Joint Committee on Taxation

Text of "American Recovery and Reinvestment Act of 2009"

Recovery.gov

Notes:

Positive numbers in table indicate spending, negative numbers indicate savings or revenue. Maximum amount is the peak cumulative cost of a provision over the period 2009-2019, though the provision may eventually cost less by 2019. Deficit impact is the final cost of a provision from 2009-2019. Amount spent reflects CRFB calculated continuations of disbursal rates since last reported on Recovery.gov in December 2010, and extrapolated to the present by CRFB staff.

*In the January 2010 baseline (http://www.cbo.gov/ftpdocs/108xx/doc10871/01-26-Outlook.pdf), CBO estimated an additional $26 billion would be made available for the Build America Bonds (part of the "Infrastructure Financing Tools" category above.

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Corporate Tax Breaks

Maya MacGuineas — Fri, 10 Jul 2009 18:56:45 +0000

Stimulus 2009 - Corporate Tax Breaks

Date:

February 17, 2009

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Other Business

Action Type:

Tax Break

Maximum Amount:

76000000000

Amount Spent:

32100000000

Deficit Impact:

6000000000

On 3/16/2009, the Obama administration's announcement on assistance for small business also provided an IRS guidance for the administration's small business-related tax provisions in the $787 billion February stimulus. This provision allows businesses with up to $15 million in revenue to "carry back" any losses into the five previous years. The administration also re-stated its other small-business tax breaks, including immediate write-offs of up to $250,000, reductions in estimated tax payments, extending bonus depreciation deduction, and reducing capital gains taxes on small business investors.

Corporate Tax Breaks (in millions of dollars)
Year	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2009-2019
Special allowance for certain property acquired during 2009	23,523	15,285	-8,096	-6,548	-5,607	-4,574	-3,061	-1,951	-1,225	-1225	-930	5,879
Expensing increase	642	425	-352	-222	-162	-125	-79	-45	-22	-10	-10	41
5-year carry-back for small businesses	4,741	-708	-753	-648	-486	-365	-274	-205	-154	-115	-87	947
Reduce required estimated tax payments in 2009 for certain small businesses	275	-275	0	0	0	0	0	0	0	0	0
Incentives to hire unemployed veterans	32	81	70	28	11	6	2	0	0	0	0	231
Deferral and ratable inclusion of income arising from business indebtedness discharged by the reacquisition of a debt instrument, and temporary AHYDO exception for debt exchange or modifcation	12,113	22,803	7,479	483	269	-4,948	-8,349	-8,328	-8,306	-8,285	-3,310	1,622
Special rules applicable to qualified small business stock for 2009 and 2010	-2	-6	-2	0	0	207	360	163	50	36	22	829
Temporarily reduce the S corporation built-in gains holding period from 10 to 7 years	31	154	73	32	28	19	20	16	14	13	15	415
Clarification of regulations related to limitations on certain built-in losses following an ownership change	-1,437	-1,775	-646	-261	-225	-304	-419	-457	-470	-484	-499	-6,977
Treatment of certain ownership changes of manufacturing firms for purposes of limitation on net operating loss carryforwards and certain built-in losses	0	0	19	19	181	289	289	491	625	625	625	3,163
Totals	39,918	35,984	-2,208	-7,117	-5,991	-9,795	-11,511	-10,316	-9,488	-9,445	-4,174	6,150

Source:

Analysis of the Final Bill by the Joint Committee on Taxation

Text of "American Recovery and Reinvestment Act of 2009"

IRS Guidance on Small Business 5 Year "Carryback" Tax Provision

Recovery.gov

Notes:

Positive numbers in table indicate spending, negative numbers indicate savings or revenue. Maximum amount is the peak cumulative cost of a provision over the period 2009-2019, though the provision may eventually cost less by 2019. Several tax provisions shift deductions for depreciation or other tax savings into the next several years. These are tax breaks that would normally be written off over a longer period of time. Much of the cost for these provisions is eventually made back in the "out" years, because it is the timing--not the amount--of an existing tax break that is being shifted. Deficit impact is the final cost of a provision from 2009-2019. Amount spent reflects CRFB calculated continuations of disbursal rates since last reported on Recovery.gov in December 2010, and extrapolated to the present by CRFB staff.

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Other Individual Tax Breaks

Maya MacGuineas — Fri, 10 Jul 2009 18:54:34 +0000

Date:

February 17, 2009

Who:

IRS

Policy Area:

Fiscal Policy

Economic Target:

Consumers

Action Type:

Tax Break

Maximum Amount:

Amount Spent:

Deficit Impact:

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