Washington, D.C. -— U.S. Rep. Bob Etheridge (D-Lillington), a member of the House Budget Committee, today voted for legislation that would provide 3.5 million North Carolina households with a tax rebate and help stimulate the economy.
The House approved the Recovery Rebates and Economic Stimulus for the American People Act by a vote of 385 — 35.
“The economic stimulus package is a good first step towards jump starting a sluggish economy and providing real assistance to North Carolina families,” said Etheridge. “This package will help families who are struggling to get by to be able to purchase necessities like groceries, clothing and gas.”
The bipartisan stimulus package would provide tax rebates aimed at middle- and low-income families, which economists say will help to reinvigorate the economy. Economists estimate that each dollar of broad tax cuts leads to $1.26 in economic growth.
On average, N.C. households would receive a $914 rebate under the plan, for a total of $3.2 billion across the state. Families would receive rebates in mid-May at the earliest. The legislation must still be approved by the Senate and signed by the President to become law.
Tax payers would receive up to $600 per single tax filer and $1,200 per couple, and a rebate of $300 for each child. All individuals who earned at least $3,000 would receive at least $300 per single tax filer, $600 per couple and $300 per child. The rebates begin to phase out at $75,000 for an individual and $150,000 per couple.
The legislation also includes tax cuts for small businesses. The plan doubles the amount small businesses can immediately write off their taxes for capital investments, and encourages investments in new equipment. The plan also offers immediate tax relief by speeding up depreciation provisions, so that firms can write off an additional 50 percent for investments purchased in 2008. N.C. Governor Mike Easley has raised concerns that the business tax provisions might negatively impact state budgets, and Etheridge has said he will seek modifications to the package as it moves forward to address these concerns.
Finally, the bill includes provisions to help Americans avoid home foreclosure. It increases the Federal Housing Authority’s loan limits up to $729,750, expanding affordable mortgage opportunities for families at risk of foreclosure through FHA. It also enhances credit availability in the mortgage market by including a one-year increase in the loan limits for single-family homes from Fannie Mae and Freddie Mac from $417,000 up to $729,750 for 2008.