Pushed through the Congress with little debate based on claims that matters would be “catastrophic” if passage wasn’t immediate, and without an opportunity for members of the Congress to actually read the text of the legislation, the Congress passed the massive spending bill, H.R. 1, (The American Recovery and Reinvestment Act of 2009 (Act)) loaded with pork and taxpayer dollars for pet projects of politicians. While passage was swift, the signing of the Act into law was not immediate – occurring four days after the Act passed both bodies of the Congress.
The Act contains 575 pages worth of tax provisions. Many of the provisions are individual credits that will likely have little-to-no immediate stimulative effect and targeted tax benefits that appear to be so narrow as to be largely ineffective economically at the present time. That’s why it is a bit inaccurate to call the Act a “stimulus” bill. In addition, the non-tax portion of the Act contains massive amounts of spending for social programs largely unrelated to the economy. To facilitate the massive spending contained in the Act (it is the largest spending bill in U.S. history), the Act raises the U.S. debt limit to over $12 trillion. Unfortunately, from an economic standpoint, history indicates that the governmental borrowing and printing of money necessary to facilitate the massive spending of the Act will likely result in inflation in the not-too-distant future. To illustrate the massive spending unrelated to the economy contained in this legislation, we will summarize the most pertinent provisions in a separate article.
For now, here’s a summary of the major tax provisions of the Act, H.R. 1, Pub. L. No. 111-5.