Health Reform and the Recovery Act: Unprecedented Tax Cuts for the Middle Class
04:20 PM EDT
It’s that time of year where we’re all filling out our tax forms to get them in under the deadline, so we thought it would be worth taking a step back and looking over how two of the President’s top priorities – health reform and the Recovery Act – are helping to give a little relief to middle class families. While some critics and media outlets may want to mislead the public, or cherry-pick provisions to give another impression, there is no debating the fact that making the tax code more fair for the middle class, and helping working families get through these tough economic times has been the central plank of the President’s agenda.
Health Reform: The health reform legislation signed into law by President Obama includes the largest health care tax cut in history for middle class families, helping to make insurance much more affordable for millions of families. Here’s a more extensive list of how health reform helps ease the financial burden on the middle class:
- The largest health care tax cut in history for middle class families.
- Americans buying the same coverage they have today in the individual market will see premiums fall by 14 to 20 percent compared to what they would pay without health insurance reform and by as much as 3% for those who get coverage through their employers.
- The Small Business Health Care Tax Credit can cover up to 35 percent of the premiums a small business pays to cover its workers. In 2014, the rate will increase to 50 percent
- Reduces out-of-pocket expenses so insurance doesn’t still leave families holding the bag
- Bans lifetime limits on coverage
The Recovery Act: As the President noted in his last Weekly Address, you can get a good handle on how the Recovery Act might help you out on your taxes through our Tax Savings Tool. Here’s a glance at how the numbers break down nationwide:
- Over $160 Billion - Tax relief provided through the Recovery Act so far to families and businesses.
- Nearly $3,000 - The record average tax refund taxpayers are seeing this tax season, something the IRS says is largely due to the Recovery Act.
- Nearly 10% - The percentage average tax refunds are up this year - something the IRS says is largely due to Recovery Act tax credits.
- 95% - The percentage of working families benefiting from the Recovery Act's Making Work Pay tax credit, making it the broadest tax credit in the history of the country.
- $800 - The amount most married couples are collecting through their paychecks this year thanks to the Recovery Act's Making Work Pay tax credit. Individuals collected $400 this year thanks to Making Work Pay.
- Up to $2,500 - The expanded amount eligible taxpayers can collect with the American Opportunity Credit to help cover college expanses thanks to the Recovery Act.
- Up to $8,000 - The amount new homebuyers can collect this year for purchasing their first home thanks to the Recovery Act's expansion of the First-Time Homebuyers Tax Credit.
- Up to $1,500 - The amount homeowners can collect this year on improvements made to their homes like energy-efficient windows, doors and insulation thanks to Recovery Act tax credits.
- 65% - The amount by which the Recovery Act cut the cost of COBRA health insurance premiums for unemployed workers last year through an up-front tax credit.
Dan Pfeiffer is White House Communications Director