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Yarmuth: Taxes Cut for 99 Percent of Kentuckians in 2009

(Washington, DC) Today, as American families complete their income tax returns, a new report by Citizens for Tax Justice indicates that 99 percent of Kentucky families benefitted from at least one tax cut approved by Congress this session. According to the report, working families in Kentucky received a combined average tax cut of $1,037 in 2009, attributable in part to credits included in the American Recovery and Reinvestment Act.

 

“Nearly 40 percent of the cost of the Recovery Act is being directly returned to the American people in the form of tax cuts,” said Congressman Yarmuth. “By putting money back into the pockets of middle-class Americans, we’re investing in immediate economic growth and helping families make ends meet.”

 

The report indicates tax breaks enacted by Congress and signed into law in 2009 offered relief to working Louisvillians across all income levels. All totaled, Congress has enacted over $800 billion in tax cuts, with another $285 billion already in cuts already making its way through Congress. By itself, the American Recovery and Reinvestment Act reduced federal taxes by almost $160 billion so far for families and businesses.

 

 The magnitude of the cuts has been noted by national tax policy observers, including Bruce Bartlett, a former domestic policy adviser to Presidents Ronald Reagan and George H.W. Bush, who declared that “federal taxes are very considerably lower by every measure since Obama became President.”

 

The cuts highlighted by report include the Expansion of the Earned Income Tax Credit, the Child Tax Credit, and the Making Work Pay Credit – all part of the Recovery Act.

 

Other credits, such as the American Opportunity Credit and the First-Time Homebuyers Tax Credit were also included in the Recovery Act.

 

Americans can still amend returns after April 15 to collect any credits they may have missed.

 
Tax Facts:
 

280,000 families in Louisville received an average of $534 in the form of the refundable Making Work Pay tax credit approved in the Recovery Act. Married couples collect $800 for this credit, while individuals can qualify for $400.

 

Through 2009, more than 23,000 Kentucky families filed for the First-Time Homebuyer Tax Credit, claiming more than $164 million in assistance. Included in the Recovery Act, this credit gave first-time homebuyers up to $8,000 toward the purchase of a home.

 

Taxpayers are eligible for up to $1,500 in credits for making energy-efficient improvements to their homes, including adding insulation and installing energy efficient windows.

 

Taxpayers can qualify for up to $2,500 for the American Opportunity Credit to help cover college expenses.

A copy of the report outlining tax cuts in Kentucky can be found here.