Pres Obama Announces Tax Cuts As First Part of American Recovery and Investment Act

President Obama announced today that he has directed the Treasury Department to reduce employee withholding taxes as part of the American Recovery and Investment Act. He estimates that average family will take home $65 more because of it. He discussed it in his address below:

Among the tax benefits according to the Recovery Act include the Making Work Pay Credit. Working individuals will either receive the less of:

(1) 6.2 percent of earned income of the taxpayer, or

(2) $400 ($800 in the case of a joint return).

If income exceeds $75,000 or $150,000 joint than the credit will be reduced by 2% of the taxpayer's modified adjusted gross income.

There are also other provisions to reduce the marriage tax, increase the child tax credit, increase the first-time homebuyer tax credit, and reduce the impact of the Alternative Minimum Tax.

You can read the full text of the American Recovery and Investment Act.