Raising Taxes to Appease Republicans?

February 12, 2009 | Last updated: July 31, 2020

It’s been well-reported by now: The final stimulus package includes a $400 tax rebate for individuals and an $800 tax rebate for couples — down a bit from the $500/$1,000 rebate strategy envisioned by the Obama administration and included in both the House and Senate bills.

The curious thing is that, as House Speaker Nancy Pelosi’s (D-Calif.) office describes it, the rebates were reduced at the request of GOP negotiators.

“To gain the support of the needed Senate Republicans, the amount of Make Work Pay Tax credit has been scaled back, the [alternative minimum tax fix] has been added, and several business tax incentives have been added (cancellation of debt income),” the speaker’s preliminary summary reads.

To which we say, “Huh?”

It might just be that the provision targeting the alternative minimum tax — which would otherwise hit millions of upper-middle class families — took precedent over the rebates, which target lesser-income folks. But insights are welcome…