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Robert Farley
By Robert Farley February 3, 2010

Axelrod claims Democrats passed 25 tax cuts last year without the help of Republicans

With the recent Massachusetts Senate election redefining the political landscape in Washington, NBC's Meet the Press host David Gregory asked David Axelrod, a senior adviser to President Barack Obama, whether the president now needs to start moving more toward the middle.

Axelrod responded that Republicans and Democrats ought to be working together on ways to stimulate job growth, but he said Republicans have not gotten on board even when it comes to tax cuts that Republicans have traditionally supported.

"We passed without, frankly, the help of the Republican caucus, we passed 25 tax cuts last year, mostly aimed at the middle class and small businesses," Axelrod said.

We were intrigued by the claim that Democrats passed 25 tax cuts last year, so we contacted the White House press office and asked for a list. And they gave us one, all from the economic stimulus package championed by Obama and signed on Feb. 17, 2009.

We checked them out, provided sections and page numbers in the stimulus for reference, and added a brief explainer for some. If your eyes glaze over midway through, feel free to skip ahead to the bottom of the list where we'll pick up our analysis.

Individual Tax Cuts:

1. "Making Work Pay" Tax Credit (Sec. 1001, Page 195). In tax years 2009 and 2010, the Making Work Pay provision will provide a refundable tax credit of 6.2 percent of earned income up to $400 for individuals and up to $800 for married taxpayers filing joint returns.

2. Increase in the Earned Income Tax Credit (Sec. 1002, Page 198). Go to the stimulus bill for all the details, but it essentially expands this benefit for the working poor.

3. Increased Eligibility for the Refundable Portion of Child Credit (Sec. 1003, Page 199). In 2009 and 2010, families who don’t earn enough to pay income tax would be eligible to claim the $1,000 child credit.

4. "American Opportunity" Education Tax Credit (Sec. 1004, Page 199). Increases the Hope Scholarship Credit to $2,500.

5. Refundable First-time Home Buyer Credit. (Sec. 1006, Page 202). This extended and increased the first-time home buyer tax credit from $7,500 to $8,000.

6. Temporary Suspension of Taxation of Unemployment Benefits (Sec. 1007, Page 203). This exempts from taxable gross income the first $2,400 of unemployment benefits.

7. Tax Credits for Energy-Efficient Improvements to Existing Homes (Sec. 1121, Page 208). This provides up to a $1,500 tax credit for qualified energy efficiency improvements.

8. Sales Tax Deduction for Vehicle Purchases (Sec. 1008, Page 203). This allows people to write off state and local sales taxes related to the purchase of a new vehicle costing up to $49,500.

9. Premium Credits for COBRA Continuation Coverage for Unemployed Workers (Sec. 6432, Page 348)

10. Economic Recovery Credits to Recipients of Social Security, SSI, Railroad Retirement and Veterans Disability Compensation Benefits (Sec. 2201, Page 336). This was a $250 payment for senior citizens, disabled veterans and disabled people living on Social Security benefits.

11. Computers as Qualified Education Expenses in 529 Education Plans (Sec. 1005, Page 202). This allows college students to write off the expense of computers and software, provided it's for educational purpose and not for games.

12. Plug-in Electric Drive Vehicle Credit (Sec. 1141, Page 212). Allows purchasers of plug-in electric vehicles to write off up to $5,000 of their purchase (depending on the power of the battery).

13. Tax Parity for Transit Benefits (sec. 1151, Page 219). This relates to an increased exclusion amount for commuter transit benefits and transit passes.

14. Health Coverage Tax Credit Expansion (Sec. 1899, Page 309).

Small Business Tax Cuts:

1. Extension of Enhanced Small Business Expensing (Sec. 1202, Page 221). This is a temporary increase in limitations on expensing some depreciable business assets.

2. 5-Year Carryback of Net Operating Losses for Small Businesses (Sec. 1211, Page 221).

3. Extension of Bonus Depreciation (Sec. 1201, Page 220). This extends by a year election to accelerate the AMT and Research Credits in lieu of bonus depreciation.

4. Exclusion of 75% of Small Business Capital Gains from Taxes (Sec. 1241, Page 228).

5. Temporary Small Business Estimated Tax Payment Relief (Sec. 1212, Page 222).

6. Temporary Reduction of S Corporation Built-In Gains Holding Period from 10 Years to 7 Years (Sec. 1251, Page 228).

Other Business Tax Cuts:

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1. Advanced Energy Investment Credit (Sec. 1302, Page 231). This relates to properties designed to reduce greenhouse gas emissions, such as those that produce
energy from the sun, wind, geothermal deposits, fuel cells, microturbines, or an energy storage system for use with electric or hybrid-electric vehicles.

2. Tax Credits for Alternative Refueling Property (Sec. 1123, Page 211). This is a temporary increase for alternative fuel vehicle refueling businesses.

3. Work Opportunity Tax Credits for Hiring Unemployed Veterans and Disconnected Youth (Sec. 1221, Page 223). This is a tax credit to provide incentive to businesses to hire unemployed veterans and "disconnected youth." That latter term is defined, in part, as young adults "not readily employable by reason of lacking a sufficient number of basic skills."

4. Delayed Recognition of Certain Cancellation of Debt Income (Sec. 1231, Page 224).

5. Election to Accelerate Recognition of Historic AMT/R&D Credits (Sec. 1201, Page 220).

Grand total: 25.

In all, tax cuts amounted to about a third of the cost of the $862 billion stimulus over the next decade. The biggest ticket tax cut was the first one on the list, the Making Work Pay tax cut that is expected to cost the government about $116 billion over two years. Interestingly, the White House did not include the Alternative Minimum Tax patch, which has been extended annually for years. But that accounted for another $70 billion for one year. Together, those two items account for the lion's share of the tax cuts in the stimulus.

Which leads us to the question of whether all of these 25 qualify as tax cuts?

"In a way this reminds me of Clinton's 'It depends on what your meaning of is is' comments," said Rosanne Altshuler, director of the nonpartisan Tax Policy Center. "It depends on what you mean by tax cuts."

"These are all provisions that cut your taxes," she said, "but most of them are temporary," designed to stimulate a floundering economy.

Each of the tax provisions in the stimulus could have been broken into separate bills, said Bob Williams, also of the Tax Policy Center, and on their own could have rightly been billed as separate tax cuts.

"They packed an awful lot into that bill," Williams said. "I think it's fair to say that various tax provisions in the stimulus could be considered tax cuts. I don't think that's being deceptive."

We agree.

But there's one other element of Axelrod's claim, that the tax cuts were passed without the help of Republicans.

The stimulus passed the House with nary a Republican vote. And it passed the Senate with just three (though we note that one of them, Arlen Specter of Pennsylvania, is now a Democrat).

So it's certainly fair to say the stimulus passed without the help of the Republican caucus. We find Axelrod's statement True.

Our Sources

MSNBC, Transcript for "Meet the Press," Jan. 31, 2010

HR 1, American Recovery and Reinvestment Act of 2009, the economic stimulus

Conference Report to Accompany H.R. 1, American Recovery and Reinvestment Act of 2009,

Bloomberg, "Individual Income Tax Credit Is Biggest Chunk of Stimulus," by Nicholas Johnston and Brian Faler, Feb. 14, 2009

PolitiFact, "Republicans opposed Obama's stimulus but not tax cuts," by Robert Farley, March 9, 2009

CNN, "Stimulus package en route to Obama's desk," by Ted Barrett, Dana Bash, Lisa Desjardins, Evan Glass, Mark Preston and Deirdre Walsh, Feb. 14, 2009, Making Work Pay Questions and Answers: General Issues

New York Times, "House Passes Stimulus Plan With No G.O.P. Votes," by Jackie Calmes, Jan. 28, 2009

Interviews with Rosanne Altshuler and Bob Williams of the Tax Policy Center,  Feb. 2, 2010

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Axelrod claims Democrats passed 25 tax cuts last year without the help of Republicans

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