President Bush is suggesting a $145 billion rebate to taxpayers in order to stimulate the economy and avoid economic recession in 2008. About $100 billion is reserved for individual tax payers and the rest is for businesses.
This could come to the masses in the form of a $800 tax rebate check for each individual or $1,600 per household. However, a tax rebate may not be the best way to get money into the hands of who will spend it (and stimulate the economy as intended). Many who have a lower income and an inability to save thanks to (for whatever reason) paycheck-to-paycheck living conditions do not pay taxes, and would receive no rebate. If the government wants to get money into the hands of people who will spend and stimulate the economy rather than save, then it should somehow include these individuals.
If I receive a rebate check, I won’t stimulate the economy. I’ll put it in the bank and use it towards my 2007 tax bill. I’m sure most readers of Consumerism Commentary will do the same or pay off debt. A smaller portion will use the funds to buy something they’ve been eying or go on vacation, but not many. Get the “economic stimulus” to those who will stimulate the economy.
Here are some articles from around the web.
Speaking of tax rebate checks, Mighty Bargain Hunter will save his check for later. Eloquently, “It’s like a bar offering one on the house at last call. Everyone’s happy for another 20 minutes, and then people get to stagger home and wake up the next morning, hung over, to face the stress and the weight of payments that remained in the background while they were forgetting about life for a while.”
Nickel wonders how much top tip a cab driver.. He received a cold shoulder the other day after tipping 20 percent, and he doesn’t know why. Was it the amount? I think 20% for a cab driver is more than fair, but I don’t travel by taxi often. There’s an interesting discussion in the comments; there are always strong opinions surrounding the art and necessity of tipping.
Wise Bread offers an interesting article about inflation. Rising prices is just a symptom of inflation, not the definition. Prices fluctuate due to forces other than inflation, as well. Philip argues that on the whole, standard of living is decreasing. “It’s always hard to tell the difference among these things at the time; it only becomes clear after the fact. Fortunately, you can keep yourself on the right track by making the most cautious choices. If prices go up, look for alternatives. When there are no alternatives, buy less.”
Single Ma is charting the course for her next career move. I’m contemplating some changes at the office as well, so perhaps there will be more news as that plays out in the next few weeks. Single Ma has selected four leadership and management courses to attend.
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Maybe you were a bit too straightforward there, Flexo ;) My husband and I were just talking about this, and laughing at the notion that giving us a rebate would stimulate the economy. I’m pretty happy about it, though, as our taxes are going to be higher than normal this year. I do think that those who will profit from the rebate are a smaller bunch than those who will think of it as free money to spend.
I’ll stimulate the economy alright. Saving will provide reserves so the big banks can loan money for consumers to spend and investing will provide capital so the big business can expand and create jobs. :-)
BTW, thanks for including me in the roundup.
This is incorrect. Any individual who receives a paycheck and earned above $3,000 and below $75,000 in 2007 will received a check; even if they did not pay taxes. These people will almost certainly spend the money immediately.
Just curious if anyone has heard more details than me about the economic stimulus plan. I haven’t found any PDF files or anything in writing with the proposal as written verbatim. Mostly, I would like to know if I file my taxes say… today (before the finalization of the bill), will I still reap the benefits further down the road. Basically, will I get 2 seperate checks or will I be penalized for not waiting and receive only my normal rebate and not an additional one in early summer?
more then likely I am going to use the money to pay off some student loans but agree that it’s a stupid move to give the money to the middle class instead of the poor if you want to stimulate the economy.
of course if you are trying to get voters to like you or your party then it might be the smart move
The IRS and CNN is reporting this “Rebate” as a tax advance against our 2009 taxes. From the IRS site: “The Administration and Congress have announced an economic growth package that would provide advance payments to many Americans.” A rebate is a return on current taxes paid, but an advance means that NEXT year we will have our refunds lowered by this “Rebate” amount or will have to pay it. Anyone else heard anything on this…if so, the media needs to be shot for calling it a REBATE if it’s really an ADVANCE. And everyone needs to realize that NEXT year, you will be really messed up on your taxes…
Karen: Thanks for the update. At the time of writing, the proposed solution was not an advance, but now that the bill has passed the Congress, it is an advance. Bush still has to sign the bill into law.
So, if i received $3500 refund this year, should get around that next year for my husband and 2 kids filing, in a few months if all goes as proposed, i’ll receive $1800 for an advance, does that mean i’ll only receive $1700 next years refund?
Mary: No, you’ll receive your usual $3,500 next year (all other things being equal).
I AM THINKING ALONG THE SAME LINES. IRS
SAYS THE REBATE WILL NOT BE TAXED AS INCOME, BUT IS THIS SO CALLED CREDIT GOING
TO BE ADDED ON TO OUR 2008 TAX LIABILITY ??
MANY SENIORS WILL BE SHOCKED IF IT IS.
MANY ARE FILING FED RETURNS EVEN IF NOT
REQUIRED.
As of July 11 2008 we have not received a rebate. can’t even find out about it.
How many out there are on the “Schedule” to have already received the rebate and have heard nothing at all