Tax Rebate Check Coming?

[fondybrewfan]

Here is what I understand so far

 

As part of the economic stimulus package congress has just agreed on some sort of tax rebate that will happen later this year

 

If you made over $3,000 last year and made under $75,000 as an individual or $150,000 as a family you are eligible.

 

Each earner would get a $300 tax rebate check plus families with children get an additional $300 up to a maximum total of $1,200.

 

Certainly this could help some people and perhaps put additional funds into the economy (they are hoping people spend rather than save) but where exactly is the government getting money to do this?

 

 

Link: http://news.yahoo.com/s/ap/20080124/ap_on_go_co/economy_stimulus

[splitterpfj]

1. The government does not have the money to do this, which seems to be how it works these days.

 

2. These checks will be distributed in June, unless a change is made to the current arrangement, don't stand by your mailbox in the cold.

[dadofandrew]

Many folks will spend it right away though. Add that to tax refunds, it may well boost the spending enough to matter.

 

Jim Cramer suggested yesterday to "just buy any retailer", before the market went up 300 points. Banks, home builders, and retail have all been beat down so much, they are (were?) artificially low.

 

And in times of less than robust growth, gov't deficits is generally accepted as sound econ.

[homer]

Even if people save the money it still helps the economy. The only way it won't is if they cash the check and keep it under their mattress.

 

Frankly, I'd rather they pay down debt instead of doing this.

[Patrick425]

If you made over $3,000 last year and made under $75,000 as an individual or $150,000 as a family you are eligible.

Ok, this makes a lot more sense. Last week, when Bush first announced this, I read that threshold for individuals would be $85K and for married couples it would be $110K. Only the government would calculate 85+85 as equaling 110.

[olsonnet]

I see a lot of people getting excited at the prospects of getting these checks, but keep in mind that this is definitely not "free money". Any rebate check you get this year will be either deducted from the refund you'd get from your 2008 taxes, or added to the amount you have to pay on your 2008 taxes. They are basically just giving you money to spend now to help the economy, but they'll get it back when you pay your taxes in April 2009.

[fondybrewfan]

I see a lot of people getting excited at the prospects of getting these checks, but keep in mind that this is definitely not "free money". Any rebate check you get this year will be either deducted from the refund you'd get from your 2008 taxes, or added to the amount you have to pay on your 2008 taxes. They are basically just giving you money to spend now to help the economy, but they'll get it back when you pay your taxes in April 2009.

How sure are we that that is actually the case? I havent seen any articles that said we would basically be paying this back in 2009. Maybe well have to report it as income but the word rebate doesn't imply at all that we are going to have to pay the government back.

[OglivieHomePerm]

When tax rebates were issued in 2001, you needed to claim that as income on your next tax filing, but that is quite different than "Paying it back".

[RyDogg66]

I'll be using mine to pay down debt. I suppose that is helping stimulate the economy...it gets more money into the hands of the credit card companies.

[PeaveyFury]

Now being reported as $600/person, $1,200/couple, and $300/in addition per child.

[PlayerHader]

I'm a college student listed as a "dependent" of my parents when it comes to taxes. I made probaly 8,000 dollars last year. Do I get a check or does that go to the folks?

[DHonks]

As for the economics of it, it makes sense. There are three ways to stimulate the economy. Increasing gov't spending and increase consumer spending are two of them.

 

This rebate plan should help quite a bit.

 

As for deficits, they don't matter at all. Our deficits have been fine in recent years. As for where they'll get the money, they'll get it from wealthy folks, corporations, etc, when they finance the debt through T-bills, T-notes, etc. In Economics, you're taught that the way you get out of a recession is to spend your way out of it.

[MHgb]

I will likely end up spending half, saving half.

[SeriesFinale]

Didn't they have to borrow from social security last time they did this? Serious question.

[bullox]

What do you mean they don't have enough money? We are talking about the Federal Reserve, the largest counterfeit operation in the world. They can (and seem to) print money if and when they feel like it, damn the repercussions.

[wallus]

I am a college student but have paid significant taxes the last two years... would I be eligible?

[fondybrewfan]

As long as you made $3,000 last year you should be eligible. I havent read anything saying you cant get anything if you are a claimed as a dependent by your parents

[davego]

Most of the $ will come from Foreign banks. The current deficit spending and debt for that matter doesn't include any of the $2 trillion from the current war(s). Be that good policy or not, the American people are not (no have they been in a long time) told what the current obligations are. Eventually, this is a drag on the macro-economics of a nation. I would respectfully submit the only way to successfully 'spend' our way out of a recession would be to pay down debt/deficits once the economy rebounds. There is a limit to how much Federal paper others will hold.

[jazzytrav]

So will this be something that I have to claim when I do my taxes for '07? Or does it just come separately in the mail?

 

I'm so skeptical right now because I don't understand the concept of free money. There has to be a catch somewhere. Is there an equation/scale out there that would allow us to figure out our rebate?

[fondybrewfan]

So will this be something that I have to claim when I do my taxes for '07? Or does it just come separately in the mail?

 

I'm so skeptical right now because I don't understand the concept of free money. There has to be a catch somewhere. Is there an equation/scale out there that would allow us to figure out our rebate?

Youll have to report it on your 2008 return and pay tac according to whatever tax bracket you are in. The whole purpose of this is to get people to spend some money. When I get it will certainly either go towards paying off my car quicker or paying off credit cards,

 

I am skeptical that this is going to have a big effect butat worst maybe it will help some people catch up on some bills.

[jazzytrav]

Sorry, my question wasn't very clear. How exactly do we receive this money? Is it just a random check in the mail? Do we have to apply for it? Does it come along with my refund for the '07 tax year?

[berniebrewer4life]

I'm a poor college kid(still, ugh). I can use an extra $300-$600 anytime. I'll spend it right away on food/rent.

[hawing]

Jazzy, the last time there was a tax rebate, a check arrived in the mail; so I imagine it would be the same this time.

[RyDogg66]

This will be based off of 2007 income, right?

[bullox]

That's correct Hawing, it must have only been a couple years ago that I got a check in the neighborhood of $100 or so.