The "Stimlulating" Tax Rebate

[Zamboni_Driver]

Not really true, Zamboni. We were actually in a surplus at the end of the Clinton administration. It's kind of funny, but the GOP likes to present the image of fiscal conservatism, but take a look at some of the facts regarding the federal debt in relation to presidential terms.

Some thoughts:

1. I wasn't just talking about changes at the presidential level, but also at the congressional level. Every time control changes at congress there is another change in policy that leads to debt.

2. I believe you make my point. After Clinton there was a surplus. Now there is not. Following Bush's plan and there will be a surplus in a few years. A new change or resistance from Congress and that will not happen.

To oversimplify their economic strategies.

Democrats: Tax the corporations and rich and redistribute the money.

Republicans: Allow corporations to prosper and incomes will raise and provide more taxable income.

When there was a surplus as Bush took over, they see that as made on the backs of the people, with unfair taxes. They believe give the money back that will lead to prosperity and then we can tax it to get even more (people get more and so does the government).

Now let me project. Let's allow a Democratic President and Democratic Congress to take over. They might reverse the tax exemptions on corporations and tax the rich. They will show how this provides more money - which they will give out to groups that have had their funding cut during Bush years. Before the money comes in from the tax changes they'll take out a loan to cover. Again, oversimplification for the purposes of a post, but hopefully you can see my opinion.

If not, just think about why do pork barrel items never go away?

[Johnnielax13]

Not really true, Zamboni. We were actually in a surplus at the end of the Clinton administration. It's kind of funny, but the GOP likes to present the image of fiscal conservatism, but take a look at some of the facts regarding the federal debt in relation to presidential terms.

http://en.wikipedia.org/wiki/National_d ... tial_terms

Lots of interesting numbers. Every Republican's favorite poster child - Ronald Reagan - sent federal spending skyrocketing through the 80's, with a huge increase in the debt.

Some numbers that summarize things - from 1978 to 2005:

Under Democratic administrations - Increase in federal spending - +9.9% Increase in federal debt - 4.2%.
Under Republican administrations - Increase in federal spending - +12.3% Increase in national debt - 36..6%

So who are the free-spending credit-card bingers, while harping about the tax-and-spend opposition?

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-Michael Scott
Season 3
"The Negotiotion"

[Zeuslax]

Maybe I'm missing the boat here. This strategy was put on the table via another brilliant strategic move by the White House. It's being held up right now (to the disdain of Republicans) because the Dem's want to limit the richest 1% getting a check for 600 dollars.

Small economic stimulas can work, especially when it is provided to the poorest segments of the population. They have to spend thier money and don't have the option to sit on 300 dollars and save it for their kids. It's an instant injection of cash into the system. Wesly Clark talked a lot about this during his campaign, but it's a taboo subject and flys in the face of standard practice.

Who knows though maybe Warren Buffet and Brangelina really need a new pair of shoes? I saw a picture of Suri Cruise yesterday and she was wearing a 700 dollar faux fur coat. Maybe she needs another one for the second Tuesday of next week?

[Sonny]

Maybe I'm missing the boat here. This strategy was put on the table via another brilliant strategic move by the White House. It's being held up right now (to the disdain of Republicans) because the Dem's want to limit the richest 1% getting a check for 600 dollars.

And the Dems want the "rebate" to apply to folks who didn't pay taxes to begin with.

It's not a rebate people if it goes to folks who don't pay income taxes in the first place. Lets call a spade, a spade here. It's WELFARE.

Ahhh yes... Let's practice more class welfare. That's the ticket. Rich vs. the Poor. There more "poor" votes out there up for grabs. Lets give some more handouts, so we look good for the upcoming election.

Regardless of where you stand on any issues, the pandering of "vote buying" by Congress has to end. Both parties do it. It needs to stop. We need a different system of taxation where one party or the other can't use fear mongering to attract voters.

[Zeuslax]

And the Dems want the "rebate" to apply to folks who didn't pay taxes to begin with.

And who are these people? How do they do it?

[Rob Graff]

Understand - the idiocy of this rebate is something I and my law partner in the neighboring office (who makes Jac C look like John Edwards) agree on. We both agree that expenditures such as this are best focused at investments in the country's infrastructure. And while we don't agree what infrastructure should be improved (I'm a transportation guy, he wants nuclear power plants), the fact that we agree has caused both of us to pause. We're pretty sure it will begin to rain cats/dogs shortly. This is lunacy that will further burden our country's finances.

But

Keep in mind that the vast majority of people who are "not paying taxes" but getting the payment are people that are working, earning wages, but their AGI falls below the taxable level - i.e. Our tax code has declared that they fall so far below the poverty line that they owe no tax obligation. They are not tax evaders - they are obeying the tax code as it applies to them.

I will agree that beyond the lunacy of doing this payout in general, whoever called it a 'rebate' is in error -it's certainly not a rebate - in addition to the point raised by Sonny 2x - how can we rebate taxes when all tax revenue is not sufficient to pay our expenses? In tax law, I vaguely recall that rebates occur when taxes outstrip expenses.

*********

I do believe that increased energy prices and food expenses are lowering most everyone's standard of living. People are hurting. Yet while a one time payment might make things better in the short term, it does absolutely nothing to address the root dependance on foreign energy, the flow of capital away from our shores, the flight of reasonable paying jobs from our states or the continued expenditure of our human and cash resources to the middle east.

Could a "mass investment" of the same size as the "payout" solve even one of these problems? Probably not - but could it jump start some type of alternative energy program? Could it be used as TIF to build high tech manufacturing plants in our cities? Could it be used to improve mass transit so that people would pay less of their paycheck to the Exxons' of the world? I tend to think "yes" to all of these questions.

And with deference to the information quoted by Adam G above as to what the last payout was used for, I've heard at least 20 people at the health club/restaurant/break room note that the payout will be used to upgrade their TV so as to be prepared for HDTV signals in the 2009 switchover.

Can't our leaders find better uses for borrowed money than giving us $ to buy more TV's made in foreign lands? That eventually end up in our landfills? There's a comparison to the Roman "bread & circus" idea here somewhere - isn't there? And shouldn't that concern us all?

[DG]

I read a great Bear Stearns research report on the subject of rebates, and how much of it really gets back into "consumption" that can help keep the economy from going too deeply into recession. Based on history, it looks like just under 50% will be spent, while the rest will be used to save or pay down debt.

Count me in for pay down debt...

DG

[Johnnielax13]

But in America, paying down debt is delayed consumerism. With the debt crisis and negative saving rate of American's for most of the population: freeing up space on their credit cards will only enable them to respend that money. Maybe not in one purchase on an xbox, but over the course of a month or two that $600 will be whittled away, and back into the economy.

Plus I am willing to bet that there will be a portion of the country who will spend their rebate as soon as the bill passes. They will justify that they can pay off their purchase in June.

[Sonny]

And the Dems want the "rebate" to apply to folks who didn't pay taxes to begin with.

And who are these people? How do they do it?

Half of Americans do not pay any federal taxes.

[BucLax13]

How is this not a courtesy check your credit card company sends you with your bill?

[Zeuslax]

Half of Americans do not pay any federal taxes.

Yes, but these same people live pay check to pay check and all of their incomes go directly into the economy.

I'm also for a nation wide surface infrastructure project. I would include water distribution and wastewater collection, treatment and facilities as well.

The state of MI is sitting at 17% unemployment as a state wide avg. In many areas is it pushing 25% and higher. 3 Years ago the federal gov't pumped in over 5 billion dollars for infrastructure upgrades, maintenance and improvements. Knowing that surface infrastructure (roads and bridges) work is the optimal way to "pump" the economy. If it wasn't for this MI would be in even worse shape. Awarding a state funds of this nature has never happened in the past, especially for a state that votes against the sitting president. However, they knew this was the only way to keep the state afloat.

One of Nader's major platforms has been a massive bridge and road upgrade on a nation wide scale. Understanding that this strategy pushes every segment of the economy - steel, transportation, energy, and concrete to name a few. This is in addition to the subliminal/trickle down affects to other segments.

he wants nuclear power plants

This is already happening on a massive scale with private investment. In addition, we are seeing coal fired plant proposals going through the roof. Not a good thing at all, especially since we all know that we need to drastically alter our energy economy and practices of polluting.

[Zeuslax]

There's a ton of fraudulent materials being distributed for the "rebate".

[Hackalicious]

And the Dems want the "rebate" to apply to folks who didn't pay taxes to begin with.

And who are these people? How do they do it?

Half of Americans do not pay any federal taxes.

This is incorrect. According to the Tax foundation, only 32% of income tax filers have zero or negative tax liability. This does not account for people paying capital gains taxes or living off dividends, which includes many retirees and wealthy people. It also ignores the fact that lower-income people pay a larger percentage of their income as sales and payroll tax.

So, who are these freeloaders not paying income tax? Retirees, rich people living off investments, and the poor.

Incidentally, the rationale for giving rebates to low-income people is that they will spend all of it, thus will do more to stimulate the economy. Higher-income individuals save at a higher rate, so less of the rebate would cycle back through the economy. I don't particularly agree with this rationale, but that's the motivation.