Income Tax Rebate Check vs Market Response?

[Weather_n_Leather]

I reposted this from my account talk thread...so more people might see it here.
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I understand the premise that the government gives money back via an Income Tax Rebate check and that the money is put back into the economy when the public makes purchases. But from what I have heard via the media (TV, internet and newspapers), only a small percentage (~33 percent) was actually injected back into the economy the last time the government sent out tax rebate checks. It sounds like roughly a third was used to pay down debts while the remaining third was put into savings.

With a current number of foreclosures and record credit card debt, it seems to me the percentage of this tax rebate that will actually injected back into the economy in the short-term this time would actually be smaller than the last time.

I am sure most of the money eventually made it back into the economy last time and will this time as well. But if this is a short-term "fix", it does not seem very efficient.

Does anyone else feel this way...or am I out in left field?

 

[Rod]

I disagree with the entire premise.

Why should my "tax money" be used to bail out folks who have been irresponsible with their financial planning, i.e., credit card debt, mortgages they couldn't afford in the first place?

Folks will argue the "tax money" point. But still, it's a government to the rescue scenario, or gov. bail out. A scenario the government wants to play out because it conditions folks to rely on Uncle Sam- his plan all along.

Feed the fish and they will continue to hover at the surface in a feeding frenzy instead of becoming responsible to feed themselves.

God Bless

 

[Show-me]

I too disagree with the premise too. It is my money they are rebating. MY MONEY! I do not think their plan will work but it is MY MONEY and I want in out of the politicians hands and back into my hand. I am more fiscally responsible than them and its MY MONEY.

The people that are irresponsible will use it to pay a late bill or go party on it. That's fine with me cuz they are middle class folks that paid it into the tax system and got it back to do as they please. It is their right to be stupid! That freedom thing.

The people like us will use it to fund a Roth, save it for the times to come, or buy our new baby some necessities. Start a new baby savings account. Maybe I will invest it in some more bullion or the Glock 21 I am itching to own. I'm sure the value of both will go up and I will be truly stimulating the economy cuz I am on solid ground with my finances.

Let American tax payers have THEIR money back politicians will spend it on bridges that go no where or to study minnow in a stream.

Again I don't think their plan will work, but lets give people THEIR money back anyways.

 

[Medic72]

wow lots of negative comments about the little man, what's wrong with paying a late bill, maybe some people had a bad year, not everyone has super roth's and tsp accounts. just my observation.

 

[Show-me]

Nothing wrong with paying a late bill, I would question the actions that led to it. Meaning if it was part of the subprime mess and specifically what part that was.

 

[Reactive1]

I'm never in favor of this type of thing. Now, I'm more than happy to take some of my money back, if they want to do it. But to think that this will stimulate a 5 trillion dollar economy is laughable. They need to lower the corporate tax rate, lock in the Bush tax cuts, and slash government spending on so-called "entitlement" programs.

 

[Fivetears]

I agree with Rod & Show.
This is no fix, and certainly not the way to fix a problem of this magnitude. The only thing this stimulus package is going to do is hang flat panel TV's in living room’s, and increase the national debt. Most folks just won't split that cash up into 28 piles to augment their income. JMHO

Any money sent my way will go into the family savings account.

 

[CountryBoy]

I'm with Rod and Show also and as 5tears said there is no fix. We just have to take our medicine and hope the STUPID and GREEDY people have learned something from this. Ya gotta work to get anything in life and if it sounds to good to be true, then darn it, it is. If the nanny state bails them out these same people will never learn their lesson and will fail to pass any knowledge along to there children. We'll just have another generation of the stupid and greedy being taught how to cheat the working people outta their money.

CB

 

[SkyPilot]

However, it they are gonna dole out the cash, I'm gonna take it... My TV is starting to warp and wave, and this could be just the right time, as I gotta replace it anyway. Heck, maybe downsize, add a little cash of my own and get a couple

 

[Show-me]

I would be interesting to start a pretend pool as to when the "stimulus package" will be passed and then when the checks will be cut.

I say not earlier than March 15th to have check in hand.

 

[Weather_n_Leather]

I know Congress and the President are already talking about the incentive package and any associated tax rebate checks. But I doubt if they will be able to get anything passed before the first or second week of February (at the earliest). If you add the time to get everything spun up at the Treasury Dept, mid to late March sounds reasonable.

But you have to believe it will take longer than expected...which may put it into the end of March or Early April.

 

[Birchtree]

The Donkey wants to give folks a rebate that don't even pay taxes. Uncle could just as easily reduce the federal gas tax for 6 months or so - that would do alot I think. And by the way I'm with Reactive 1.

 

[robo]

The Donkey wants to give folks a rebate that don't even pay taxes. Uncle could just as easily reduce the federal gas tax for 6 months or so - that would do alot I think. And by the way I'm with Reactive 1.

Birchtree,

Bob was thinking the same thing, but cutting the payroll tax. On his show he recommended cutting it from 6.5% down to 3% and it would not require much work and it could be done quickly. Some computer geek could do it in a couple of key strokes. No offense Tom!

 

[Fivetears]

Very well put.

I'm with Rod and Show also and as 5tears said there is no fix. We just have to take our medicine and hope the STUPID and GREEDY people have learned something from this. Ya gotta work to get anything in life and if it sounds to good to be true, then darn it, it is. If the nanny state bails them out these same people will never learn their lesson and will fail to pass any knowledge along to there children. We'll just have another generation of the stupid and greedy being taught how to cheat the working people outta their money.

CB

 

[Show-me]

Here we go, the water is getting muddied! Let's tank Social Security and Medicare quicker Schumer. Limiting the stimulus to those who pay income tax is unfair? So is it unfair that I pay taxes and eat hamburger and chicken on sale while I watch people in front and behind me use food stamps to buy STEAK! Bite me Schumer!

http://biz.yahoo.com/ap/080121/economy_stimulus.html

AP
Schumer: Expand Those Helped by Stimulus
Monday January 21, 2:04 am ET
By Will Lester, Associated Press Writer Sen. Charles Schumer Says Limiting Stimulus to Those Who Pay Income Tax Is Unfair

WASHINGTON (AP) -- Any rebate included in an economic stimulus plan should include people who pay Social Security taxes, not just those who pay income taxes, a leading Democratic lawmaker said Sunday.

"If we did the rebate based on the payroll tax, it would hit a lot more people at a lower end of the spectrum. And so to just say income taxes are the only taxes we're considering that people pay is unfair," said Charles Schumer, the New York lawmaker who is chairman of the congressional Joint Economic Committee. People making $35,000 to $50,000 pay a lot of federal taxes, he said, but much of that is not income tax, but directed to programs like Social Security.

Democrats and the Bush administration say they want to reach a quick agreement so the economic stimulus can be applied quickly to the struggling economy. But any Democratic insistence on covering those who don't pay income tax could be a cause of conflict. The White House, for now, envisions providing one-time rebate checks to people who pay federal income taxes. That would leave out millions of the working poor, who do not make enough to pay income taxes but do pay Social Security and Medicare payroll taxes.

 

[SkyPilot]

It's interesting that Schumer refers to SS contributions as "tax" in this context. Many times they refuse to call it a tax to avoid the appearance of government imposition.

 

[Show-me]

They are rattled and not thinking before they speak. We are seeing their true colors.

 

[JOVARN]

I would love to see someone take on the credit card industry. Lowering interest rate charges would better serve the public at no cost to the Gov,other than a possible decrease in Campaign contributions.

 

[Rod]

I would love to see someone take on the credit card industry. Lowering interest rate charges would better serve the public at no cost to the Gov,other than a possible decrease in Campaign contributions.

Lowing rates wouldn't better serve the public.

It would simply give them more of an excuse to remain in debt.

If they would pay their credit cards in full each and every month, better serving themselves, then they wouldn't have to worry about those high interest rates.

Actually, if they had an emergency savings account, then they wouldn't have to worry about credit cards!

Americans love debt... and they love gov. hand-outs!

They simply need to empower themselves!

God Bless

 

[JOVARN]

Thank you for lesson in credit card usage 101. I was making a statement that addressed the thread. (Income Tax Rebate Check vs Market Response?) in the long run lowering interest rates on credit cards would place more money in the hands of the consumer then a one time rebate disbursement.
That was it
And there was no need to HIGHLIGHT your comments.