Question about Proposed Tax Rebate

[DSpud]

Not to start a political war, If any sort of Tax Rebate is given this year, when will it be given out? Should I wait and do my taxes until after the talk of tax rebates is settled?

 

[voomvoom]

If there is one, and I'm sure there will be, it will be after the April 15 deadline for filing. So, if you owe Taxes, you better get it taken care of?

 

[AllieVi]

Nothing that is done now will affect the filing of your 2007 taxes.

 

[CDH]

As much as politicians would like to get it out sooner, the reports I've heard have said that because the IRS is so busy with tax season the earliest likely possible rebates would come would be May or June - and then they'd have to come out gradually over a period of weeks.

Hopefully in time for Q2 estimated taxes?

CDH.

 

[DSpud]

Ok, that pretty much answers my question. I just didn't want a situation where I would have to refile my taxes to get whatever rebate they were going to offer. So basically, if/when they do this, they are just going to send everyone a check?

 

[bhelms]

Well, hopefully not everyone! If it's to be a rebate then I think by definition that means that you would have had to have paid taxes in the first place. At the risk of politicizing this thread, I think you can guess which lawmakers are insisting that all citizens (and perhaps even some who are not ?!?) be included...

 

[DSpud]

Yes, I also believe you had to at least pay taxes! I should have been more specific!

 

[rockymtnhigh]

And all those rebates are is an advance on NEXT years taxes. As you have to add it back in as income in 2008.

 

[bhelms]

But then you'd still only be paying your marginal rate on that rebate, what, 38% max.? So you're still putting at least 60+% of that amount back into your own wealth.

I think there should be some strings attached to any rebate. The taxpayer should be required to either spend it on goods/services made in the US and/or use it to pay down high interest debt. No rushing out to Wal*Mart to buy a big screen TV made in China!

I have a better idea - let's just make the current temporary tax cuts permanent. We taxpayers all pay way too much tax as it is. And let's make some spending cuts permanent as well...!

 

[Bogy]

This thread is really in danger of getting moved to the Pit, and I hesitate to post...But, bhelms, how are you going to enforce your "only on goods made in America" stipulation? That places some big restraints on how the rebate could be spent. You can't buy gas with it. Pure ethanol would be ok however.

As far as the "you have to have paid taxes" stipulation, what kind of taxes? Lots of people pay lots of taxes, including thousands of dollars of Social Security taxes, but don't make enough to pay income tax. Yet these are the people who are most likely to go right out and spend the money, as opposed to those who may pay a lot of taxes, but who are less likely to spend it quickly.

Is the purpose to stimulate the economy, or to benefit certain individuals? Or to make it look like the government is "doing something" in an election year? Taxes have already been cut so deep and the deficit has already been run up so high, there isn't much available for any significant plan now.

 

[bhelms]

...But, bhelms, how are you going to enforce your "only on goods made in America" stipulation? That places some big restraints on how the rebate could be spent. You can't buy gas with it. Pure ethanol would be ok however...

OK - I guess this has now officially become a "Pit" debate...!

This "rebate" could come as plastic that the retaillers would have to regulate, tho' I agree that runs counter to my usual minimal gov't interference philosophy. There could be other means. I guess what I was suggesting here was more developing consciousness on the parts of the citizen consumers that they need to be a part of the solution rather than part of the problem, you know, patriotism?

BTW - "Made in America" is slippery in most products since raw materials often/always come from non-domestic sources, like the oil example you use. If the oil is refined in the US, that should probably count as MiA, as much as any other product.

...As far as the "you have to have paid taxes" stipulation, what kind of taxes? Lots of people pay lots of taxes, including thousands of dollars of Social Security taxes, but don't make enough to pay income tax. Yet these are the people who are most likely to go right out and spend the money, as opposed to those who may pay a lot of taxes, but who are less likely to spend it quickly

I just said "have to have paid taxes". I didn't stipulate which kind.

...Is the purpose to stimulate the economy, or to benefit certain individuals? Or to make it look like the government is "doing something" in an election year?...

If we're giving the "rebates" to the individuals, then I guess that (my above hope notwithstanding) we're allowing each individual recipient to make a decision for himself as to how to "spend" it. Stimulating the economy can come in many forms other than a boost in retail sales. Personally, I will either 1) pay-down debt, or 2) invest, probably in more stock. Either one is a stimulus, albeit a small one. The former allows me more lattitude personally to make other financial decisions, and free-up capital for others to take advantage of in the form of loans they need. The latter allows private businesses, the true lifeblood of this economy, to invest more in additional capital expenditures or jobs, both of which help the economy overall and result in increased tax revenues.

...Taxes have already been cut so deep and the deficit has already been run up so high, there isn't much available for any significant plan now

I never said I actually favored this "rebate". I did say I favor making the current tax cuts permanent. Lower personal and corporate tax rates = more tax revenue, and only with increased revenue (coupled with reduced spending) can we reduce that deficit. Lower taxes = higher revenues. That seems to be as solid a law as action = reaction, and these are both favorable ones...

 

[goober]

check this out!! Lou Dobbs alert: Illegal immigrants may get rebates - The Crypt's Blog - Politico.com

 

[Bogy]

check this out!! Lou Dobbs alert: Illegal immigrants may get rebates - The Crypt's Blog - Politico.com

Mark Krikorian, director of the Center for Immigration Studies, a conservative organization, says the problem is not with the economic stimulus bill but with the lack of coordination between the IRS and immigration enforcement agencies.
"If the IRS was cooperating with Social Security or DHS [Homeland Security] ... they would know who the illegal immigrants are who file tax returns," Krikorian said.

I'm not sure if it is illegal, or just the IRS practice NOT to share tax information with other agencies, but it is true that many undocumented workers file their tax returns each year. Social Security would be considerably less solvent than it is if it weren't for all those undocumented workers who have no hope of ever collecting SS weren't contributing. I am sure that the number of those filing has been on the rise in the past few years, because with the president's proposals on immigration, the last time there was an amnesty, being able to show you had been paying your taxes was a big part of getting through the process. If the IRS would start sharing that information with other agencies, their revenues would take a hit.

 

[jayn_j]

I just said "have to have paid taxes". I didn't stipulate which kind.

Everybody pays taxes in some form, even the people you are trying to exclude. At the very least, sales taxes.

I never said I actually favored this "rebate". I did say I favor making the current tax cuts permanent. Lower personal and corporate tax rates = more tax revenue, and only with increased revenue (coupled with reduced spending) can we reduce that deficit. Lower taxes = higher revenues. That seems to be as solid a law as action = reaction, and these are both favorable ones...

This is only true to some point, and I exopect the bottom of the curve is at a higher tax rate than you expect. As an extreme example, if you reduced the tax rate to 0, you would not get tax revenue no matter how much it increased spending. The miniscule rebate rates are a political ploy and will not have any significant kick to either the economy or total tax revenue.

 

[goober]

I'm not sure if it is illegal, or just the IRS practice NOT to share tax information with other agencies, but it is true that many undocumented workers file their tax returns each year. Social Security would be considerably less solvent than it is if it weren't for all those undocumented workers who have no hope of ever collecting SS weren't contributing. I am sure that the number of those filing has been on the rise in the past few years, because with the president's proposals on immigration, the last time there was an amnesty, being able to show you had been paying your taxes was a big part of getting through the process. If the IRS would start sharing that information with other agencies, their revenues would take a hit.

I'm worried.u r starting to sound like a Republican!!

 

[Bogy]

I'm worried.u r starting to sound like a Republican!!

Hey, this isn't the pit, there's no need to get insulting.

 

[bhelms]

Everybody pays taxes in some form, even the people you are trying to exclude. At the very least, sales taxes...

Alright, "...has to have paid FEDERAL taxes" to get a federal tax rebate. The only Federal tax I'm aware of on everyday goods is the 18.4-cents per gallon gas tax. (I'm also not considering indirect taxes, like any tax paid by the seller that's imbedded in the sales price.) This is supposed to be a rebate of federal income taxes. Let those who paid into the IRS get the "rebate". Anything else is welfare. If that's what we decide to distribute, then let's call it what it is!

...This is only true to some point, and I exopect the bottom of the curve is at a higher tax rate than you expect. As an extreme example, if you reduced the tax rate to 0, you would not get tax revenue no matter how much it increased spending. The miniscule rebate rates are a political ploy and will not have any significant kick to either the economy or total tax revenue.

Sure, 0% rate = $0 return. And I agree that there has to be a "diminishing return" as rates are lowered. But I'm all in favor of us trying to find that lowest possible rate with further cuts. As a minimum, let's make the current temporary cuts permanent!

Agreed on the real motive behind this, and the likely minimal impact it will have even in the short term...

 

[Peter Parker]

And all those rebates are is an advance on NEXT years taxes. As you have to add it back in as income in 2008.

No. It has not passed yet so it is hard to say anything definite but a rebate or refund is not taxable income. The question is whether it will be considered an advance refund or be outside of the 2008 tax picture altogether. In the hose bill it was excluded altogether and right now the Senate bill is consistent on that point. But until it pases both houses we cannot say for sure. But right now NO ONE has proposed that it be considered additional income. In both bills it si just additional money not additional income oran advance on 2008 taxes (which BTW are two entirely different things).

Let's not spread FUD on this issue---just kidding.

 

[Dah-Henny]

It is my understanding that the only way GW could get the dems to agree to the deal was to include rebates to low income ppl who don't even pay to begin with.

I don't think it's anything more than a band-aid, but I think I may see a new plasma tv out of it.

 

[Peter Parker]

In the deal that was reached with the House leadership a minimum income was required. What comes out of the Senate and what a conterence committee does is anybody's guess.