Government Rebate Checks

[Montyboy]

The above is correct.

For those who qualify (i.e., make less than $75,000), the government decided to give you a $600 per person tax reduction (plus $300 per dependent child) on your 2008 taxes. That is, if you would have paid $10,000 in income taxes for 2008 before the stimulus act, you will pay $9,400 instead (less another $300 per dependent child). However, instead of just having you realize this tax savings when you file your 2008 return by owing less or getting a bigger refund, they are sending it to you now (at a cost to the government of $100 million or so). So you'll get your $600 now, and when you file your 2008 return, you will owe or receive the same amount you otherwise would. This checks are being sent now so that, psychologically, it feels like a windfall. People tend to spend amounts they perceive as windfalls, which is the behavior the government is shooting for.

I think this word should start with a "B"

 

[hardcard]

The 2100$ our family is receiving is going towards our move to Winter Garden this summer

 

[MichWolv]

For those who qualify (i.e., make less than $75,000), the government decided to give you a $600 per person tax reduction (plus $300 per dependent child) on your 2008 taxes. That is, if you would have paid $10,000 in income taxes for 2008 before the stimulus act, you will pay $9,400 instead (less another $300 per dependent child). However, instead of just having you realize this tax savings when you file your 2008 return by owing less or getting a bigger refund, they are sending it to you now (at a cost to the government of $100 million or so). So you'll get your $600 now, and when you file your 2008 return, you will owe or receive the same amount you otherwise would. This checks are being sent now so that, psychologically, it feels like a windfall. People tend to spend amounts they perceive as windfalls, which is the behavior the government is shooting for.

I think this word should start with a "B"

I wasn't specific enough, but the $100 million I was quoting is the cost of printing and mailing the checks versus just giving everybody a reduction on their 2008 taxes when filed. Costs a lot to process 75 million checks and an equal number of "informational alerts" like the ones they sent about 3 weeks ago.

Personally, I think the stimulus package is a waste of money, but the processing costs to send checks as opposed to just giving a reduction through the normal income tax process are even worse.

 

[PlutoInOrlando]

I wasn't specific enough, but the $100 million I was quoting is the cost of printing and mailing the checks versus just giving everybody a reduction on their 2008 taxes when filed. Costs a lot to process 75 million checks and an equal number of "informational alerts" like the ones they sent about 3 weeks ago.

Personally, I think the stimulus package is a waste of money, but the processing costs to send checks as opposed to just giving a reduction through the normal income tax process are even worse.

Yes - but several million of the 75 million you've spoken of - won't they get theirs by direct deposit - starting with the 1st three weeks in May? That will "save" them some money...
I'm just say'n...
but I do totally agree with ya!:wave:

 

[Montyboy]

But it feels good to get a check in the mail.

A few years ago, my county gave us a $100 property/school tax rebate (about 1.6% for me.) Since I pay more than average, I would have prefered a tax cut.

Even so, when the check arrived, I was happy. It beat a sharp stick in the eye.

Of course I know I'll be paying for this national rebate in future years.

 

[MichWolv]

Yes - but several million of the 75 million you've spoken of - won't they get theirs by direct deposit - starting with the 1st three weeks in May? That will "save" them some money...
I'm just say'n...
but I do totally agree with ya!:wave:

True. The $100 million cost of processing and sending the rebates was the Dept. of Treasury estimate, so I'm sure it too that into account.

 

[MichWolv]

But it feels good to get a check in the mail.

A few years ago, my county gave us a $100 property/school tax rebate (about 1.6% for me.) Since I pay more than average, I would have prefered a tax cut.

Even so, when the check arrived, I was happy. It beat a sharp stick in the eye.

Of course I know I'll be paying for this national rebate in future years.

Just what the Govt wants. The belief is that, psychologically, a plain old tax cut doesn't give you the rush that spurs you to spend, spend, spend! But getting a check...ah, that feels like found money, and who can resist just going out and spending that!