Friday, February 8, 2008

That Tax "Rebate"

Just to be clear, so you don’t think you are getting something for nothing when that “rebate” check comes in May.

That check will be a credit based on the 2008 tax year—-the one we have just begun. Basically, it will be an advance on the refund that you will get for 2008. If you are used to sitting down with your tax guy in February and getting a hefty refund, don’t get your hopes up. The money you get this spring will come out of the money you would have gotten next spring. Plan accordingly.

What the government apparently thinks is that we are going to spend that money on consumer goods. Instead, like most people, we are going to use it to pay off debt. If we did not have debt to pay off, we would put it into savings. It’s clear to me that this is merely an election year ploy; a measure it would be politically perilous to oppose. It does not get at the type of reform, investment, or stimulus that the economy (and the country) really needs. It's a chance to look and sound good while not really doing anything to help.

By the way, if you often owe taxes in April, this “rebate” amount will be added to your bill.

I have never felt so stimulated in my life.

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