Bush's economic stimulus package; What will you get back?
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Phillip As you’re no doubt aware, President Bush has created an economic stimulus package in the hopes of stalling the impending recession (or if you believe some, depression) that’s on the horizon. It’s not approved yet, but it has already passed its first major hurdle – The House Of Representatives approved the $146 billion dollar deal. Want to know how much you'll get?
The chamber – by an overwhelming majority of 385 to 35 – approved sending tax rebate checks of up to $600 per person and $1,200 per married couple, plus an additional $300 for each child.
The checks could be in the mail as early as May. But what does this mean for you? I mean, that’s some fairly vague information. I hate the words “up to†because if I give you “up to $10†I could in fact give you a dime and not be lying.
I did some digging around the news sites, the BBC, government blogs and so forth and have put together a quick check-list of what you will most likely get back. It’s not concrete as the bill hasn’t been through the entire system yet.
In essence, the stimulus package removes the 10% tax bracket currently in place. Of course, if it were that simple we’d all be a lot happier. There are phase-outs baked into the plan that start deducting from your rebate check. But to be honest, the people that will affect most won’t really care as they’re already earning a very healthy sum of money.
The system works in two stages. First, you figure out just how much you can get back. Then, you calculate the benefit reductions based on salary.
First, let’s see what singles could get back.
Earnings                               Rebate
$3,000 or less                        A big fat zero.
$3,000 or more, paid no taxes      $300.
$3,000 or more, paid taxes         $600.
Have children? Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $300 per child
Now, the reductions.
It’s fairly simple math. Once you earn over $75,000, your check is reduced by 5% per $1000 above the $75k threshold. After $87k, you get nothing. Here are some rough examples.
Single person earning $50k a year with 2 children = $1200
Single person earning $80k a year with 1 child = $675 ($900 - $225)
Single person earning $90k a year with no children = $0
Couples get the same treatment, only everything is doubled to take into account the two people in the household:
Earnings                               Rebate
$3,000 or less                        A big fat zero.
$3,000 or more, paid no taxes      $600.
$3,000 or more, paid taxes         $1200.
Have children? Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â $300 per child
And the reductions.
Once again, simple math. Once couples earn over $150k, the check is reduced by 5% per $1000 above the $150k threshold. After $174k, you get nothing.
I found these further examples, all based on the 2007 filing period.
A couple with no children, with adjusted gross income of $100,000:
$1,200 couples rebate. A $1,200 rebate.
A couple with income of $145,000, with three children:
$1,200 for the couple, plus $300 for each child. A $2,100 rebate.
A couple with income of $160,000 with two children:
$1,200 for the couple plus $300 per child — BUT would go down by 50 percent (5% for every $1000 over the $150 threshold). A $900 rebate.
A couple with income of $200,000 and four children:
Disqualified, income exceeded $174,000. No rebate.
There are other aspects to the bill that I’m not covering here, including mortgage relief. But there is another important message here. The government wants you to SPEND THIS REBATE.
It’s a stimulus package, and thus they want the money to go straight back into the cash registers of businesses far and wide. The problem I see with that is that in a time of record debt and no savings, how fiscally responsible is it of the government to tell us to spend our rebate? Isn’t over-spending the reason we got into this mess anyway? I’m sure economists out there will set me straight.
Still, there you have it. A touch more clarification, I hope it helps.
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I believe I read that you would get $300 per child up to 2 children... I think it is a $600 limit.
When I went to go see what I would be getting back - I typed in that I am married, 2 kids, AGI of 17,533 on our 1040 return (Self Employed), it came back and said I would receive 1,200... according to this website I'd receive 1,800.
Is the IRS trying to lie to people about what they will receive?
I understand that you receive $300 per child with no limit.
It's actually beneficial to the economy for us to spend the money, because right now spending is down - that's why we are having these economic problems. As a result of the mortgage crisis, people aren't spending as much, so the economy is doing badly and we are facing the possibility of going into a recession (or already are!) Thus as far as I know, the point of this is to stimulate the economy on a macro scale... not give us all back our money from getting into mortgage problems or help people on an individual scale.
Otherwise, thanks for the info! It's very helpful.
-An economics student
allison.......do you really think that this stimulus package is beneficial to the economy? the government is spending money that it doesn't have. It's like putting a band-aid on a huge wound. it's a joke. the only thing it accomplishes is making our country 150 billion dollars more in debt. our economic problems will never go away unless the federal reserve stops creating money out of thin air.
https://www.cia.gov/library/publications/the-world-factbook/rankorder/20...
some things your economics professor might not have told you:
http://video.google.com/videoplay?docid=-466210540567002553
The thing is, I don't think everyone will go out and spend it, so I don't know how much this "stimulus" would actually stimulate the economy. A lot of people my local TV station surveyed said that they will save the money. I may save mine too.
Granted, saving might be the "financially wise" thing to do. That is saving money builds wealth and gathers interest. However, many folks might claim that they plan on saving it but I would imagine that these same well-intended people say the same about their tax return. Though we often find something that we could "really use" but might be slightly out of reach financially. All it takes is a little boost in income to make that want a reality. This is just my thought, I have to stats to back it up.
Some of us have lost jobs because people are not spending money.I had worked as a sales associate for a department store.The sales quoto to keep my job was not met by just $30 a week for this last month.Average per job lost was about the same at the store I had worked at, it was higher at other stores.The store I worked for lost just 12 jobs.Averaged over all my sales in a week I would still have a job if each person had spent 23 cents more before taxes.So do I think people spending even just a little of the money will help? Yes but I am not sure people will spend enough since many people owe too much.Hopefully this makes sense I have a cold and took cold meds.
Man i would have spent it. If only i got the payment. :(
I think that even us savers will spend a good amount of the money. And for those of us who aren't using credit to buy everything, but instead wait until we have the cash saved to make that special purchase, this will put us way ahead of schedule. We have several vehicle repairs and remodeling projects that have been put on hold. This family, who saves first before anything else, will enjoy spending something for a change!
Last time I didn't get anything because I didn't make enough money. This time, I probably won't get anything because I make too much money.
That's a good sound bite. I hope you get something though. Income limits are $75,000 for an individual, $150,000 for married filing jointly. But I believe individuals up to about $84 - $87 thousand and couples up to $174,000 will get a partial rebate. Plus $300 per child (some reports the number of children is limited, but I did not see that on the White House site tonight.
Last time I didn't get anything because I didn't make enough money. This time, I probably won't get anything because I make too much money.
I think you're in a much better position now. I'd rather be making the money than depending on the tax rebate. Good for you.
This can be a bummer if you earned too much money last year to qualify for the rebate, and is now laid off this year due to the economic downturn. I'm in a similar situation, I might barely qualify according to the explanation....I'll be spending it on necessities to help stimulate the economy!
Thanks for the helpful post.
My wife and I will be getting 1200 from this it looks like, thanks for the info.
I have my wife to thank for all of it I think, I made ~100k in 2007 but she only made 20k.
I won't be spending it though. I think this is a really dumb move by the US government, I don't really understand how so many in congress thinks it IS a good idea and that it WILL work. I'll just be putting it my savings account or into an ETF.
I wouldn't consider this to be a dumb idea... maybe if the entire country was like you (not that that's a bad thing on an individual basis) and would put it in savings then it would be dumb, but a HUGE majority of the country will go spend money as soon as they get it, either because they badly need the money for necessities or to pay off debt, or because they love shopping and spending as much money as they can (think your stereotypical woman). Really though, people like you and me who will save the money are the minority in this country - the majority of America will probably spend the money as soon as they can.
So......does that mean that my husband and I will get the $1200, plus $300 each for our two kids?
I do NOT work, and haven't in years.
That's what I'm wondering.....is it definately $1200 per couple, or since I paid NO taxes myself, do they count me out??
Whew...I think my husband just made under the $75k.....
it pays to be poor?? LOL!
You're in the same situation as we are, and about the same income (though my husband works 2 jobs, and we have six children). From what I understand, the income limit is for a married couple, doesn't matter where it comes from, because they consider the fact that that income supports a family, not a single person. And according to the White House web site, you will get $1,800 (you and your husband, plus $300 for each child). Also, the checks are supposed to go out in May. Congrats!
Sorry, to clarify that last comment, it was a response to Josh's comment.
you are on target to receive $1800, according to all the data and charts I have read. If you are married filing jointly, which I presume you are, you should be fine. Although $75k per year is not exactly what I'd call poor. It's ain't rich, not in this day and age, but you're not eating Ramen every night either.
How many children you have? We had our seventh child in 2007, but haven't filed him on our taxes yet. So will we get money for him? Also, I worked in 2006, did not work in 2007, and now work at home in 2008 as a W9 employee. So will I get $ or not?
I *should* get $3300... wonder if I'll actually see that money!
Social security records is a big one, plus prior year tax returns. As long as your combined family income is less than $150,000, you should get your $3,300. We have six children, and we qualify according to income, so we should get $3,000. I'd heard mixed reports about whether they were putting a maximum on number of children, but the White House website (they should know, right?) says $300 per child. They give an EXAMPLE of what a qualifying couple with two children will receive, but there is nothing stating that the rebate is limited to a certain number of children.
I'm sure they will have very good records of your children, they won't want to give away any more money than they have to. As for the working situation, if you're a couple who paid taxes on more than $3k of income (with 7 children that sounds probable) you should get your full $1200.
I agree that $75K for a two-person household is not poor by any definition. I think you should count your blessings and be grateful for the lifestyle you and your husband have earned.
The poverty line for a family of two is $12,830 according to the 2005 standards. Therefore your family is living at nearly more than 600 percent of the poverty line.
Cheap and poor are not the same thing, and besides which you are too much of an indulged snob to have any idea about poverty.
I think whether $75K a year is poor depends on your circumstances. Where you live, whether or not you own a home (homeowners get that nice tax deduction), whether or not you are dealing with any chronic/serious illness in the family, whether you have insurance. I think it is callous to make such a statement to someone you don't know and don't know their circumstances. To the writer of the comment: take your rebate and enjoy it; you have obviously paid a good part of your income in taxes, so all they are giving you back is part of your own money!
Hah! I'm frugal, but not frugal enough to feed a family of nine on less than 3k a year!
Although, after we "pay" our taxes, we get twice as much back in various credits and rebates, so the government pays us at the end of the year. A "perk" of being in our tax bracket with so many dependents, I guess.
Hah! I'm frugal, but not frugal enough to feed a family of nine on less than 3k a year!
Although, after we "pay" our taxes, we get twice as much back in various credits and rebates, so the government pays us at the end of the year. A "perk" of being in our tax bracket with so many dependents, I guess.
And, our family of 9 qualifies for the free lunch program based on poverty standards, yet we have airconditioned cars, an air conditioned house, cable, and two computers. My biggest gripe is that our food is not ready quickly and conveniently enough - NOT wondering where that food will come from, whether I'll have a way to cook it, or if the water's fit to drink! And yet, people think we are poor because our children share rooms with their siblings.
Poverty is a matter of perspective.
A tax rebate ... is that ALL that they can come up with?!? Give me a break! How about putting people to work! Jobs are being cut as well as wages! What are they going to do with the BIG rebate - pay down what they owe! So who then profits? - the creditors!
How about this ... Our infrastructure is falling down - bridges and roads are in need of repair (remember one fell and killed serveral people!). Put people to work making good money and they will in turn spend their money! Duh! This is how we got ourselves out of a Depression!
If people don't feel good (or safe) in keeping their jobs they are not about to spend! And if you are about to loose your home - what are you going to do with your money? You are going to save it or hope it helps with the mortgage long enough to starve off the wolves!
But then again we have an never-ending WAR to spend BILLIONS on over THERE rather than help our people HERE! Give me a break!
If you have that much of a beef with getting a refund, I am almost certain that they will allow you to return it.
If we SPEND money....it does create jobs
If you have that much of a beef with getting a refund, I am almost certain that they will allow you to return it.
If we SPEND money....it does create jobs
The real problem is that nobody has savings, but everyone has debt. Many people's greatest asset -where they kept their wealth - was their homes, but they didn't actually OWN their homes.
Also, people seem to think that creating jobs is an end to itself; but for a strong economy, jobs should be a BYPRODUCT of innovation, efficiency, and progress.
I think the rebate is a terrible idea myself, but I'm definitely taking the money because I know I'll be paying for it later on in one way or another. Plus, the amount would be enough to pay off the car, which would free up $500 per month - in the long run, if I spent or invested it it would be better for the economy than to blow it all in one day.
o.k me and my husband only make maybe if were lucky 20,000 a year so will we get anything back or not because i have been so confused with this hole thing and i've read a couple articles that say different things.
So I am currently a full time college student, working approx 35 hours a week, I brought in 14,000 last year. My question, since my mom is still technically supporting me, legally. Will i get anything? or since she can still claim me on her taxes as supporting me, does she get it all and i get nothing? Just want to be clear.
Sorry, hun. I'm screwed too. I'm in college but my mom still claims me as a dependent. Because I'm over 17, she won't get a rebate on me. But because I am a dependent, I won't get a rebate at all, even though I work and make more than $3k. So if your parents claimed you on their taxes, you can kiss that rebate goodbye!
If you are over 17 and she claims you on her return, neither of you will get anything. Sucks huh? See below.
Amid the rebate revelry, it’s important to keep in mind that some people simply aren’t eligible for one — including many college students. That’s the point that a grandfather raised in his message to MoneyLine:
Q: I do my granddaughter’s taxes, and she is [a] 21-year-old college student. [In] 2007 she made $12,000 part-time, and she paid $700 in federal income taxes, and she does not claim herself as a dependent, because her parents claim her. According to what I have read in your columns, if I am not mistaken, it seems to me she will not receive [a] rebate because her parents claim her as a dependent. And, on the other side, her parents won’t get a $300 rebate because she is over 17 years old. I hope I am wrong on this, but it seems to me like Congress really has not thought about this and there will be thousands and thousands of students that would be falling into this category. . . .
— W.S., Woonsocket
A: You’re right. Millions of Americans will share in the rebate bounty, but some will not — including your granddaughter.
As the new economic stimulus law makes clear, several categories of people aren’t eligible for a rebate — including those who can be claimed as a dependent on another’s return.
Your granddaughter is obviously working hard to help pay for her college-related expenses. My hat’s off to her (and to you, for looking out for her).
Unfortunately, she falls into a kind of gap in the rebate program:
•She won’t be eligible for a rebate because she can be claimed as a dependent on her parents’ return.
•Parents generally are able to claim an extra rebate amount of up to $300 for each of their qualifying children. But IRS Acting Commissioner Linda Stiff made it clear yesterday that, for rebate purposes this year, a “qualifying child” is one who was under 17 as of Dec. 31, 2007. So your granddaughter’s parents can’t get the extra $300 for her, because she’s 21.
The reason people such as your granddaughter fall into the gap is because of the way the new economic stimulus law was written. “It’s the way the statute was crafted,” Stiff said when I asked her about this issue in a conference call yesterday.
I'm pretty sure that if your mother claimed you on her taxes, or you are legally considered a "dependent" she will recieve the $300 (for a child) rebate included with whatever other rebates she gets. I too am a full time college student and work 30-40 hours a week, and my mother has recieved all of the additional tax credits each year. I believe the only way that you would recieve any money is that if you were legally "independant" and you claimed yourself on your taxes for 2007. ( *Note* you also may want to check with your college to see what it takes to be "independent", it's not just a matter of stating it. I know to qualify at my college you must be either enrolled for a Master's Degree or both parents must have passed away.
Anything I get is going into savings or clearing debt. I'd be crazy to blow it!
How will IRS determine your AGI? Will that be based on 2007 tax year? If so, then does the government have enough time to wait for the 2007 tax filing to be over before determining the rebates?
In the actual text of the bill, I saw something being mentioned about 2008 tax year. So I am a little confused!
Just a reminder to those who forget, the govenment is returning a small portion of the money we already submitted. By definition, this is a refund, not a rebate. It's a drop in the bucket compared to the Fed tax, State tax, NY city tax, Social Security tax, Medicare tax, sales tax, gasoline tax, cigarette tax, governmental surcharge taxes on my phone/cell bill, ...Forgive me if I overlooked other taxes we get hit with.
If I remember correctly, America declared its independence from England because poor King George was greedy and wanted "10%" tax. Seems to me even most poor people pay the government taxes in one form or another. Don't lose sight of that!
For the tiny percentage of people getting this money who didn't pay taxes, call it anything you like .... "free money, rebate" Congratulations to you for getting something for nothing.
Finally, for those who complain this is a ridiculous plan.... I'm sure the govnernment won't mind if you don't cash your check. AS for me, I wouldn't be in my personal cash crunch if the government only took a small portion of my hard earned wages. Instead, my $100K dwindles down to $60K after all the taxes I mentioned above. While %60k is pretty good, it doesn't get much in the NY Metro area for a family of 4.
If your so high and mighty--with your: smug; "I am better than everyone else here," attitude--then maybe you should not care so much about those "getting something for nothing" ppl. My husband & I have worked hard all our lives; 2 jobs each from time to time, never got on welfare; good old ass busting, is all we done.
So what-- why do you have to be such an ass to those ppl who havent figured out how to do that yet? oh wait, you dont. You just want to degrade them to make yourself feel better is all. May the good Lord take away from your smug-conceided backside & give it to those whom work hard, yet cant seem to get ahead. I can understand you being upset about those who do sit on their ass-having babies left & right without a jobs; grouping them all together is unneccessary though. I am glad the good Lord gave me the good sense & work ethic to make a great living for our children. as for you--I hope you get off your high horse & realize that some of those poor ppl do their best. & SINCE YOU WANT TO BIATCH ABOUT NY & ITS HIGH COST--WHY NOT MOVE, & STOP COMPLAINING ABOUT IT.
why dont you shut up with your self rightous behind. If you dont like the high prices in NY, then move. No one made you move &/or stay there. & stop talking bad about those ppl who are poor; they aint cha problem. I get tired of the welfare mothers with 3-7 kids; with 3-7 different fathers; that live off of welfare just as much as the next person--btw they wont get a check.
So get ova it already. I on the otha hand will get 1800-2100$; My husband & I plus our 3 children; We neva had to be on welfare, we worked 2 jobs each to get where we are.
A great work ethic is wht we have always had--working hard neva killed anyone. U really need to come off your high horse though-- try pulling the stick out cha butt, you might make some interesting friends.
I'm a single mom with two children, one 15 and one 17. I know I can receive the benefit for the younger child, but I'm not sure about the older one. I know the child has to be under 17 to qualify for a child tax credit...do you know if the same guidelines will apply to this tax rebate? I'll be thrilled to get anything they send me, but the extra $300 would go a long way to help with the bills!
Let me know if you find the answer you seek about your 17 yr old, as I too have a 17yr old I claimed as a dependent but couldnt receive the earned income/child tax credit on on the 2007 return; would love to know if you only get the money on children age 16 and under or if its 17 and under.
devil_queen_biatch14@yahoo.com
I know there are people out there that believe if you make more, you should have to pay more. I agree, and I would pay more even if I was in the same tax bracket as the lowest income earners. (That's how percentages work!) Of course, that's not the case. For some reason, I must pay a higher percentage of my earnings in taxes. But it doesn't stop there! I also get to pay the lovely AMT. Oh ... but let's see if I can be penalized one more time! Why don't we give some of my tax dollars to total strangers and ask them to use it as 'spending money'. The more frivilous, the better! Of course, I shouldn't be able to get any of this spending money for myself, because I make barely more than the max. (I heard there no longer was a max, but that's clearly not true.) Forget the fact that I might have a million kids to support. If I make one penny over the max, my kids no longer count.
I share my situation, because I don't believe most people who are eligible have considered how unfair this is to higher income earners.
I see your point in one regard. I've never believed in the graduated income tax scale. In fact, I support Mike Huckabee and the fair tax, which would be a consumption tax, which would be equitable for everyone. However, what we're talking about here is an economic stimulus package that puts money to spend on extras in people's hands who normally can't afford it. If you make more than $75,000 as an individual or $150,000 as a married couple, you can, in all likelihood, afford to invest in the economy. In our case, as you've seen if you've read my other comments, we are a family of 8 who make just about right at the SINGLE PERSON limit. Plus am chronically ill with poor insurance coverage; most of my treatment is not covered by insurance anyway. If we are going to invest in the economy, we NEED that rebate. And we DO pay taxes, so if you look at it that way, the rebate isn't coming from what you've paid, but from what we've paid.
They're not using your tax dollars and giving it to others as "spending money." Didn't you hear? Bush got a loan from China to fund the rebates to increase the >3K trillion dollar deficit that we all ready have. All of your tax dollars are in Iraq, and China can kiss this loan goodbye. They're gonna probably come and evict us out of our own country! And the illegal immigrants that we're always complaining about will be turning us away when we try to sneak into Mexico.
Agreed! Am damn sick and tired of being hosed by the government just because we've worked hard and gotten a little ahead of some whiners.
Bith Control!
Bith Control!
O.K so i'm happy if i get a rebate back me and my husband we have had a bad year put ourselves in debt and need to get out that money will help. My husband lost his job and things have been rough. Sometimes i dont' understand how people who make $75,000 a year can complain. So u may or may not pay more taxes boo hoo come to my world me and my husband make 20,000 a year and we have what we can get and thats it. I'm glad about the rebate it would be so much better if taxs in general were lowered. I Guess like they say money makes the world go round because thats whate every American has to have.
I know where you are coming from. Even though my husband makes more money than he did years ago, he does it working 2 jobs just to make ends meet after I became ill and since we're trying to pay off debt from when he was severely under-employed in 2005 (made $13K that year; we were forced to sell our mobile home). But income alone does not determine whether a person is rich or poor. Where you live, family size, illness, job loss....many things go into that. A single, healthy person living in Tennessee might be considered pretty well-off, but a family with a lot of children and unavoidable medical and recent financial hardship may not be. I think that we all need to be grateful for what we have; even those of us with difficulties have it a lot better than many people in the world. And let's, as Mike Huckabee says, be thankful that we live in a country that people are trying to break INTO and not one they're trying to break OUT of.
What's really unfair about this whole thing is that you have to make a certain amount of money to qualify. In my position, I was a stay at home mother last year (5 kids), Now recently a single mother with all 5 kids living with me, I cannot qualify for the rebate (which would be really helpful at this point) because I did not work last year. Whats even more unfair is that the father of my 3 youngest children will be getting a big fat rebate check for him and the kids that live 1500 miles away from him with me and I most likely will not see a dime of it.
In this case, you have an excellent point. I'm a stay-at-home mother of 6, and would feel exactly the same way if I were in your situation. I wonder if a determination will be made based on when you became single again. I would definitely check with a tax professional on that, or contact the IRS. If your husband filed a tax return last year and claimed you and the children as dependents, you should be entitled to at least part of that rebate. It just might pay to check!
Keep in mind he's paying taxes and I'd have to assume he's paying allimony and child support. In my mind that would certainly entitle him to the rebate.
I just read on CNN (http://www.cnn.com/2008/POLITICS/02/08/economic.stimulus/index.html)
that this "rebate" we're getting is actually a loan. The rebate (or most of it) will be deducted from next year's tax refund.
If I'd wanted a loan, I'd've asked for one.
Ah. Since I posted that article (above) the sentence about the rebate being deducted from next year's tax refund has been removed.
Very interesting.
That's what they did last time - imagine my surprise the next year when my refund was cut in half - cause they said they already gave it to me. If they don't do that this time, at the very least we will be paying taxes on it, I'm sure!
From everything I've heard and read, they're not doing that this time. It's not coming off of next year's tax refund, and it won't be taxed.
I dont think I still got an answer to my question. The qualifying income will be calculated based on 2007 tax returns, or 2006?
2006
I have 2 College students who made over $3000 each last year. Should I claim them as depenants? or doesn't it matter for the sake of the Stimulus payments? Will they still get their rebate even though I claim them as dependents? All the articles I read say "taxpayers" will get the stimulus Pack payments.
You will not receive a rebate for a dependent over the age of 17 years. If you claim the college student, they will not receive the rebate.
http://www.irs.gov/irs/article/0,,id=177937,00.html
First of all, I am entirely certain my family will see no money. That's fine. Quite honestly I am sick of the governmnet and all of their crappy "help." We made maybe 30,000 last year for a family of six. Not rich. Not poor enough for help of most kinds, but hey here's an idea let my husband get fired from his job which is our main source of income, MAYBE be qualified for unemployment and maybe qualify for a future rebate. I don't need the governments help . I wish everyone who makes 2, 3,4,5 times what we make would stop all their crying and whining and stop getting themselves into trouble by getting "jumbo" loans for houses that they will lose in a few years anyway. I get so sick of my friend complaing about having no money yet her and her husband have three kids they both work full time and probably make at lease double what we do. Yet they are the ones that are threatened with repossesion and foreclosure. You people need to learn to MANAGE YOUR MONEY!
Something that many people don't understand is that the way our system is set up, many times someone can make twice as much money as you do and actually have less "discretionary income".
Take for instance, healthcare. Many people qualify for State health programs, or Medicaid for their children, but someone who makes 15 or 20 thousand per year more than them, has the entire burden of healthcare on their shoulders. In Texas, the state program only costs $16 per family for the children to be fully insured, with much better coverage than my $900/mo plans affords me. The eligibility requirements are upwards of $40,000/year to qualify. So if I make $60,000, I would not qualify for the coverage so I am spending $10,800 on my health insurance and my friend, who's income is $39,000, is only spending $192. Also, I have a $3,000 deductible per person on my plan, and I pay about $2000 of that each year, if nothing catostraphic goes wrong. So far, that's an additional $12,608.
In addition, my friend's children get free lunches at school because of her income level. I, on the other hand, have to pay the regular price of $1.75 per day if my children are get the same exact meal from school. There are about 180 days a year of school and I have two children, so I am spending $630 on school lunches.
Also, my friend qualifies for a reduced rate on the after school care at our school, so I am paying $40 per week more than she is for the same care. Assuming that the program carries on throughout the summer and my cost does not increase any more, I am paying an additional $2080 in child care for my children.
On top of that, my friend gets an extra $2000 back on her taxes because she qualifies for the Earned Income Credit when she files her taxes. That essentially increases her income by $2000 per year.
In addition to that, my friend has a child in college that qualifies for federal grants of about $3000 because of my friends income level. My child, however, does not qualify for any grants because my income level is over the limit.
So I take out student loans for my child because although I make more money than my friend, I don't make enough to finance a college education. So I take out student loans to pay for my kids college, and they are not subsidized by the government because I make too much money. As a result, I pay capitalized interest on those loans during the time my child is still in college. That has just cost me an extra $1500 per year in interest.
After all of these differences, My income is essentially decreased, compared to my friends, by a total of
$12608
$630
$2080
$2000
$3000
$1500
TOTAL
$21,818
So, even though I make $21,000 more than my friend makes, her discretionary income is now $818 more per year than mine.
And, of course, even though I paid a lot more money into the tax sytem than she did, our rebate checks will be the same exact amount.
And for all of that extra money, I worked my butt off in college, and am paying back student loans to prove it.
Interestingly enough, these discrepancies are sometimes even more when the first income is lower. Earned Income Credit, Federal Grants and subsidized loan programs, Federal Medicaid programs, Federal housing, food stamps, etc. Many of these benefits are increased by even more when the persons income is lower, thus bringing many "low income" Americans to a place where their standard of living is equivilant to others making twice the income.
We truly are living in a society where hard work and perseverance are not valued. Those who do not have resent those that do and those that do are being over-taxed to pay for our governments numerous "entitlement" programs, which those that are paying the most in taxes for are not eligible to participate. Our government programs should be encouraging those less fortunate to increase their earning potential by all reasonable and legal means, instead of discouraging it by making it easy to collect government benefits and difficult to make a decent living without being taxed to death.
Rather than describing what the higher income people are trying to communicate as "whining", I believe a more accurate term would be frustrated, underappreciated and undervalued, and carrying the bulk of the tax burden of this country while reaping few of the most valuable benefits.
Your comments are so eloquent! I can empathise with both sides of this debate. We were a high-income family who lost a job and decided to pour all our assets into a new business two years ago.
Last time there was a rebate, we had too much income to qualify. This time, I'm reading this website to try to figure out how much we'll get. Making a living in this economy in a new business would be much easier if we weren't taxed to death. I just paid the "personal property tax" for the business -- tax on every single machine and piece of equipment, every year, to the township. Even the old desk I brought from home to save money is taxed!
Then there's the employer's share of payroll tax. Most employees don't even think about this one. And how about the health insurance? Most employees take it for granted, but it costs our business $1200 per family per month.
Last year my only income was a single payroll check the accountant insisted that I take so that we had something to deduct our percentage of our family's health insurance from. So a $5,000 check turns into nothing after deducting premiums ($1200 x 20% x 12 months) and then giving Uncle Sam and everyone else their cut. Turns out it's a lucky thing I was forced to take that one check though, because now I qualify for the tax rebate!
Last year we lost so much money that the state actually sent a home heating credit to our gas company. We didn't ask for it; it just happened. We used it to heat our pool. Now I feel guilty that somewhere there's probably a senior citizen who can't heat his/her home and who could have used that money.
Our oldest child is going to college in the fall. We qualify for financial aid now that we're officially "low income." And the way the economy is, we may actually need it once our college savings run out!
We could probably qualify for free school lunch too, but I draw the line there. We know kids who get dropped at school in expensive sports cars, wearing designer clothing, and get a free lunch.
The system is set up so that people can't afford to work to make more money! If business gets slow and we have to lay off an employee, there is no point in them coming in for a day or two when we need them. That would mess up their unemployment check!
We once hired a person (gave him a chance) even though we knew it probably wouldn't work out. He lasted a week. A year later his unemployment statement arrived. He had been fired from six jobs the previous year, and finally accrued enough pay to qualify for unemployment. Since we gave him a chance, we now have to pay about $400 towards his unemployment!
Having been an employee and an employer, I can see things from both sides. The more our government taxes us, the less it pays to work hard. We're heading towards socialism, and the more tax we pay, the less people like me will want to risk our life savings to provide economic stimulus and employment to others. Then all the businesses can move to China, everything here can go on sale (housing, etc), and the Chinese can come over and buy our country up on the cheap! Then we can all work for them in the end. Maybe they'll give us all free food, housing, healthcare, and the same wage no matter what job we do or how hard we work!
An excellent and well-worded factual comment. If you're not already a Republican, you should be! We're not rich by any means, but nor do I consider us poor, just tight after a whole lot of difficulties. I think it might be a good idea, if we're going to have any "entitlements," to work them like they work social security/disability. You have to have paid so much into the system before you can collect, unless your circumstances are extreme (i.e., a stay-at-home disabled mom whose husband is killed), and even they ought to be temporary. I give and help others when I can, and I believe that's the best way to do it, not having the government give hand-outs. But it is perfectly understandable that people are frustrated because the government takes their hard-earned money and gives it to someone who is too lazy to work. That's called re-distribution of wealth, and it's socialistic/communistic and WRONG.
Yeah,
God forbid the government give money to help it's poor and downtrodden.. much better to give corporate welfare to people like Walmart, and bail out savings and loans and Bear Stearns, or give Farm subsidies to land owners who don't grow anything..
I am sorry, but if we are going to be taxed as heavily as we are.. Let it help the commons!!!!!
Why are we getting an economic stimulus package to begin with?.. Oh yeah!! The Bush administration has ruined our economy, and are selling the farm to Red China!!
XOXO
A Proud Independent
Barry
b
First of all, the "rebates" actually do end up being "free" money. Even though your rebate amount will be subtracted from your expected refund for 2008, there will also be a one time tax cut, which will essentially make all the rebate money free money. If you don't receive the rebate you are entitled to this year, you will still get it in an increased refund on your 2008 taxes since your tax due will be cut by the amount of the rebate.
For instance, let's say that your tax liability for 2008 would normally be $5000. However, because of the one-time tax cut for 2008, your tax liability is reduced from $5,000 to $3,800, a savings of $1,200. If you received the $1200 rebate check that you were entitled to earlier in the year, you would then pay the entire $5,000. However, your overall tax liability was still reduced by the $1200. If you did not receive the check earlier in the year, you will only pay $3800 in taxes for 2008. When 2009 rolls around, your liability will be back up to $5000, but there will have been no check earlier in the year.
Secondly, the rebates are determined based on your 2007 returns. If you do not file on time or you file an extension, your check will be delayed.
Thirdly, this is a "stimulus" package, based on taxpayers contributions to the system. To expect equal rebates for those who don't pay any taxes is to expect not a rebate on what you've paid, but a "gift" from the government. Although it is still money that taxpayers would not otherwise get without the one time tax cut, for the most part, it is still only given, in it's entirety, to those who are paying into the system.
For instance, let's say that you are a customer of a specific restaurant and they have decided to give all their regular customers a $20 gift certificate. I walk into the restaurant one day, never having been a customer before, and demand that I deserve the gift certificate too, even though I have never contributed to the business as a patron. In addition, not only have I not contributed to the business, but I have been the recipient of many free meals from the business in the past, as a participant in a free meal program that they have. Should I get a certificate too?
I have a college student, 19 years old, I claim him as a dependent, does he get a refund? He files a tax return and has earned over 3,000. He paid taxes as his W-2 shows, but not much. He gets a refund on taxes. Does he still qualify for a rebate?
The IRS says no.
http://www.irs.gov/irs/article/0,,id=177937,00.html
No. Those who are claimed as dependents will not receive a check according to the IRS publication.
http://www.irs.gov/irs/article/0,,id=177937,00.html
It is my understanding, based on other things I've read, that dependants who are over the age of 17 and still have a tax liability are the only ones that actually pay taxes but are not eligible for the rebate. I have two children in the same boat. Both are students and both of them made more than $3000 and pay taxes. However, since they are dependants of mine, they are not eligible for the rebate. The rebate for children, from what I understand, is only for children under the age of 17.
Isn't that just a big pile of BS. Even if you do not claim them they still will not receive it because they are "eligible" to be claimed. Basically NO college student under 23 will receive the check. Most of which are the ones who need the money to help keep them out of debt.
First of all, according to the White House website, there is no limit on the number of children (which is good for us since we have six children, I'm chronically ill and my husband has to work 2 jobs just to pay the bills).
Second, CNN (link metioned above) is now reporting that it was an earlier version of that article that said this was a kind of "advance" on next year's tax refund, but this is not the case, either. It won't be subtracted from next year's return, nor will it be taxed.
And for those of you who are complaining about not getting the rebate, they are going to people who need them in order to have any extra to buy things they couldn't normally afford. We have six children, and are friends with a family who has 4 still at home; our two families don't make $150,000 TOGETHER, neve mind separately. I think before you continue saying how "unfair" all of this is, you should try walking a mile in our shoes.
First of all, according to the White House website, there is no limit on the number of children (which is good for us since we have six children, I'm chronically ill and my husband has to work 2 jobs just to pay the bills).
Second, CNN (link metioned above) is now reporting that it was an earlier version of that article that said this was a kind of "advance" on next year's tax refund, but this is not the case, either. It won't be subtracted from next year's return, nor will it be taxed.
And for those of you who are complaining about not getting the rebate, they are going to people who need them in order to have any extra to buy things they couldn't normally afford. We have six children, and are friends with a family who has 4 still at home; our two families don't make $150,000 TOGETHER, neve mind separately. I think before you continue saying how "unfair" all of this is, you should try walking a mile in our shoes.
Yes, you will get a rebate. You must make at least $3,000 in earned income in order to qualify, which you do, though since I don't know how much you paid in taxes, I don't know if it will be the maximum of $1,200 per couple or not, but it should. Also, $300 per child. Got this from the White House website, so they ought to know, right?!
I am in the same boat. My oldest child is 17. I haven't read anything about that specifically, but my guess is that since this is a rebate, not a child credit, you will still get that extra $300. After all, you still get a dependent deduction for a 17-year-old, even if you don't get the child credit. This is a rebate of what you've paid in taxes, not a determination of what you will get back. Educated guess, anyway....
I find it interesting that I have 2 children and only got a $300 credit for one child I suppose that's because my daughter who is a senior in high school turned 18, but I heard someone at work saying that it even drops off for 17 year olds. I wouldn't have claimed my daughter if I had know she would be cut out of receiving some additional financial aid. She probably would have gotten a better financial aid package if I'd have put her out on her own like the government did...
It's shame that we can send billions to countries and people that would just as soon blow us up than help our own. You rarely see anyone coming to our rescue when we need help. A better economic stimulus would have been to take all of the money they are spending on the war and divi it up to every legal American. Then anyone could afford to start a business, save it, spend it, or blow it. At least whatever happened, the money would be spend or saved in the US, stimulating our economy. We probably cause a lot of our own problems by contributing to everyone's economy except for ours causing an even bigger trade deficit. Think how much those billions of dollars would help our economy if they were spent in the US!
I'm 21, work full-time and go to college. I definetely make more than 3000/year and pay plenty of taxes on it. My parents claim me as a dependent but won't get a refund/rebate/whatever since I am over 21 BUT I won't get one either since I am claimed. That makes total since. I don't expect the government to give me "handouts" but if they are giving other people some of their money back- yes THEIR MONEY BACK since they paid it in the first place- I would like some of the money that I worked very hard to earn back as well.
From whence cometh the term "Rebate"?
What does paying taxes have to do with the government borrowing money from our kids... and then giving it away to save the Finance industry?
Gives new meaning to the term "entitlement". Try explaining the equality to a senior who is retired and can't work... and doesn't particpate because the taxes he or she paid in were stolen many years ago.
Again... how is "borrowed" money linked to "TAX" rebates.
I am on SSD. I dont know if they made provisions for people like me? But, If I get it, I think it would be a good idea to stock up on foodstuffs and household items as the economy isnt getting any better and the cost just keeps rising!
To last comment if your ahead so much then pay my bills. I'm tired of watching you people buy crap you dont need. When people like me work hard and just make too much for food stamps and watch all those lazy ass people who dont work get everything from the state. The money i get back all goes right to bills,and to think i was in the navy and helped the worlds probblems when we should work on our own probblems in our own country.
Thank you thank you!!!!! I totally agree
What does the economic package mean for taxpayers that had already paid their taxes? Will we get any of the money? or Will we have to wait until next year?
My gross income was $3,584 will I get $600?
does this mean if you are 18 years of age or older, but still a dependant the ones who claim you get $300 and you don't get anything even if you made more than 3,000 and paid taxes for 2007?
First, for all the college students that are making more than $3,000 a year and pay taxes, but are still dependents of their parents... if you want the tax refund don't have your parents file you as a dependent.
The result... you get the money you feel is due to you. Of course, for your parents thought, the outcome of this will be that parents who have paid (and possibly still are paying) a lot for you won't get the benefits of having you as a dependent on their taxes. It just seems to me that the government is expecting those over 17 to be making their own money... and if they are and not a dependent - they'll get their rebate. But if they are a dependent... it seems to me that the government is expecting that they should still be making their own money, but are not "on their own" (head of household, if you like) so don't qualify for the rebate. That's what it seems to me. (sidenote: Why the parents still wouldn't get the rebate, I don't know.)
Complaints in general - life is not fair. Although we all have a general sense of what "fair" should be... it's hard to actually decide how to do it, put it on paper, cover every possibly loophole and unique situation and make everyone happy across the board. If you're getting the rebate AT ALL, you should be grateful and "use" it wisely. (For us, this means into the savings... to be used over the year for bills and getting by.) For those not getting the rebate, there is probably some very complicated reasons why you don't qualify, and maybe they fit your "actual" situation or maybe they don't, but complaining/whining on Wisebread is not going to help at all. Mostly since most everyone here is fairly frugal minded and you'll just be preaching to the choir (about why you should deserve a rebate and aren't getting one) or you're barking up the wrong tree (getting upset at others for their high debt, unfrugal habits... etc. when the majority of the readers on this site do NOT fit in this category at all.)
That's my 2 cents (uncashable, sorry).
If you're a student filing for financial aid, your parents have to claim you as a dependant unless you're over 22 (I think?), or married, or in the military. So, a lot of college students don't get any money from their parents, have jobs and support themselves, file their own taxes, and are still filed as dependents.
As someone who worked 40 hours a week for minimum wage last year, I don't qualify for a rebate because I applied and receieved some federal merit and need based scholarships for tuition this year-- not enough to pay the ridiculous cost of tuition, so don't think just because I'm filed as a dependent I'm not living on ramen and easy mac.
It's not a huge deal (what's $300 in the face of $15,000 in student loans?), but it's annoying, especially since all the college students now are the suckers that get to enter the workforce for the next thirty or fourty years and bear the burden of the currently skyrocketing national debt.
Question,
I read in an earlier post this would be based on the 2006 return. We had twins that were born in Jan 2007. Does that mean my wife and I would not get $300 each for them???
Yes Matt, I do. It won't make everything completely better, but it will help to stabilize things. The point of the package is not to get rid of our national debt, or get the economy completely back on track. Rather, the point is to GET PEOPLE TO SPEND MONEY. You may not have noticed, but many economists are saying that we have entered or are on the verge of entering a recession. This isn't because of our national debt, which of course everyone knows is huge. This is because people have reduced their spending because of the mortgage crisis. Thus the package is supposed to stop the fall into a recession... not solve all the problems of the world!
Allison, I don't think you understood my point. I never implied that the recession (which i am aware WE ARE IN) was a result of our national debt. The spending of our money as individuals, businesses, and as a country is exactly what has gotten us into this mess. the Federal Reserve creates money out of thin air and causes all the malinvestment. It pumps more and more money into the economy when it feels like and this causes inflation, it lowers the value of our currency. this is why the mortgage crisis has occured. not because we're not spending money.
the government's central banking system tries to stimulate business activity by increasing the quantity of money the nation's banks have available for lending.
The Federal Reserve System does this by increasing bank's reserves and/or by lowering reserve requirements. In order to lend the increased quantity of money, and thus earn interest, banks must reduce interest rates to encourage more borrowing.
It is the cheap credit that misleads America. so the sub prime mortgage problem is a result of the fed artificially lowering interest rates and then raising them when they see fit. My point is, the stimulus package is a short term solution to a long term problem. Unless drastic changes are made concerning the regulation of the federal reserve, our economy will never "really" stabililize ,it's all just a big cycle. If you're wise, you will use the money(which our government borrowed from china)to pay off the debt i'm sure a majority of us are in. spending this money ultimately will not do a thing for our economy.
The ironic part about this stimulus package is that those that are claimed as dependents do not receive a dime. However, it is the younger teenagers 17 to early twenties that probably WOULD spend the money frivolously thus throwing the money back into the economy while a lot of the older generation (my parents) have talked about saving the money for future needs. It just seems to me that the requirements for this rebate should be tweaked and given to the people that actually would go out and spend this money on anything and everything. a 18 year old who makes over 3K that just had a lump sum of money thrown into his or her hands most likely is going to spend that money.
This sucks. I just found out that by "child", they mean any dependant. This includes college students not able to recieve a refund from the Economic Stimulus Plan.
I live in my own apartment, pay my own rent and utlities... Yet I don't qualify as an independant because I am under the age of 25 and am in college.
Not only that, I will have to suffer the hike in taxes next year to pay for this crap.
Must be nice adults. I guess I am back to my $8 an hour job to take-from-the-poor and give-to-the-rich.
http://www.dailyredundancy.com/archives/1087.html
That person had no clue what they were talking about. This is based on your 2007 return assuming you file on time (by April 15, 2008)
http://www.irs.gov/newsroom/article/0,,id=179181,00.html
from the IRS site listed above
My child just turned 17 in December 2007. Do I still get the extra child payment?
A. Not in this case. Eligible taxpayers who qualify for a payment may receive an additional $300 for each qualifying child. But to qualify, a child must be under age 17 as of Dec. 31, 2007. In other words, if a child was 16 or younger at the end of 2007 and meets the other eligibility requirements, then the child will qualify for the $300 stimulus payment.
I am currently full time students and I work a full time job. For the 2007 year I filed a 1040A and I made 24000. My mother and father do not claim me as a dependent. Will I get a rebate and if so how much? Thanks!
The package will help regardless if you spend it or not. If you put it in the bank to save it, the bank is only required to keep 1% of that. The other 99% the bank can use it to invest, give out as loans, or other things that generally help out the banks who are suffering from the Subprime mortgage crisis.
Also spending any a small amount of the money ultimately injects many times that amount into the economy. As the person you pay to buy something will use that money to buy something else and that someone else will use it to buy something else and so forth and so on. (Well at least untill it ends up in China, where it will continue to boost the Chinese economy) This is how we got out of our last depression. Although instead of cash giveouts we did public works projects, such as the Hoover Dam. Basically to stop a recession/depression Spending needs to go up.
The only real way to not help would be to store it in a piggybank at home and not in the bank. Where it will slowly lose value as inflation takes over. A Dumb and Dumb idea.
I wholeheartedly agree that working college students are being treated unfairly when they are not eligible for the stimulus rebate because their parent's must claim them because of student loans, etc. If you are a taxpayer - you're a taxpayer! It's your taxes that are paying out these payments and you should be eligible for a $600 payment too! If anyone needs this payment is a college student!!!!!!!!!!!
Maybe a class-action discrimination suit is in order.