# Extra Tax Rebates Coming Your Way??



## MA-Caver (Jan 24, 2008)

Well this is good news... for some of us. 


> * Tax rebates deal announced*
> http://news.yahoo.com/s/ap/20080124/ap_on_go_co/economy_stimulus
> By ANDREW TAYLOR, Associated Press Writer 23 minutes ago
> WASHINGTON - Congressional leaders announced a deal with the White House Thursday on an economic stimulus package that would give most tax filers refunds of $600 to $1,200, and _more if they have children_.
> ...


I'm not wholly sure if I even qualify or not being a single individual but $600 ... I'm wondering if that's UP to or extra... hard to read between the lines here. 
Makes one wonder what's up with the sudden generosity of the government here? Fear of the forthcoming recession?


----------



## terryl965 (Jan 24, 2008)

Is this free money or a loan against next year tax refund? Like it was a couple years ago.


----------



## Andrew Green (Jan 24, 2008)

I'm really not much of a economist, but isn't the recession fears largely do to the huge deficit the US is running under, as well as the huge debt?  Won't this increase the deficit as the government will have less money after giving a bunch out?

Seems like common sense to me, in order to cut taxes, you need to also cut spending.


----------



## CoryKS (Jan 24, 2008)

Always happy to get my money back from the government, and it looks like it had support on both sides of the house.  Though I see that Comrade Pelosi managed to get a little redistribution into the proposal.



> Pelosi, D-Calif., agreed to drop increases in food stamp and unemployment benefits during a Wednesday meeting in exchange for gaining the rebates of at least $300 for almost everyone earning a paycheck, including those who make too little to pay income taxes.


----------



## Empty Hands (Jan 24, 2008)

Andrew Green said:


> I'm really not much of a economist, but isn't the recession fears largely do to the huge deficit the US is running under, as well as the huge debt?



The recession we are currently hurdling towards is mostly based on the decline of the mortgage market.  Bundles of subprime loans were marked as highly reliable investments and used to back up other securities.  Of course, anyone with a brain knew that those loans were unstable and would eventually crash when we had to raise the interest rates back up.  Sure enough, now that the ARM's are adjusting upwards and people are defaulting, those bundled mortgages marked as "highly reliable" are now marked as "pieces of *****", and the backing they provided for other securities is now basically gone.  Thus, the fall of the mortgage market ripples out into other sectors of the market.

Even foreign markets are taking the hit, as we've seen over the past few days.



Andrew Green said:


> Seems like common sense to me, in order to cut taxes, you need to also cut spending.



Unfortunately, both cutting taxes and spending are highly popular activities and thus highly correlate with a politician's continuing career.  Even our supposed party of taxation, the Democrats, are only talking about raising taxes on the "rich", a sufficiently small group of people that Democratic electoral success won't suffer.


----------



## CoryKS (Jan 24, 2008)

Empty Hands said:


> Of course, anyone with a brain knew that those loans were unstable and would eventually crash when we had to raise the interest rates back up.


 
This is one of those times when my cynical nature pays off.  I'd never get a variable rate _anything_ because I always assume the rates will go up.


----------



## Empty Hands (Jan 24, 2008)

CoryKS said:


> This is one of those times when my cynical nature pays off.  I'd never get a variable rate _anything_ because I always assume the rates will go up.



Yeah, me too.  Rates won't stay low forever, people should be able to figure that out.  My plan is to buy in with a fixed when rates are high and prices low, ride it out for a while, then refi my already cheaper home onto a low rate fixed when rates fall again.

Of course, the government is panicking and trying to stave everything off for a while longer.  The Fed just cut rates again, between official meetings even, when they are already extremely low.  This move had almost no effect on the market free fall.


----------



## michaeledward (Jan 24, 2008)

MA-Caver, yes, you qualify. As I understand it, single taxpayers will receive a 600 check, if they pay income taxes, and have income less than $75,000.00.

If you do not earn enough to pay income taxes, but pay into FICA and Medicare, as I understand it, you will receive a $300.00 check. 

This is the White House / House of Representatives proposal. The bill needs to move through the Senate before going to the President's desk for a signature. 


It seems very counter-intuitive to send checks out, when the country is already over-drawn. And, it seems the government is doing all it can to devalue the dollar. Best I can figure, is this a sneaky way to give more of our tax money to some fat-cats somewhere; even if it looks like an election year ploy.


----------



## Makalakumu (Jan 24, 2008)

This is probably the worst economic stimulus idea that I can think of.  In fact, it smacks of election year politics and that is it.  There is no rhyme or reason behind it...

Here's why...

1.  The amount of money doesn't even come close to what most americans have in debt.  For example, I'm going to take this check and slap in imediately into my student loans.  (France, btw, pays for everyone's education)

2.  This idea does nothing to stop the devaluation of the dollar.  That is one of the real reasons that people are having a hard time right now.

3.  This stimulus bill does nothing to address the broken, corrupt, and immoral institutions/corporations that our government has morphed into.  These piles of **** were designed to rob you blind and line the pockets of the wealthiest.  

What more can a person say?  All this bill does is make the problem worse.  IMHO, if would make far more sense to pull our troops out of every foreign country, slash the military budget by 75%, give taxpayers back third of their tax money, and use the surplus to make sure we don't have schools with trees growing out of their books.


----------



## crushing (Jan 24, 2008)

Andrew Green said:


> I'm really not much of a economist, but isn't the recession fears largely do to the huge deficit the US is running under, as well as the huge debt? Won't this increase the deficit as the government will have less money after giving a bunch out?
> 
> Seems like common sense to me, in order to cut taxes, you need to also cut spending.


 
That's not the only deficit that will increase.  The trade deficit may also grow as the _rebate_ checks are spent on imported plasma TVs.  Not to mention the infusion of cash eating away at real savings as it pushes inflation higher.

If one wants a recession, get the media to tell the people we will have a recession.  The economy is based on confidence.  Maybe it's a bit of the conspiracy theorist, but I have a feeling that some key people were looking to get some stocks on the cheap and the best way to do that is to talk down the economy and the sub-prime loans were just the thing to help make it happen.

With sub-prime loans, both the lenders and borrowers made stupid decisions.  Will the taxpayers bail them out for those poor decisions and take away the lesson that will help prevent such mistakes from happening again?

Personally, I thought I would be buying up mutual funds on the cheap for the next several months as the markets struggled, giving up some short term losses for better solid wealth building in the long term.

Well, we've got a bi-partisan solution.  Only good can come when Democratics and Republicanistics make nice and agree on policy. . . .right?????


----------



## Bob Hubbard (Jan 24, 2008)

I'll take the cash. Hell, the SOB's owe me I figure.
They can't be bothered to find out why the oil companies are allowed to get away with gouging us, driving the costs of our food and other necesities sky high, or invest in clean renewable energy sources that don't make corn a rich persons food, I'll take the bandaid.

It'll go towards paying for my heat this winter, and maybe some new socks.


----------



## Senjojutsu (Jan 25, 2008)

Empty Hands said:


> Even our supposed party of taxation, the Democrats, are only talking about raising taxes on the "rich", a sufficiently small group of people that Democratic electoral success won't suffer.


 
Perhaps they can resurrect the famous Ten Years After song from 1971 at the DNC Convention this summer as a theme song?

"...Tax the rich, feed the poor, till there are no rich no more."

Comrade Pelosi!?

Hail Albania, bastion of the Socialist Revolution!!
Ah, my college days memories.
:wink1:


----------



## Marginal (Jan 25, 2008)

crushing said:


> With sub-prime loans, both the lenders and borrowers made stupid decisions.  Will the taxpayers bail them out for those poor decisions and take away the lesson that will help prevent such mistakes from happening again?


You'd think the lenders would've known better well before this all came crashing down. Give people with no money, money and then hammer them with increasingly large payments. How was that a recipe for success?

Lend
???
Profit


----------



## theletch1 (Jan 25, 2008)

Marginal said:


> You'd think the lenders would've known better well before this all came crashing down. Give people with no money, money and then hammer them with increasingly large payments. How was that a recipe for success?
> 
> Lend
> ???
> Profit


Because the lenders and borrowes both had the same mindset that far too many in this country have...I want it NOW!!!  Just let me close this deal so I can make my quota/commission and we'll worry about the rest of it later.  Well, it's later and all hell is breaking loose.  Between somewhat predatory lending practices and people who should have (reasonably) known they shouldn't be buying a house when they could barely keep up with their rent this fiasco was a nightmare waiting to happen.  I'm not sure when everyone forgot the old saying "If it seems too good to be true it probably is." but that seems to be what's happening.

As for the rebate check, I'm a little insulted to be honest with you.  It's like giving a kid a sucker to shut him up for a couple of minutes.  Do something solid with the economy so that I'm stable in the long run and you can keep the check.  'Course we all know that ain't happenin.


----------



## CoryKS (Jan 25, 2008)

Marginal said:


> You'd think the lenders would've known better well before this all came crashing down. Give people with no money, money and then hammer them with increasingly large payments. How was that a recipe for success?
> 
> Lend
> ???
> Profit


 
Actually, the lenders probably did profit from the loan.  Many loans are sold to other companies, often quite soon after the money has been lent.


----------



## FearlessFreep (Jan 25, 2008)

Marginal said:


> Lend
> ???
> Profit



s/???/Government Bailout


----------



## Marginal (Jan 25, 2008)

CoryKS said:


> Actually, the lenders probably did profit from the loan.  Many loans are sold to other companies, often quite soon after the money has been lent.


Yeah, but it's still a case of hogs lining up at an empty trough. Doesn't matter which hogs do it, the trough is still empty. I don't see why buying that debt was any better than creating it in the first place.


----------



## terryl965 (Jan 25, 2008)

Marginal said:


> Yeah, but it's still a case of hogs lining up at an empty trough. Doesn't matter which hogs do it, the trough is still empty. I don't see why buying that debt was any better than creating it in the first place.


 
I agree, but one hog lover to another are you a shoulder or butt man, senator are butts.


----------



## Makalakumu (Jan 25, 2008)

CoryKS said:


> Actually, the lenders probably did profit from the loan. Many loans are sold to other companies, often quite soon after the money has been lent.


 
Many of these loans were sold as high security investments to firms in Asia.  This is why they are taking such a hit right now.  And they are pissed.  Confidence in US financial markets is at an all time low and people are crying foul all over the world.  This is why talk of dumping the US dollar is piping up.


----------



## Makalakumu (Jan 25, 2008)

Marginal said:


> Yeah, but it's still a case of hogs lining up at an empty trough. Doesn't matter which hogs do it, the trough is still empty. I don't see why buying that debt was any better than creating it in the first place.


 
Because once you buy it, you own it.  The firms that bought these mortgage backed securities own the risks.  The people who made the deals, got the profit.


----------



## michaeledward (Jan 25, 2008)

So, the broker is off the hook, because he sold the paper to the lender.

And the lender is off the hook, because he rolled up the debt and sold it to security houses.

And the security houses are off the hook, because the big insurance companies sold 'bond insurance'.

And when the government bails out the bond insurance companies, no one will realize that it all part of the same house of cards.

If you obscure enough of the financial transactions, nobody knows who is responsible for what ... but distract the taxpayers for a while with a check, and they won't notice the multi-billion dollar bail out that comes out of the taxpayers pocket down the road.


----------



## Andrew Green (Jan 25, 2008)

Personally, I predict a increase in X-Box 360 and Nintendo Wii sales to come of this.


----------



## Kacey (Jan 25, 2008)

Andrew Green said:


> Personally, I predict a increase in X-Box 360 and Nintendo Wii sales to come of this.



Not from me... but if I get enough back, I'm going to replace the rest of my windows.


----------



## Andrew Green (Jan 25, 2008)

Kacey said:


> Not from me... but if I get enough back, I'm going to replace the rest of my windows.



So Microsoft still gets your money :lol:


----------



## Kacey (Jan 25, 2008)

Andrew Green said:


> So Microsoft still gets your money :lol:



Uh... that's windows for my _house_, not my _computer_!


----------



## MA-Caver (Jan 25, 2008)

Andrew Green said:


> Personally, I predict a increase in X-Box 360 and Nintendo Wii sales to come of this.



Well I predict a new set of tires for my Jeep and maybe some ROPE :uhyeah: for caving. But I was planning on that with my (regular) return anyway... with the extra... hmm, perhaps I can have enough to enroll in a good MA school. We'll see.


Oh and Bob, think Wool Socks to keep your toes toasty warm. Get the highest percentage of wool that you can. NOTHING beats the insulating and warmth of woolies.


----------



## crushing (Jan 25, 2008)

MA-Caver said:


> Well I predict a new set of tires for my Jeep and maybe some ROPE :uhyeah: for caving. But I was planning on that with my (regular) return anyway... with the extra... hmm, perhaps I can have enough to enroll in a good MA school. We'll see.
> 
> 
> Oh and Bob, think Wool Socks to keep your toes toasty warm. Get the highest percentage of wool that you can. NOTHING beats the insulating and warmth of woolies.


 

I'll do the anti-patriotic thing and put the whole thing towards my auto loan and get that damn thing paid off rather than buy shtuff.    I sent my last VISA payment in today.  My relationship that started with VISA in 1989 is over!  When the car note is paid it's on to baby step 3!


----------



## Kacey (Jan 25, 2008)

crushing said:


> I'll do the anti-patriotic thing and put the whole thing towards my auto loan and get that damn thing paid off rather than buy shtuff.    I sent my last VISA payment in today.  My relationship that started with VISA in 1989 is over!  When the car note is paid it's on to baby step 3!



Congratulations!  My Visa is nearly paid off (again) - so it's pay that off first, and then see if I have enough for new windows.  The amount I'm likely to get isn't enough to pay anything off - but it could be enough to replace the rest of my old aluminum frame windows, and reduce my utility bills... which will help with the student loans and then the mortgage.


----------



## Makalakumu (Jan 26, 2008)

I'll take the money and pay down my student loans.  The sad reality is that I'll be taking debt to pay off another debt.  The government has no other way to pay for this other then to tax me in the future, so this check is just another belayed form of debt.


----------



## CoryKS (Jan 26, 2008)

upnorthkyosa said:


> I'll take the money and pay down my student loans. The sad reality is that I'll be taking debt to pay off another debt. The government has no other way to pay for this other then to tax me in the future, so this check is just another belayed form of debt.


 
True.  But since they are giving it to you out of the money they've already taken from you, it's a draw if they tax you for it.  Plus your loan will be smaller.


----------



## Makalakumu (Jan 26, 2008)

Yes, but they'll also tax me (and my kids) for the interest...and pay that interest to the Fed...a private bank.


----------



## CoryKS (Jan 26, 2008)

upnorthkyosa said:


> Yes, but they'll also tax me (and my kids) for the interest...and pay that interest to the Fed...a private bank.


 
Always look at the daaark si-ide of life! *whistle*


----------



## Makalakumu (Jan 26, 2008)

CoryKS said:


> Always look at the daaark si-ide of life! *whistle*


 
Yeah, I know.  

On the other hand, its something that Americans cannot afford to ignore anymore, IMHO.  I'm so cynical about this, I've joined the dark side(registered Republican so I can vote for Ron Paul in the primary).


----------



## Carol (Jan 26, 2008)

People that pay ~$22,000 or more per year in taxes will NOT get the rebate, but people that pay NOTHING in taxes WILL get the rebate.

Personally I think thats a heapin' load of (insert derogatory expletive here).


----------



## Rich Parsons (Jan 26, 2008)

terryl965 said:


> Is this free money or a loan against next year tax refund? Like it was a couple years ago.




It is never Free. 

If you do not pay today, we will pay more tomorrow. 

We should pay more today, to take care of the National Debt.


----------



## Rich Parsons (Jan 26, 2008)

Andrew Green said:


> I'm really not much of a economist, but isn't the recession fears largely do to the huge deficit the US is running under, as well as the huge debt?  Won't this increase the deficit as the government will have less money after giving a bunch out?
> 
> Seems like common sense to me, in order to cut taxes, you need to also cut spending.



I know there is an answer to this already in the thread but here is mine as well. 

It is about the Mortgage issues that should have been obvious to those in the know. I remember people trying to tell me to buy a house twice the size and get some of this interesting financing. Heck even the mortgage companies were surprised by debt ratio and could not understand why I just did not take more. I was fine then, and I am fine now. Hmmm, Slow and steady with minimum risk. Yep I am an engineer.  

As to your questions about the debt and deficit spending, there is some concern about this. When the Federal Reserve produces / releases more money into the system / economy this provides more money for spending but it also causes inflation as the total money has increased. When the Federal Government and the two are not directly connected, give cash refunds in the form of tax rebates or tax refunds they are taking money out of their budget. This budget is about what they can spend. This means they borrow more money and the deficit does get bigger. As the deficit gets bigger the value of the Dollar goes down compared to other monies around the world. 

So while they are tied together they are not directly related. There is an indirect relationship with a complex description of that relationship, that I have not completely grasped myself, and I have friends who are economists and I have bought them Jack and Cokes to talk about this.


----------



## Rich Parsons (Jan 26, 2008)

theletch1 said:


> Because the lenders and borrowes both had the same mindset that far too many in this country have...I want it NOW!!!  Just let me close this deal so I can make my quota/commission and we'll worry about the rest of it later.  Well, it's later and all hell is breaking loose.  Between somewhat predatory lending practices and people who should have (reasonably) known they shouldn't be buying a house when they could barely keep up with their rent this fiasco was a nightmare waiting to happen.  I'm not sure when everyone forgot the old saying "If it seems too good to be true it probably is." but that seems to be what's happening.
> 
> As for the rebate check, I'm a little insulted to be honest with you.  It's like giving a kid a sucker to shut him up for a couple of minutes.  Do something solid with the economy so that I'm stable in the long run and you can keep the check.  'Course we all know that ain't happenin.




This is so true. I heard lots of people talking about the just need to get through this short period of time and then they will re-finance again. 

Poor long term thinking in my mind. I know that many were made this offer and they did not understand the true ramification of their decision. But, I still think it is their responsibility to understand their finances. 

Just as it is for the companies who lend the money to understand the problems. But the guy selling the loan is the one just closing the deal. The other guy who uses that mortgage to back up other deals is just following the process of the company. No one on purpose tried to hurt someone here. They just all got greedy as the other company is doing this and are making money now so we need to as well.


----------



## Rich Parsons (Jan 26, 2008)

CoryKS said:


> Actually, the lenders probably did profit from the loan.  Many loans are sold to other companies, often quite soon after the money has been lent.



This is true. They sell it for points on the loan. They take their money this way upfront in a smaller amount. the buyer is taking the loan for the long term over all gain.


----------



## Rich Parsons (Jan 26, 2008)

Carol Kaur said:


> People that pay ~$22,000 or more per year in taxes will NOT get the rebate, but people that pay NOTHING in taxes WILL get the rebate.
> 
> Personally I think thats a heapin' load of (insert derogatory expletive here).



Do yo have a source or link for these numbers Carol? Iwould be intersted in reading more. 

Thanks


----------



## Kacey (Jan 26, 2008)

Rich Parsons said:


> Decreasing debt ratio is not a bad thing.
> Pay off the Visa and look into a Home Equity loan. These can be a partial benefit as loans go as part of it is a deductible on your tax forms. So having the Home Equity of the same value and usually at a lower interest rate then a credit card is better then just the credit card.





Rich Parsons said:


> Do yo have a source or link for these numbers Carol? Iwould be intersted in reading more.
> 
> Thanks



I've heard several different figures; the last time I heard, it was $300 for people earning less that $3000 (so, people who would get everything back anyway), $600 per person (so, $1200 per married couple) up to $75,000, and $300 per child per eligible married couple.  But every time I look it's something different - and don't forget, this is all speculation at the moment; until it actually passes in the House and the Senate, nothing is fixed.  This article from the Chicago Tribune seems to cover some of the details in the proposal well - at least, it matches what I heard on the news last night.


----------



## Rich Parsons (Jan 26, 2008)

Kacey said:


> I've heard several different figures; the last time I heard, it was $300 for people earning less that $3000 (so, people who would get everything back anyway), $600 per person (so, $1200 per married couple) up to $75,000, and $300 per child per eligible married couple.  But every time I look it's something different - and don't forget, this is all speculation at the moment; until it actually passes in the House and the Senate, nothing is fixed.  This article from the Chicago Tribune seems to cover some of the details in the proposal well - at least, it matches what I heard on the news last night.




Thanks for the information.


----------



## Bob Hubbard (Jan 27, 2008)

Don't hold your breath waiting for these. Congress needs to decide how much pork to add first, since the idea of passing a single item bill is just foreign to them.


----------



## Kacey (Jan 27, 2008)

Bob Hubbard said:


> Don't hold your breath waiting for these. Congress needs to decide how much pork to add first, since the idea of passing a single item bill is just foreign to them.



That is all too disturbingly true.


----------



## theletch1 (Jan 28, 2008)

*Moderator note:*
Several posts from this thread have been split to this thread regarding financial planning.  Please keep in mind that the topic for this thread is the potential income tax rebate for some in the US.


----------



## MA-Caver (Jan 29, 2008)

Well I gotten my W-2 today and through Turbo Tax figured it all out... gonna get a decent sized return. 

As for the rebate... well now after casually talking with someone (just so happens to be a tax attorney --- yeah I know the *IRONY!!*  ) they said that we would have to pay taxes on those rebates next year... 

whell if that's true... I'm seriously thinking of telling the government to keep it... because hey... after I spend (paying taxes on the stuff that I buy with the rebate) I gotta pay MORE? Sheesh. It's like... here's some free money... now go work for it. Well hell, wasn't I doing that to begin with??


----------



## CoryKS (Jan 29, 2008)

MA-Caver said:


> Well I gotten my W-2 today and through Turbo Tax figured it all out... gonna get a decent sized return.
> 
> As for the rebate... well now after casually talking with someone (just so happens to be a tax attorney --- yeah I know the *IRONY!!*  ) they said that we would have to pay taxes on those rebates next year...
> 
> whell if that's true... I'm seriously thinking of telling the government to keep it... because hey... after I spend (paying taxes on the stuff that I buy with the rebate) I gotta pay MORE? Sheesh. It's like... here's some free money... now go work for it. Well hell, wasn't I doing that to begin with??


 
Yup.  That kills me - this is money that was taken from us as taxes.  Now they are going to give it back and tax it as if it was income.  How 'bout paying us interest for the usage, ye thievin' scoundrels?


----------



## MA-Caver (Jan 29, 2008)

CoryKS said:


> Yup.  That kills me - this is money that was taken from us as taxes.  Now they are going to give it back and tax it as if it was income.  How 'bout paying us interest for the usage, ye thievin' scoundrels?


Arr agreed!


----------

