Tax Rebate Details Announced

According to an AP report:

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…

The rebates will go to 117 million families, according to a Democratic summary. That includes $28 billion in checks to 35 million working families who wouldn’t have been helped by Bush’s original proposal, the analysis estimated…

Individuals who pay income taxes would get up to $600, working couples $1, 200 and those with children an additional $300 per child under the agreement. Workers who make at least $3, 000 but don’t pay taxes would get $300 rebates.

While they say that the bill calls for rebates to go to “almost everyone earning a paycheck, ” there are income limits, as follows:

The full rebate would be limited to individuals earning $75, 000 or less and couples with incomes of $150, 000 or less, but a partial rebate would go to individuals earning up to $87, 000 and couples earning up to $174, 000. The caps are higher for people with children.

The package, which will cost about $100 billion, includes about $50 billion in business tax cuts.

This all begs the question of what you will do with your rebate… Save it or spend it?

Update: I’m running a poll on what you’re planning on doing with your ‘economic stimulus’ check.

Source: Yahoo! News

37 Responses to “Tax Rebate Details Announced”

  1. Okay folks… Let’s stay focused on the topic at hand — otherwise I’ll have to lock down the comment form on this article. I’ve gone back through and removed off-topic comments (on both sides of the debate).

    While I realize that this might not be a popular decision, things were starting to get out of hand. Thanks.

  2. Anonymous

    just curious..
    does anyone know if my husband works and i am a stay at home mom, will we be considered individual or couple for this rebate thing. we file taxes jointly, so i was just wondering if they go by that or if i actually earned a paycheck. i earn my paycheck, just not in the tradional way, with 2 kids under 2 1/2 at home.
    thank you for anyone who knows.

  3. Anonymous

    To those that commented about the double tax deduction for children, I completely agree. Having children is a choice, and like all choices should be something that people decide on after looking at all the implications. If you can’t afford them, don’t have them. Not only are we punishing those that choose not to have children, but we also punish those that can not have children, such as reproductive cancer survivers, homosexual couples, etc. If this country had its priorities straight it would end the unfair income tax system and find a more equitable system with no deductions or loopholes.

  4. Anonymous

    Let me get this straight, the Federal Reserve over stimulates the money supply causing a housing bubble. Then people who borrowed too much foreclose on their overpriced houses and overdraw their credit cards. This causes banks to lose money.

    All this spending causes a slow Christmas season at Wal-Mart.

    So what’s the solution to this supposed ‘economic slowdown’ caused by overspending? Send people checks to get the Wal-Mart registers ringing again and (try to) spend our way out of a recession.

    The new circle of life: Congress borrows money from China, sends it to Americans, who then send it back to China buying cheap manufactured goods.

    So this means all of you planning to save your refund money are UN-AMERICAN! Do your patriotic duty and get out there and spend Spend SPEND!!!

  5. Anonymous

    Sadly, I changed jobs (from a contracting job to a W-2 based job) right before Q2 estimated taxes were due and somehow convinced myself that it would all “even out”. Well, I don’t have all my W-2s back or anything, but I think I am looking at a $2k tax bill that I don’t have the money to pay for all of it. I’ll use my refund to help pay back any money I need to borrow to pay this bill.

  6. Anonymous

    I don’t know the underlying intention of the child tax exemptions, but one could argue:

    A) Promotes certain behaviors / values

    B) Incentive to increase birthrate in US

    It has been cited many times over that we will have a labor shortage in the coming years…promoting increased birth rates via tax incentives seems a reasonable rationale for it.

    If I have something I need, I’ll buy it. Otherwise, the rebate will be treated no differently than any other “income” over here.

  7. Anonymous

    I will try to save it, my husband will want to spend it. 🙂 We will work out a compromise!
    As far as kids go, we are raising future workers, of course! Over-population is a myth, sorry. Most industralized countries are struggling with *under*-population. People have stopped replacing themselves, and their economies are starting to feel it big-time!
    As far as it *feeling* like we are running out of room, it *is* getting crowded in our area too. This isn’t from over-population, though. It is from the clustering that people do in suburbia. 🙂
    Apparently, the whole world could live in Texas.

  8. Anonymous

    Because I’m a diligent saver I already have $600 or $1200 (whatever it is I’ll be getting) and I would have already spent it if there was something I needed – so I’ll mostly be saving it. I’m not just going to go out and buy something frivolous like a flat screen TV when the oldie I already have works and gets a really good pic.

    I don’t think I’m the type of person the government was targeting when they wanted to spur the economy – and I figure most of you aren’t either. Cause most everyone here is a saver, not a spender. Most of you, I suspect, will either apply it to debt or save it with your emergency fund – good for you!

    Oh, I do need new tires, so I guess I’ll get those, but it wasn’t like I wouldn’t have bought them anyway.

  9. Anonymous

    Whether or not having kids costs more is irrelevant. If you are already paying in less to begin with because you have kids, why should you get even more back?

    Also, has it been determined yet whether this is actually a rebate and not just a pre-refund for next year?

  10. Anonymous

    Believe me, having kids is more expensive than the $1k tax credit you get per child! I spent that in diapers and formula alone the first year into parenthood.

  11. Anonymous

    Has anyone noticed that all this tax credit does is to further promote overpopulation? I know that people with kids need more money to be stronger consumers and continue to run this capitalist economy, but will we ever start to reward people for not having kids and gain some sort of control on the population?

  12. Anonymous

    This will go into our already-established fund for our vacation this fall.

    Do you think the income limits will be based on Adjusted Gross Income, or some other measure?

  13. Anonymous

    Well, considering this check won’t get here till the summer (at the earliest), I doubt this will have an impact on consumer spending like those in charge want. By the time everyone gets their money, the current economic conditions will have changed.

    Of course, that isn’t the question you asked – I’m going to spend it like they want me to. It’s either going towards a beach house rental or Vegas.

  14. Anonymous

    I think it’ll go into my emergency fund. This will be a nice boost.

    Of course, given our culture, the majority of recipients will do exactly what Uncle Sam expects – and that is SPEND IT on material junk. Although I don’t plan to send the money back, I think this rebate is nothing but a sad way to perpetuate our nation’s economic problems.

  15. Anonymous

    Ours will be going right back to the government… my husband has to renew his Green Card, and which costs over $500. The rest will go towards our first trip to his country in 3 years.

  16. Anonymous

    Will this work the same as the last Bush rebate? Meaning it reduces he amount of my tax refund by the amount of the rebate I receive? For some reason, I think this is how it worked in 2001. The down side is that if you are managing your taxes to break even, you have to pay it back then, right?

  17. Anonymous

    I’ll probably spend some of it, save some of it. It’s unexpected, i.e., not part of this year’s forecasted budget, and I’ve been so good with my money. So good, in fact, that I’m starting to feel like I haven’t had much fun lately. So I’ll deliberate and spend at least a little of it on something completely frivolous, like a Nintendo DS or a new pair of glasses. Then the rest goes straight into the emergency fund.

  18. Anonymous

    “why do people with children get more back than those that don’t?”

    Maybe because they have more basic expenses than a single or couple? If you want to have more money, having more kids is not a recommended strategy, even with the tax breaks.

  19. Anonymous

    Looks like I’m going to pay that car off faster than I anticipated… 🙂 $1500 + the CD I put together just for the purpose of paying off the last $3000 will get me most of the way there.

  20. Anonymous

    All of this is just a short term fix. And truth be told, it has been happening over past 3 decades. Reagan and Clinton have just as much blame as the current administration.

  21. Anonymous

    So, who do people with children get more back than those that don’t?

    People with kids get to deduct them from their taxes when the file to begin with. It’s a double tax deduction!