Economic Incentive Rebate

[Ginevive]

We are paying off debt I don't see why people think that it is such a dismal thing to pay off debt. We take out loans for things, and get the things, that we would never have been able to own if it weren't for the lenders. Then we gripe about paying it back with the interest that we agreed to when we signed that promissory note (that we DID read... riiight?) lol. I have vowed not to go into anymore debt until we balance out what we owe now, and this makes me feel good; that we are building our credit as a young married couple.
But what is this about it having to be paid back next year? if so, I will send it right back. I don't need or want a forced government loan put onto us.

[gmcclurelssu]

i think its a bit humerus how this is supposed to be an economic stimulus, but it seems most people are planning on paying off debt. just seems to me that while these things do help people, it will most likely do very little in the way of stimulating out economy.
(words of a Bio student, not and econ. major)

[soy.lor.n]

Leave it to the IRS to lie with technicalities. The reason it won't alter your filing next year is because it is part of the base tax calculation, and not a bottom line adjustment.

And no, there is no such thing as free money. If you get money you didn't pay in, then someone is paying in that isn't getting money.

Yeah I don't know if anyone has heard, but we're trillions of dollars in debt. If we're handing out billions of dollars, that's just going to be more debt that we'll eventually have to pay for with higher taxes.
Not to mention the interest.
OH GOD the interest....

Oh and I don't get one because they don't consider my fellowship to be income in this regard. Although strangely enough, they did see it as income when it came to PAYING taxes...interesting...

[daniel1983]

We will be using our incentive rebate to restock our savings from our tax bill.

We owed the IRS alittle over $2200. But we will get back $400 from the state and the $1200 incentive from the IRS.

Another reason to go to a uniform tax system on all good and services and NO income tax. After all is said and done, I will only be paying the government $600 yet they will probably spend that tax money on processing each of my incoming payments and outgoing payments.

Our government needs a kick in the ASS!!!

[ctrlfreq]

I don't see why people think that it is such a dismal thing to pay off debt.

The main reason is because debt payments don't do anything to stimulate the economy (in fact, much of this money will head directly out of the US economy), and that's supposedly the whole point. It's the responsible thing to do, but it's of the day-late dollar-short variety, in that we wouldn't need stimulation if we were all being responsible in the first place.

But what is this about it having to be paid back next year? if so, I will send it right back.

You won't have to pay anything back next year, since this money is technically an overpayment you've already made.

How this incentive thing works is as follows:

1) Congress critters decide they want to see more spending to stimulate the economy, so they lower the tax rate on the lower tax brackets.

2) The lower tax rate is then pro-rated based on how much has been paid in this year already. People who are below the bracket get nothing, those in the bracket get a % based on their payments this year, those in higher brackets get the full amount of the adjustment (those in the highest brackets are a wash, since their tax liability is not going to be drastically effected enough to matter).

You can, of course, send your check right back and give the government an interest-free loan, if you like, but it makes more sense for you to invest that money, get some return on it (or pay debt and avoid the associated negative-returns).

So, as for the "it won't effect your refund next year"...lies with numbers...always lies with numbers.

[Ginevive]

Thanks for clarifying that for me. I am not sure how much I will qualify for since I haven't looked into it yet based on our joint income last year.

[nevohraalnavnoj]

We will be using our incentive rebate to restock our savings from our tax bill.

We owed the IRS alittle over $2200. But we will get back $400 from the state and the $1200 incentive from the IRS.

Another reason to go to a uniform tax system on all good and services and NO income tax. After all is said and done, I will only be paying the government $600 yet they will probably spend that tax money on processing each of my incoming payments and outgoing payments.

Our government needs a kick in the ASS!!!

Hooray for flat tax! 1) Drug dealers/hookers etc are now subject to tax 2) so many people-hours are wasted on the current tax code.

PS "kick in the ASS" implies you will vote neither Democrat nor Republican. :-)

JonV

[nevohraalnavnoj]

It's the responsible thing to do, but it's of the day-late dollar-short variety, in that we wouldn't need stimulation if we were all being responsible in the first place.

Here I will have to disagree with you. Our need for economic stimulation is made worse by people's fiscal responsibility. Our entire economy is based on people continually buying junk they don't need so that someone else will have a job and buy junk they don't need and the cycle propogates....i mean really, sit down and think about it. When you buy Oxy-Clean, that ensures Billy Mays has a job for the next 6 months selling stuff on TV. Then Billy Mays can go out and buy XYZ so that WVU has a job...and on and on.

I will concede the point regarding the housing market and the whole sub-prime mortgages, though.

I think back to my days studying Chinese philosophers (Chuang Tzu, for example). I apologize if I don't get this 100% correct, but according to that philosophy it would be "good" for us all to do pretty much nothing. We'd "own" nothing, but we'd also "owe" nothing. We would just "be".

In the west our philosophy is the opposite. It is "good" if we all "own" lots of stuff and as a result we tend to have a lot of debt.

Sorry for the rant, I guess my point is that our economy is dependent on propogating a culture of buying stuff you don't need.

JonV