DawgTalkers.net Forums DawgTalk Tailgate Forum Treasury chief: Tax rebate stimulus approved

http://www.cnn.com/2008/POLITICS/02/08/economic.stimulus/index.html

Treasury chief: Tax rebate checks to go out in May

WASHINGTON (CNN) -- Tax rebate checks will begin going out in May, Treasury Secretary Henry Paulson said after the House's passage of a Senate-approved $167 billion economic stimulus package Thursday.

The House of Representatives voted 380-34 to send the measure to the president a few hours after Democratic and Republican senators reached accord and ended a dayslong stalemate over the legislation.

Earlier, two White House officials said President Bush would support the package. The bill will be delivered Friday to the White House, with Bush's signing likely sometime next week, Democratic aides said.

The package, which passed the Senate 81-16, will send rebate checks to 130 million Americans in amounts of $300 to $600 for people who have an income between $3,000 and $75,000, plus $300 per child. Couples earning up to $150,000 would get $1,200.

"My team will be sitting down with the IRS tomorrow, and the IRS, right in the middle of tax filing season ... will be working to get checks out," said Paulson, who helped broker the deal.

Paulson said the process of sending the checks would be completed by the end of summer.

The leadership of both parties hailed the efforts that moved the package through Congress.

"You don't see anybody up here gloating about being a winner," Senate Minority Leader Mitch McConnell, R-Kentucky, said after the House vote.

"There were no winners or losers in this except the American people, who saw us rise above any differences we might have had and work to agreement on what is the No. 1 issue, and that is our slowing economy."

House Minority Leader John Boehner, R-Ohio, said, "The House gave a little, the Senate gave a little. I think that's what the American people expect of us -- to find some way to come together and deal with the problems the American people are facing."

Senate Majority Leader Harry Reid, D-Nevada, called the approval an "example of how government is supposed to work." Reid said, "Legislation is the art of compromise, and that compromise comes very hard sometimes. It came very hard this time."

After the House passed a stimulus package last week, Senate Democrats made a number of changes that Republicans would not accept, saying that they were too big and loaded with special-interest provisions.

After Democrats were unable to break a Republican filibuster threat, the leadership headed back to the negotiating table, finally agreeing to leave rebate check amounts at the House level. (Senate Democrats had lowered them and raised the income caps.) The Senate measure also added checks to more than 20 million Social Security beneficiaries and 250,000 handicapped veterans and their widows who were left out of the original House bill.

The Democrats dropped demands for an extension of unemployment benefits, energy assistance for low-income households and tax breaks for energy providers.

"This legislation is not everything that I wanted," Reid said. "But I am very happy."

While the members of Congress and Paulson applauded the bill's quick passage, a survey found that about one in four Americans (26 percent) said they would spend their tax rebates.

Nearly half (46 percent) said they plan to use the rebate to pay off debt and a quarter (28 percent) would save the money, according to the International Council of Shopping Centers and UBS Securities, which jointly commissioned the study of 1,005 households between January 31 and Sunday.

"The money will go into the hands of lenders rather than retailers," said Mike Niemira, chief economist of the International Council of Shopping Centers.

The crushing weight of Americans' debt load was underscored Thursday when the Federal Reserve reported Americans owed a record $943.5 billion in credit card debt at the end of December.

Including loans other than mortgages and home equity lines of credit, Americans are shouldering a record $2.5 trillion in debt.

That amount increased during the month by a relatively modest 2.1 percent, an indication that Americans have been restraining their spending. E-mail to a friend

Im sure im misinformed but, isnt this the textbook way to create a recession. In the end aren't we just printing money that we cant back?

In theory it could very well lead to a recession, however the government is banking on people putting the money right back into the economy by spending it, thus boosting the struggling economy and in a sense giving the money right back to the government with taxes of spending.

Its a risk, but doing nothing is only going to lead to a recession and republicans refuse to raise taxes, so there you go. Im glad to see this bill was passed by such high margins from both parties.

It's designed to be a loan of sorts...we're trying to fix the problems of a people and system who took out too many loans by giving out loans.

And suddenly the dream of owing a PS3 has become a reality.

Sorry, but that's a lot like saying that you're ate up with credit card debt. So the answer?

Get another credit card?

Look, we've heard how the "tax cuts would stimulate the economy".

Okay, let's break that down. We "cut the govornments income" at the SAME TIME we spend a trillion on a war?



Oh yeah, that makes sense!



And where has that gotten us again? So now we just do "more of the same thing" that got us in this mess to START with????

Sorry, that just don't wash. But at least the senate actually expanded it to people who DO NEED essentials that can't afford it. So at least now, SOME of this money will "flow back into the economy". It's too little too late.

But I think the next nominee the GOP will be running for presidentt pretty much stated the obvious problems with the Bush Tax cuts. Or has he flip flopped on that one yet?.......................

John McCain's Top 10 Class-Warfare Arguments Against Tax Cuts
by Human Events

Posted: 01/16/2008 Print This
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1. “I don’t think the governor’s tax cut is too big—it’s just misplaced. Sixty percent of the benefits from his tax cuts go to the wealthiest 10% of Americans—and that’s not the kind of tax relief that Americans need. … Gov. Bush wants to spend the entire surplus on tax cuts. I don’t believe the wealthiest 10% of Americans should get 60% of the tax breaks. I think the lowest 10% should get the breaks. …

“I’m not giving tax cuts for the rich.”

—Discussion with media, reported in “Bush, McCain Snip Over
Tax Cut Plans,” Los Angeles Times, and “GOP Rivals Bicker on Taxes,”
Washington Post, Jan. 5, 2000.

2. “I have never engaged in class warfare. I am very much in favor of tax cuts for middle-income and lower-income Americans. I’m deeply concerned about a kind of class warfare that’s going on right now. It’s unfortunate. There’s a growing gap between the haves and have-nots in America, and that gap is growing, and it’s unfortunately divided up along ethnic lines.

“I feel very strongly that we ought to have middle-income and lower-income tax cuts, and we’ll be getting into it, I’m sure, later on in this program. Mine are basically comparable to Gov. Bush’s, in some cases far better. But I’m not sure we need to give two-thirds of that tax cut, of that money, to the wealthiest 10% of America.”

—Michigan Republican Debate, Jan. 11, 2000.

3. “I always thought that class warfare was to take away from the rich. I always believed that that was what class warfare was all about. As I said, there are tax breaks and money for the richest in America and the very rich, but I think that it’s clear that there’s a growing gap between rich and poor in America, the haves and the have-nots. And many studies have indicated that, and I think that the people who need it most and need the relief most are working middle-income Americans and that’s what I want to give to them. And at the same time, the greatest benefit that I can give them is to make sure that their Social Security benefits are there. And I also don’t think it’s fair for us to lay a $ 5.6 trillion debt down on future generations of Americans.”

—NBC’s “Meet the Press,” Jan. 16, 2000.

4. “We give the millionaire a $2,000 refund. Gov. Bush gives him $50,000.”

—Quoted in “John McCain: How Straight a Shooter?” by Jeff Jacoby, Boston Globe, Jan. 27, 2000.

5. “There’s one big difference between me and the others—I won’t take every last dime of the surplus and spend it on tax cuts that mostly benefit the wealthy. I’ll use the bulk of the surplus to secure Social Security far into the future to keep our promise to the greatest generation.”

—McCain campaign commercial, January 2000.

6. “I don’t think Bill Gates needs a tax cut. I think you and your parents do.”

—Michigan State University rally, Feb. 20, 2000.

7. “Mr. President, the principle that guides my judgment of a tax reconciliation bill is tax relief for those who need it the most—lower- and middle-income working families. I am in favor of a tax cut, but a responsible one that provides significant tax relief for lower- and middle-income families. And I commend Sen. Grassley for moving in that direction. But I am concerned that debt will overwhelm many American households. That is why tax relief should be targeted to middle-income Americans. The more fortunate among us have less concern about debt. It is the parents struggling to make ends meet who are most in need of tax relief.

“I had expressed hope that when the reconciliation bill was reported out of the Senate Finance Committee, the tax cuts outlined would provide more tax relief to working, middle-income Americans. However, I am disappointed that the Senate Finance Committee preferred instead to cut the top tax rate of 39.6% to 36%, thereby granting generous tax relief to the wealthiest individuals of our country at the expense of lower- and middle-income American taxpayers.”

—Senate floor statement during debate over President Bush’s tax relief package, May 21, 2001.

8. “During the debate on the Senate version of the tax reconciliation bill, I had urged my colleagues that substantial tax relief to middle-income Americans should be our top priority. While I regret that my amendment to cut the top rate by one percent to 38.6% so millions more middle-class Americans would fall into the 15% tax bracket failed on a tie vote, Sen. Grassley did move in that direction in the Senate bill by insisting that the top rate should be cut to only 36%. As a result, I reluctantly voted for the bill but pledged to vote against the conference report should further reductions in the top tax rate be made at the expense of the majority of Americans who are in much greater need of tax relief.

“Unfortunately, the conference report did just that by jettisoning the commendable work both Senators Grassley and Baucus did in crafting a Senate reconciliation bill that provided more tax relief to middle-income Americans. This conference report lowers the top rate cut to 35%, at the cost of delaying, for several years, much needed tax relief for married couples unfairly penalized by our tax code. …

“We had an opportunity to provide much more tax relief to millions of hard-working Americans. . . . I cannot in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us, at the expense of middle-class Americans who most need tax relief.”

—Senate floor statement before voting against President Bush’s tax cut, May 26, 2001.

9. “I am concerned that repeal of the estate tax would provide massive benefits solely to the wealthiest and highest-income taxpayers in the country. A Treasury Department study found that almost no estate tax has been paid by lower- and middle-income taxpayers. But taxes have been paid on the estates of people who were in the highest 20% of the income distribution at the time of their death. It found that 91% of all estate taxes are paid by the estates of people whose annual income exceeded $190,000 around the time of their death. …

“We have no idea what our financial or economic situation will be ten years from now. … We may want to have the flexibility to provide significant tax relief for lower- and middle-income taxpayers. Other unforeseen issues may arise. The point is that we must think beyond the horizon. Making the repeal of the estate tax permanent fails to take these new circumstances into account.

“We will need resources to deal with … responsible tax reform that benefit lower- and middle-income taxpayers.”

—Senate floor statement opposing HR 8, a bill to permanently eliminate the death tax, June 11, 2002.

10. MCCAIN: “Shouldn’t we give relief to average citizens who also are double taxed every single day?”

HOST KATIE COURIC: “But, Sen. McCain, if you listen to Commerce Secretary Don Evans, and he just appeared on this program, working Americans, the middle-class Americans, under the Bush proposals will get a major break. A family of four making $39,000 a year, according to Mr. Evans, will get a $1,100 tax cut for several years, allowing them to plan their individual budgets. That sounds like something that won’t just simply benefit the wealthy.”

MCCAIN: “Well, I think it will. But when you look at the percentage of the tax cuts that—as the previous tax cuts—that go to the wealthiest Americans, you will find that the bulk of it, again, goes to wealthiest Americans. … A lot of Americans now are paying a very large a—low and middle-income Americans are paying a significantly larger amount of their income in taxes. I’d like to see them get the bulk of the relief.”

—NBC’s “Today,” Jan. 7, 2003.

http://www.humanevents.com/article.php?id=24421

on a local level here, with home prices increased 150-200%, our Property taxes have increased immensely, mine went from 1400 to 3200 in just 3 years.

now they just passed some legislature to double my homestead exemption from 25k to 50k (saves me a whopping $200 ) Then all of a sudden the Police and Fire Departments are up in arms that the loss of tax base will cause layoffs.

My question is, if my taxes and everyone else's taxes doubled in just 3 years, and I know for a fact the police and fire dept. did not double their budgets or staffs, why is a 8% cut in taxes making all that much of a difference.

I swear, sometime it seems people just need something to cause a stir, because living in a peaceful society would be too complicated.

I'm buying a traveling cover for my Bass Boat, and BEER

Your first analogy is dead on - if you're mired in debt, you don't go get another credit card. Right on and I agree.

However, the rest of your post is somewhat like " ".

First off, you state we have started a "trillion dollar war". http://zfacts.com/p/447.html This is just one article that states that, as of this time, we are no where near $1 trillion in war cost. That will go up, no doubt, but your statement of a $1 trillion war was a touch misleading.

Also, the article you posted had to do with, and quotes were from, the year 2000. Is there noting more recent?

As well, keep in mind that, while the article states that the tax cuts - 60% of them, went to the top 10% of income earners, the fact remains that the top 10% of income earners pay over 64% of the taxes.http://www.rushlimbaugh.com/home/menu/top_50__of_wage_earners_pay_96_09__of_income_taxes.guest.html

Now, granted it's from Limbaughs site so I'm sure you'll refute it. However, it is established that the top 10% pay over 64% of income taxes. Now, if you grant an across the board income tax cut, who do you think will get the highest dollar figure of tax relief? Bravo - the ones that actually pay it.

I think what you are looking for is "income tax breaks for the poorest americans", which would equal welfare to be honest. If you don't pay it in, you can't get it back. If everyone got a 10% discount on their taxes, the guy making $20,000 gets a little, cause he pays a little. The guy making $200,000 gets more, cause he pays more. See how that works?

If it is a tax break, damn straight the people that pay ought to get the break. If it is welfare - well, that's a different story.

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"I Call You My Base"
President Bush's new budget will top $3 trillion. It envisions massive deficits for fiscal years 2008 and 2009 — nearly matching the record in 2004, when the federal budget went $412 billion into the hole.

The average American might properly ask, "Shouldn't we at least have something to show for all this?" Even the basics are missing — for example, health coverage for all children, a serious effort against global warming, bridges that don't fall down. Where has the money gone?

David Cay Johnston provides some answers in his angry and brilliant book, "Free Lunch." An ace investigative reporter, Johnston explains: "From those leaves in the park to textbooks to highway bridge maintenance to food safety inspections, money is dwindling because so much has been diverted to the already rich through giveaways, tax breaks and a host of subsidies that range from the explicit to the deeply hidden."

These diversions started in the Reagan years, according to Johnston, and Democrats have played their part. But the massive transfer of national wealth to the tippy-top became religion in the Bush administration.

Johnston recalls Bush's famous remarks to a white-tie crowd at the Waldorf-Astoria during his 2000 campaign. Referring to his audience as the "haves and have mores," he said that "some people call you the elite. I call you my base."

Bush gave the "base" some very big tax cuts in 2001 and 2003. The cuts were supposed to boost the economy and probably helped, but they never generated enough revenue to pay for themselves. When higher collections helped lower the 2005 and 2006 deficits, the administration credited tax-cutting magic. Most economists disagreed, citing an upswing in the business cycle, bolstered by a housing bubble.

And contrary to conservative legend, the Bush tax "reforms" did not raise the overall income-tax burden of the very rich.
The administration cleverly claims that the share paid by the top 40 percent is higher than it was in 2000 — which is true. It neglects to add that families at the tiny pinnacle — the top tenth of 1 percent (who made at least $1.7 million in 2005) — have seen their tax burdens decline significantly. In 2005, this group of 300,000 men, women and children made nearly as much money as all 150 million Americans in the lower half.

So the high earners below this super-elite accounted for the entire heavier burden of the top 40 percent. These are the members of the upper middle class — the doctors, lawyers and businesspeople who have to work for their money.

As Johnston brutally documents, the free-market posturing of the Bush administration is a total sham. The government has become the enricher of the already rich, not the other way around.

For the connected, government gives away public land at deep discounts. It jiggers the tax code to make moving factories to China more profitable. It undoes safety regulations that subtract from the bottom line. It weakens consumer protections, letting financial institutions prey on the unsophisticated and the not-very-bright. In fine-print legislation, it shifts risk from the corporate managers onto investors and makes the taxpayer cover their mistakes. There's a reason why the number of registered lobbyists in Washington has more than doubled to 35,000 since Bush took office.

The rising cost of Medicare is troubling and must be addressed. But isn't it interesting that Bush sees this middle-class entitlement as the budgetary outrage that needs his immediate attention? His budget would make deep cuts in the Centers for Disease Control — and eliminate a $301 million program that trains pediatricians at children's teaching hospitals.

That's stuff for the ordinary folks. The have-mores will do just fine.

Not overly thrilled, but...my TV just kicked the bucket so I will pump mine back ino the economy.

Any suggestions on a good flat screen HD 35-40" for less than a grand?

I'm with you there Floridafan. The county government is screaming about that silly vote. That and the rollbacks that were issued last year to '05 tax rolls. It's almost comical to watch my county commission yelling about how broke they are.

Just more of the same stupid Fed. Govt. that we have had for the last 30/40 years .. Total lack of any kind of economic logic . Scary part is looking in from the outside , I don't see where the Country is going anywhere but down hill .. Starting at the top ; you get McCain " Bush two " / Hilary or Obama ????? Sad state of affair's.. The Congress is full of Dumb and dumber

I'll get a lovely little check ...... and I guess that maybe now I can keep up with the poor and get a 2nd TV now.

Heres a low-down on the stimulous package


Juicing the economy will come at a cost

Boosting economic growth is great, but it's not free and it's not guaranteed. Lawmakers need to weigh the cost of any stimulus package with its benefits.


By Jeanne Sahadi, CNNMoney.com senior writer


It's hard to quantify the economic boost to the economy. But one thing is clear: It will come at a cost.

NEW YORK (CNNMoney.com) -- Within weeks, lawmakers hope to pass a package of measures intended to minimize the effects of a recession. While there's little agreement on how much such moves would boost the economy, one thing is certain: They will come at a cost.

Initially, President Bush and leading Democrats have indicated they envisioned stimulus measures - cash rebates, business breaks and other proposals - worth roughly $150 billion. Some experts think the final number could be closer to $200 billion.

Even if the stimulus package proves wildly successful, however, it won't pay for itself in full, at least not in the near term.

The Congressional Budget Office estimated Wednesday that the federal budget deficit this year will increase to $219 billion or 1.5 percent of gross domestic product - and even more if increased military funding is approved. And that doesn't count the cost of a stimulus plan.

Stimulus will bump that deficit up, but not necessarily dollar for dollar. Here's why: If the stimulus effort works, the increased economic activity will generate federal tax revenue.

The CBO estimates that every dollar in a well-designed stimulus package could generate a dollar in gross domestic product. For example, if that extra dollar in GDP yields 20 cents in taxes, then only 80 percent of the cost of a stimulus package would be added to the short-term deficit.

Large budget deficits leave the government with less flexibility to pay for its programs without borrowing. But increasing the deficit in the short-term is not the worst thing, some experts say.

"The whole point of fiscal stimulus is to run a deficit [to get the economy going]," said economist Josh Bivens at the liberal Economics Policy Institute.

What's more important than a given year's deficit, Bivens said, is that the ratio of debt to GDP remains stable.

In other words, if the target is to have an average deficit that doesn't run higher than its current level of 1.5 percent of GDP, the deficit could be higher some years when the economy is weak and lower when the economy is strong.

Some lawmakers want the cost of any stimulus measures to be offset by other revenue-raising steps, such as raising taxes. But proponents of the stimulus package note that it would defeat the purpose to spend money to stimulate the economy and at the same time replace it.

Those who oppose adding to the deficit point to the growing burden on federal coffers to pay for Medicare and Social Security, the costs of which will balloon in coming years unless lawmakers reduce the growth in government spending or raise taxes.

Of course, there's another way to view cost in the stimulus debate: How much will it cost the country if the economy continues to slide and Congress takes no action?

Former Treasury Secretary Larry Summers told lawmakers last week that several hundred thousand jobs could be lost and the average family might see a drop of about $1,000 in income if Congress doesn't pass stimulus measures.

By contrast, if a stimulus package is successful, Mark Zandi, chief economist of Moody's Economy.com, thinks it could add 700,000 jobs and cut the unemployment rate by half a percentage point by mid-2009.

"While a stimulus package will cost us, it's going to cost us much less than doing nothing," said Zandi. He estimates that even a mild recession could cost federal coffers $300 billion in lost tax revenue - double the cost of the stimulus package being discussed on the Hill.

What's not clear is the cost to the economy if a stimulus package that comes too late - a real concern since legislation could get bogged down by politics.

Recessions are hard to detect. They are officially identified based on economic data from past quarters. So there's a risk that stimulus measures could take effect when the economy is actually in recovery.

And that could increase the risk of inflation. Putting more money into the hands of consumers at a time when the Federal Reserve is making money cheaper to borrow by cutting interest rates can push prices up because it increases demand for goods.

Wages aren't likely to keep pace with the price increases, demand and productivity would slow and - you guessed it - the economy could swing back into another recession.

I am no economist, that's for sure. But this whole idea of a stimulus package makes no sense to me. Reimburse us for purchases made. Then there is a guarantee of money going back into the economy to give it a boost. As things stand, there is a lot of loot that will be socked away or spent on paying off bills. Hardly stimulating.

Don't get me wrong...I take my check. Plan on taking a trip to Dallas in June. I'll spread that rebate around at the local pubs with enthusiasm.

I'm with ya there. My check (and my lady's) will be split and going into a savings account and our retirement accounts. Getting everything set up is a pain, but it will make things so much easier in the long run. No spending for us. Take that Mr. Bush.

It's very hard for me to save as it is. When I got laid off recently I had to sell stocks and my savings account went down to nothing. I had to borrow money from my sister so I owe people on top of things. I had built my savings up pretty good and then my wifes car took a crap on me so we spent $4000 on a good used one for her over the summer. Then I got laid off unexpectedly 2 weeks before christmas and bye bye savings.
I got a school check a week ago and had to spend that on my increased unpaid bills and debts I owed my sister and family, but I am slowly coming back up.
As for retirement I do have a 401k plan that takes 7% of my paycheck each week, so thats building up too. My big thing is I WANT my own house and thats what we are trying to save for, but every time we get comfortable something happens and BOOM,,gone So any money I don't count on goes right into savings. I am working on setting up where anything about a certain dollar amount is deposited into my savings account, and 10% of my wifes pay will be direct deposited into my ING account. This way if I work OT and have a good week with business commission that extra money I never see. Plus I started working on the side with Brownsbabe, so any money earned there is all for savings for the house. We have a strict budget for the near future till we get totally above water again.

There is a Max and Min for income levels. You are correct there. But the minimum does say that recipients that have earned at least $3000 but DID NOT pay taxes will still receive a check. As well as those on VA disability and Social Security incomes. Not sure, but I know there are at least some people on SSI that do not pay taxes on that income.

I'm not saying they should pay taxes or should not. But just pointing out that your statement is incorrect about those who don't pay taxes not getting checks.

February 12, 2008


A list of the unstimulated


The Tax Policy Center estimates that about 10 percent of Americans won’t be getting a rebate check this spring. With the aid of Chad Stone, the chief economist at the Center on Budget and Policy Priorities, we’ve identified some would-be economic stimulators who are in for some disappointing news:

Disabled people: If you weren’t a veteran, disability itself won’t get you the check, even if you’re living on about $600 a month in public benefits, as many are.

College students and the very poor: If you made less than $3,000 this year, forget about it. Public benefits don’t count—it has to be earned income.

The unemployed: Senate Democrats, joined by some Republicans, tried but failed to include extended unemployment benefits in the package. If you’ve been unemployed all year and didn’t make $3,000, you get nothing.

Tax fudgers: Waiters, cabbies, street vendors, personal trainers and others who work largely in cash may get dinged if they under-report their income. A single taxpayer reporting $14,950 in earnings and taking the standard deduction gets a $600 check; report less and you get less.

Off-the-books earners: Prostitutes, drug dealers and loan sharks may be big indirect recipients of stimulus funds, but they won’t get checks themselves unless they’re reporting their earnings on their 1040s (in which case the lack of rebate checks may be the least of their worries).

Political refugees, foreign workers, green card holders: Congress required a Social Security number to get the stimulating checks, which eliminates folks applying for citizenship who haven’t yet gotten an SSN.

The rich: Last, but certainly not least, the rich get the stimulus shaft. Benefits start to phase out above $75,000 for a single filer and $150,000 for married ones.



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Quote:

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A list of the unstimulated

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Is this a list of old married guys?

No it's one of old married woman

I like the title better than anything else!