Don't get me wrong. I'm all for you and me, not the IRS, having our money. But this rebate mania has to stop.
Word is that House Democratic leaders are putting together a second economic
stimulus package that could cost as much as $150 billion.
C'mon people. Get real about money for once.
So does former Bush 41 Treasury official Bruce Bartlett, who, after the first rebate was approved in January, wrote in a Wall Street Journal op-ed piece:
In short, there is virtually no empirical evidence that tax rebates are an effective response to economic slowdowns. The increased personal saving doesn't help the economy because the federal budget deficit, which can be thought of as negative saving, offsets all of it in the aggregate. The main benefit of a tax rebate would seem to be political -- giving politicians a way of appearing to be doing something about the nation's economic problems that is superficially plausible.
Sure, it would be nice to get some cash back in time for the holidays -- and even if a second rebate is OK'd in November, don't hold your breath for such a quick turnaround -- or, more realistically, to pay holiday bills that arrive after Dec. 25.
But you and me heading to the malls isn't going to get our economy out of the sewer. Spending our way to prosperity is a failed policy. Let it die already.
It's also a costly administrative disaster. At last count, the bill to tell people about the rebates and then process the payments was $862 million. So we'll literally be paying for our rebates for quite a while.
First round of checks going out: Plus, some of us haven't gotten our first rebates yet.
About 10 million taxpayers put off filing in April and will be meeting the extension deadline this week, Oct. 15 to be precise.
Once those returns are processed, another batch of economic stimulus checks will be going out later this year.
Second chances: And if you didn't get a rebate this year, you'll get a second chance to get some money back when you file your 2008 return.
Remember, the rebate payments made in 2007 are actually 2008 tax credits. But they were based on 2007 tax return information simply to get the money out this year instead of next filing season.
If you didn't get a stimulus check based on your 2007 tax situation, or got less than the maximum amount, you might be able to get that money on your 2008 return.
The rebate rules will be the same on next year's return. You can $300 if you're a single filer, $600 if you're married filing jointly, as long as you have income of at least $3,000 from a combination of earned income, Social Security or veterans benefits, or combat pay. Details on the requirements can be found at this special IRS page.
To claim the stimulus payment next year, you'll find a new line on your 2008 return. It's line 70 in this draft Form 1040. You'll notice that it refers you to a worksheet. The exact page number is yet to be determined, but it'll look like the one on pages 18 and 19 in this draft instructions document.
So what do you say, Capitol Hill? Let's just let this first rebate filter through and see if we can implement some of the fixes authorized in the bailout bill and beyond before we start adding more to our deficit total.
Forms on track: If you look at that 2008 Form 1040, you'll notice a positive
Since the tax extenders and alternative minimum tax patch were approved as part of the financial package, the IRS can get its 2008 tax paperwork in order well before the coming tax-filing season.
On page one of the draft 1040 (the adjustments to income section, lines 23 through 37), you'll see the educator expenses and tuition and fees write-offs are nicely slotted into the form. Same for Schedule A and the state and local sales tax itemized deduction.
Similarly, since the AMT income exclusion amounts were upped for 2008, those forms will be updated shortly, too.
So we shouldn't have any unusual form related hassles next filing season. Just the usual ones.