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2008 Tax Stimulus Package: Senate & House Differences

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If you’ve been following the latest on the economic stimulus package (or tax stimulus package), you’ve probably learned that we’re all waiting on the Senate to approve a bill that is similarly worded to the House’s H.R. 5140, the Recovery Rebates and Economic Stimulus for the American People Act of 2008 (great bill name!). Rather than outline the Senate version and assume you’ll be able to tell the difference, let me just explain the differences.

Incidentally, the latest news is that Senate Democrats can’t get the 60 votes necessary to move past debate (a step known as cloture) on the bill they’ve outlined so a vote will likely have to wait until next week – if ever. If things stall, they will accept the House version.

Latest news is that the Senate has passed its version of the bill, explained below!

Biggest Differences:

The biggest difference is in how the rebate amount would be determined. In the Senate version, individuals would get $500, couples would get $1,000, plus $300 per child with no income cap. The House version was $600 to individuals, $1,200 to couples, plus $300 per child but included caps at $75k for singles and $150k for couples. The removal of a cap also means that two large categories overlooked by the House’s plan would now get a tax rebate: retirees living on Social Security (~20M) and veterans dependent on government benefits (~250k). Those two groups are left out of the House plan because they didn’t meet the income tax paying qualifications.

Some other differences are that the Senate version would extend unemployment benefits an additional 13 weeks beyond the current limit of 26 weeks (something House Democrats tried to get but dropped in negotiations) and it would drop the increase on the dollar limit of conforming mortgages insured by Fannie Mae and Freddie Mac. (This was ultimately removed from the bill the finally passed the Senate)

There’s been talk about how if the Senate isn’t able to reach an agreement soon, that they’ll defer to the House’s bill. I personally think that including retirees and veterans, those missed by the House version, is crucial but the lack of a cap starts giving a money to folks who don’t really need it. While this is about stimulating the economy, I think a greater percentage of the stimulus would get spent if it were given to those on the lower end of the earning spectrum.

Thoughts?

{ 41 comments, please add your thoughts now! }

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41 Responses to “2008 Tax Stimulus Package: Senate & House Differences”

  1. OMFG PPL says:

    There are two sides to any story or situation. The rich pay more in taxes but yet the value of a dollar means less to them because of the quantities they have. The poor want more money but pay little to no taxes and you have the good ol’ middle class families that make it pay check to pay check. You can deduce by common sense or a lack of mental capacity that this bill will be good or bad. You can only expect the outcome but can not guarantee it. If you know the future then holler back because I have some gambling to do.

    In closing, I want my money. Show me the money!

  2. yodalicious says:

    So, what is the criteria for how much you get EXACTLY? What I mean is, for example, in 2007 I was filing single with no dependents. Should be $600, right? I just had a newborn baby in January of 08, so my $600 wouldn’t go as far. Is the government using my tax returns in 07 as the guideline? If so its as if I’m being penalized for the fact that my child was born in 2008. My child will be alive and on earth for 355 of the 365 days of 2008, AND will be one who will benefit from any potential government check that I get, so I hope that someone in my situation would get the whole $1200. Theres alot we haven’t been told about this yet, so I hope we can get some answers soon. I work hard for my $30K a year, and there is a HUGE difference between $600 and $1200 for me.

  3. Anonymous says:

    I take issue with those who imply that the majority of the families in the lower end of this income range would use the rebate in the “sin” industries such as alcohol, tobacco, and gaming. My family and most military families we have known have been in the lower income range for years and our money doesn’t go to those kind of products. You should be careful about stereotyping lower income families.

  4. Yelojackets says:

    All this will do is send money to China and stimulate their economy. Is it really a rebate when the Fed is deficit spending already? Should we be signing IOU’s to receive it?

    If we really want to stimulate the economy, use the money to build roads and the other crumbling infrastructure. I about fell out of my seat when I heard Jesse Jackson say he was against the package and thought the money would be more effective if spent on rebuilding Interstate 95.

  5. thomas bugaski says:

    To better stimulate the economy and reward prudent hard working Americans who, unlike a lot of Americans, who did not pay any taxes, and will be receiving this tax rebate, I propose the following tax stimulous plan.

    Allow a 1 year morotorium on all federal taxes due on withdrawals from 401K, and non traditional IRA’s. This would allow the withdrawal of some of the person’s 401K, and or IRA money tax free for that year. The money would then go into the economy via purchases, or if not, the withdrawal would be deposited to some form of income producing product, thus creating more taxable income to the saver, and more money to invest into the economy.

    If inacted into law I would be highly motivated to spend down my 401K, and or IRA prior to my minimum required age of 70.6 years as is now the law. And I believe millions of other Americans would also be so inclined to do the same.

    This has the result of rewarding the prudent working / saving American with some tax savings, instead of just the same old redistribution of the wealth as seems to be the case in Washington these days.

  6. Angela Hollifield says:

    If you are carrying a child over 17, who is in college, as a dependant, will you get any type of refund for that child?

  7. Children at home still says:

    What I find terribly disturbing is that I have a 16 and a 17 yr old AT HOME in high school and the 16 turns 17 BEFORE the end of the year. That means that I have 2 children that do not qualify for the rebate, yet what they cost for me to raise takes both my husband and my salary to do so. AND our salaries combined hit at 172K which means we will only qualify for a $98 rebate. Yet they withheld over $32,000 in taxes. I usually don’t complain about fairness, but….

  8. Louise Lockett says:

    I live in a senior building,and we have already been contacted for help filling out the paperwork for a fee.

    What I would like to know is if there is a form or forms that need to be filled
    out, where can they be picked up or downloaded.

    Even though I am 69 years, as a retired accountant I think I would be able to fill it out myself. As a senior I am on a fixed income, and spendng $10.00
    for some on to fill out a paper for me. Money that I could use to buy food
    or pay a bill does not appeal to me.

    I would appreciate it If you know where I can get one or some of the forms, so I could give them to some of my neighbors, and help for free those who are unable to fill them out.

    Thanking you in advance for any help you can give me.

  9. anon says:

    my goodness gracious, not being able to support 2 teens on 174K a year, thats ashame. Try raising 2 teens on 40,000 like i do… we are perfectly healthy, happy and rich in other ways. my fat rebate will go right into savings after our backpacking trip that costs us zero save for a few bucks on gas.

  10. Payin more then his share says:

    Check this site on who pays what amount of taxes.

    http://www.ntu.org/main/page.php?PageID=6

    Maybe the rebates should be all differant depending what they contributed?

  11. Payin more then his share says:

    I agree ANON. $172k with kids at home.. I make it just fine with 2 kids and a Grandbaby at home with less the half of that income.

  12. SHERRY says:

    I DISAGREE WITH GIVING OUR MONEY AWAY TO THESE COMPANIES. THE GOVERNMENT NEEDS TO GO TO THE ROOT OF THE PROBLEM. MOST PEOPLE THAT ARE WORKING ARE HAVING A TOUGH TIME PAYING THEIR BILLS AND IF THEY COULD GET AHEAD, MONEY WOULD BE SPENT. THE MONEY THEY GAVE TO THESE COMPANIES SHOULD HAVE BEEN GIVEN TO THE WORKING PEOPLE TO PAY FOR THEIR CREDIT CARDS AND HOUSE PAYMENTS. IF THE WORING PEOPLE COULD PAY ALL OF THEIR BILLS OFF, THESE COMPANIES WOULD NOT NEED BAILING OUT. THE MORTGAGE COMPANIES WOULD GET THE MONEY THEY NEED AND SO WOULD THE CREDIT CARDS. THIS WOULD FREE UP SPENDING MONEY FOR THE WORKING PEOPLE. IT WOULD WORK LIKE CLIMBING A LADDER. THE MONEY WOULD BE PASSED FROM THE WORKING PEOPLE TO THE COMPANIES THAT ARE IN TROUBLE. AS FOR THE STIMULUS PACKAGE, YOU TELL ME WHAT $500.00 IS GOING TO DO FOR US? THAT WILL NOT BUY THESE THOUSAND’S OF PEOPLE A JOB THAT ARE OUT OF WORK. THAT WILL NOT MAKE THEIR HOUSE PAYMENT UNTIL THEY FIND WORK. THESE SMALL CHECKS THAT THEY ARE SENDING OUT IS A JOKE. IF YOU WANT THE ECONOMY STIMULATED, PUT THE MONEY WHERE IS CAN BEST BE USED. IF THEY WOULD LOWER HOUSE PAYMENT OR SEND PEOPLE ENOUGH MONEY TO PAY SOME BILLS, PEOPLE WOULD MAYBE THEN HAVE A FEW DOLLARS TO SPEND. I KNOW THAT A LOT OF PEOPLE OWE ON CREDIT CARDS, BUT WHEN YOU DON’T HAVE A JOB, THE MONEY HAS TO COME FROM SOMEWHERE TO PAY YOUR BILLS.

  13. broken says:

    This comment is about what Steven said.

    Steven

    January 31st, 2008 at 5:13 pm It depends on your point of view. If you are looking at a government “giveaway” then including seniors and veterans is the right thing to do (as an aside, I find it ironic under the House plan that people who pay no taxes can get a “rebate” anyway – how is it a “rebate” ???).

    My husband and I are on SSI, we don’t work because of severe medical conditions and we pay taxes on gas, food, and just about everything that we buy. We also pay property tax, we do pay taxes, but we are not allowed to get any money that we put back into the government. We worked as much as we could when we were younger, but just not enough that they put us on SSI. We do not use the system, or abuse the system but we don’t get any help. We pay our mortgage every month, never went through a foreclosure and pay our bills too on our $11,000 a year income remember we have to pay insurance on both house and car and we are running out and do not want to loose everything but we should get some money back because of all the interest and taxes on everything that we buy and such.

    And sherry was right, help us pay our bills and then the companies would not have to have money given to them. All I would like is a loan that I could pay off, stop using credit and get those bills paid off and just pay one loan off, we have done it before I know we could do it again and just tear those credit cards up!

  14. Rob says:

    I am disabled and only get $883 per month and that’s it !!! So I guess people like me that get social security disability shouldn’t get any stimulus because we don’t pay anything in ? But people like me shouldn’t get any help because its our fault for having a physical handicap. And NO I can’t work part time because social security won’t let me. If I work part time social security says I will get totally cut out. That means I lose all medical benefits and income. I am not able to work full time but I might be able to work 20 hrs a week IF social security would let me. Social Security gives a trial period to go back to work but they will not allow anyone to work part time to have extra income. If you can work part time for a certain length of time then social security considers you not disabled anymore. So just because I can’t work I shouldn’t get a stimulus check ? Its not my fault !

  15. Les says:

    I truelly believe the largest problem we have is allowing all of our companies to move over seas.And all the products we have is made in China,Thailand,Mexico etc. Then we allow all the Hispanics to take our jobs and pay them welfare,And all the gas stations are ran by WHO not americans. The stimulous package is a joke. 500,1200 what is the difference it isn`t going to help. It may keep your house for a month longer or your car for 2 months. If our goverment would stop companies,banks,oil companies etc from increasing the cost for extreme profit.Stop companies from leaving the U S we would be in good shape. But as of right now we are in bad shape all of us even the so called rich.You may have it now but what will happen when everyone else falls. You will gradually be right beside the poor. And blamming everyone else but ourselves like we are doing now….Thank You

  16. Nell says:

    I received two stimulua payment..but don’t know where to return one. Can you help me.


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