Taxes 
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2008 Tax Rebate Stimulus Package Explained

Money Money Money1/15: The Committee on Appropriations just released the an executive summery of the details of the American Recovery and Reinvestment Plan.

This post refers to the first economic stimulus package of 2008. You can read about the second stimulus package here.

Looks like the stimulus payments will be sent out ahead of schedule, with the 800,000 direct deposit payments on Monday April 28th, Tuesday, Wednesday, and a whopping 5 million on Friday (none on Thursday). The schedule of payments will follow the original schedule, just accelerated by a week.

No doubt you’ve heard the “great” news that a deal on a stimulus package has been reached and that checks will be in the mail as early as May. Whether you believe the naysayers that say we’re really just propping up the Chinese economy (or oil rich nations) because we’re borrowing from them to buy their goods or whether you believe the proponents that say this will boost own economy in magical ways the fact of the matter is a deal has been reached – so what is it? Essentially, it’s a removal of the 10% tax bracket for everyone with some modifications. It includes phaseouts that begin past annual incomes of $75,000 and a component that includes those working Americans that don’t earn enough to pay income taxes.

(Click to continue reading…)


 Your Take 
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Your Take: Would You Spend A Stimulus Package?

There’s talk of an economic stimulus package that may involve some funds going back to low and middle income Americans in the hopes that they’ll spend it, boost the economy, and make everyone who watches stock tickers sleep a little easier at night. Matt Lauer interviewed Henry Paulson, the US Treasury Secretary, on the Today show and discussed the potential stimulus package and brought up a very good point. He brought up a quote in the Wall Street Journal about how the last time this tactic was tried, back in 2001, many low and middle income Americans saved their check from the government and didn’t spend it. (wsj blog article discussing this idea)

That’s what people do, they spend in times of prosperity and save in times of crisis. With the stock market taking a pounding, with the billions in bank write offs, with the sub-prime news, and all the talk of a recession – whether we’re actually in a time of economic crisis or not, people think we’re in a time of economic crisis so I’m inclined to believe they’ll save any money the government decides to dole out.

(As an aside, I love how we’re always going back to Reaganomics and supply-side economics, which was really the last time we truly battle a long period of economic slowdowns, in that case it was stagflation caused in part by oil prices. Tax cuts plus deficit spending… how much longer can we be ripping the golden eggs out of the golden goose before the poor thing dies and China stops buying T-bills?)

So my question to you is, if you got money as a result of the stimulus package, would you spend it or save it?


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