The Stimulus Package...
I just got a letter in the mail describing how the IRS is riding in on a white horse to save 130 million Americans with a small pittance. The so-called economic stimulus payment will be available for anyone who earned between $3,000 and $75,000 last year and anyone who had a tax liability greater than zero. If your tax liability was less than $600, then your payment will be whatever that amount of your $0 < liability <$600 was...
I looked on the IRS Webpage about it, and saw this little line near the bottom, regarding the notices they will send.
"Taxpayers will need to save this notice to assist them when they prepare their 2008 tax return next year."
Well, completely disregarding the fact that the IRS is going to send the notice and the payment check separately, which is a complete waste of postage, I wonder why it is we would need to hang onto it to "assist" us in our 2008 return? My only theory is that because we are going to have to pay back this handout in some fashion, either in full or as taxable income.
It's an issue not being discussed and in the whole discussion of the stimulus package helping out the Americans hardest hit by this phantom recession, not one of our benevolent elected officials has mentioned how this $600 handout was going to be paid for. Don't get me wrong; I support a lowered tax burden wherever I can. But the federal budget, like any fiduciary matter, is a zero-sum game. Therefore, I can foresee only the following possible outcomes when the piper comes to collect payment for piping so spryly and vigorously:
1. Existing federal programs will need to be cut. Not likely, since in the 7 years of the George Bush presidency, the size of the federal government has nearly doubled in terms of revenue spent. There were a few piddly cuts made for the FY2008 budget, but those were in such unimportant things as education, government-assisted living and other non-cool things like that. And even those were more akin to saving a quarter on gas to justify spending five dollars more on lunch
2. We will have to just pay the money back directly next year. This one is a very likely possibility, since it happened with the last stimulus check handed out in 2001. And with reading that line up there, I kind of foresee that happening again. And if it does happen again, I just sure hope our economy isn't really in the shitter come April 15, 2009.
3. Our government borrows the money from the National Bank of Middle-Eastern and Asian Countries. I am sure they have every intention on paying them back, but when interest payments alone make up 8% of the federal budget, I kind of wonder how long we planned on keeping up the minimum payments on our Federal credit card bills.
4. They raise taxes. Well, actually, to pay it back any other way than cutting programs, it would ultimately mean raising taxes. Because even when we have borrowed as much as we can, the payments will continue to come due. It seems kind of counterintuitive for us to keep a little more money now at the cost of paying it all back plus more later, but it is appropriate in the whole "I'll work on it tomorrow" frame of mind that exists in our culture. They basically gave us a cash advance that will cost more to pay back later. I can just only hope that the payback is just cleverly disguised so we aren't so harshly reminded of it.
To everyone who reads this who has a taxable income: Be sure to adjust your withholding accordingly to compensate for the amount of a "stimulus payment" you receive. At the very least, just keep in mind the very real likelihood that you will have to deduct it from or pay it back on next year's tax return. Or, you could make it easier on yourself and just put the check away into a savings account until next year. I know that runs counter to the purported function of the payment, but I seriously doubt that a $300-$600 check sent to everyone will give our quasi-lagging economy the kick it really needs to get us out of this funk, especially since most people I have talked to said they are going to use it to pay off debts anyways...
That is all. I am shocked if any of you actually read all of this long and pointless rant about something as boring as taxes.
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ixnayonthetimma) wrote,
