Posted on 01/26/2008 9:08:53 AM PST by Responsibility2nd
WASHINGTON (AP) - Most taxpayers could expect a rebate of up to $600 starting in mid-May under the economic aid plan set to go through Congress within weeks. Couples could get twice as much, with even more for most families with children. All that, however, depends on smooth sailing at the Internal Revenue Service, and the agency already is up to its eyeballs in filings and refunds. economy
The Treasury Department says that despite the strains of tax filing season, the IRS will be able to begin delivering the payments within 60 days after President Bush signs the plan into law, and complete the process in approximately 10 weeks, possibly sooner. The payments would come separately from regular tax refunds.
"The IRS has already begun trying to prepare for this," said Andrew DeSouza, a Treasury spokesman. "They'll be ready to go."
But figuring out if you qualify—and for how much—can be complicated, thanks to confusing rules designed to get the money to middle-income workers and ensure it also benefits low-income people who are most likely to spend the cash.
"Almost everyone who earns income will receive some benefit," said Douglas W. Elmendorf, an analyst at the Brookings Institution. "The idea is to target the money on the people who will spend a large share of it, and to target it on people who are likely to be hurt by an economic downturn."
People who do not make enough to pay taxes but had at least $3,000 in earned income would get $300. Those earning less than that would be disqualified, as would the wealthiest. Older people living solely off Social Security checks would not get the rebate.
Individuals with adjusted gross incomes of more than $75,000 and couples with income exceeding $150,000 would get smaller checks. Contributions to individual retirement accounts, 401(k) retirement accounts and health savings accounts would not count toward the limits.
About three-quarters of those eligible for the checks are working people. About one-quarter would qualify solely through pension or interest income, such as retirees or people who are unemployed. Eligible people would get at least $300.
For middle-class people, the rebates are fairly straightforward. Most individuals would get a $600 rebate, couples would get $1,200, and those amounts would rise with the size of their families. High- and low-income people, however, would get only a partial benefit.
People with income less than $75,000 would get a rebate equal to the taxes they paid in 2007, up to $600. Couples with income less than $150,000 could get up to $1,200. Those who earned more than $3,000 but owed little or no taxes would get a flat $300, or $600 per couple.
So a low-income family of four—with $35,000 in income and virtually no tax liability—would get $1,200. That includes the flat $600 per couple and $300 for each child.
A single person earning minimum wage would receive the lower rebate, $300.
A single parent of two with income of $38,000 and a tax bill of $433 would get $1,033—a $433 tax rebate plus $300 per child.
To focus the payments on middle-class people, the plan includes rules that reduce the rebates for those with higher incomes. For each dollar over the limits, the payment goes down by 5 percent.
That means that while a family of four with income of $95,000 would get $1,800—$1,200 for the couple and $300 for each child—a family of four with income of $160,000 would get less, and the same family making $200,000 would get nothing.
Income of $160,000 would put a family $10,000 above the income threshold, reducing the benefit by $500 for a rebate of $1,300. The wealthier family, which falls $50,000 above the threshold, would see its rebate vanish under the formula.
Similarly, a single person with no children who had $16,000 in income would get $600, while the same person making $85,000—$10,000 above the limit—would get just $100.
People would not have to work to receive a rebate. A retired couple owing $4,000 in taxes would get the full $1,200; if they owed no taxes, they would receive only half that. If the couple earned less than $3,000, however, they would be ineligible. That includes 20 million older people whose only income is their Social Security checks.
The plan would allow people who do not qualify for a rebate this year to get one in the spring of 2009 if they become eligible based on their income level or tax liability in 2008. That has been a standard feature of past rebates, although it does nothing to stimulate the economy.
Some 40 million people who file their tax returns online could start getting payments by direct deposit in May. Congressional tax analysts say the government can send out up to 9 million paper checks a week. The IRS will have to reprogram its computers to calculate who gets the rebate and how much they will receive.
"They sort of learned how to do this last time," said Jason Furman, a Brookings economist, referring to the last round of rebates in 2001.
"It's definitely complicated if you're trying to understand it, but it's not actually going to be complicated for people because they're going to get a check from the IRS without having to fill out a single form."
Still, the agency is already working overtime processing tax returns, and rebates will have to take a back seat come April, when it will be overwhelmed in the run-up to Tax Day.
"The two final weeks of tax filing season are very, very high-traffic weeks for the IRS," DeSouza said. "We'll just have to see what capacity they can handle."
Why am I not surprized?
This will turn out just about like the bilking of the US Treasury that took place in LA after Katrina. The biggest “victim” will be the US taxpayer, as usual, because the low-income cheats have had generations to perfect their art of scamming the US government. They know no one every goes to jail because they are “poor,” thus giving them the right to steal from the public trough. And they are Democrat voters in an election year, so Katy bar the door!
Isn't that sweet. Hardworking people who happen to pay most of the taxes to support the bottom half who pay jack S*&! get nothing. Redistributionist BS!
Don’t forget... The people who use the most services, people with kids, get the most money. The people who use the least services, singles without kids or couples without kids, get the least money.
And poor seniors get nothing. (that’s gotta hurt)
So our politicians are admitting that getting our own money back is an economy stimulator. By that logic they should reduce taxes so we can keep more of what they would otherwise take.
An oldie I have lying around........
...Maybe reading THIS will help you to understand how TAX refunds work.
Five thousand people go to a baseball game, but the game was rained out, therefore a refund was due.
The team was about to mail out the refunds when a group of congressional Liberals called and complained that they should really be sending out the ticket refunds based on the Democrat National Committee’s interpretation of ‘fairness’.
Originally, of course, the refunds were to be paid based on the price each person had paid for the tickets. Unfortunately that meant most of the refund money would be going to the ticket holders who had purchased the most expensive tickets. That, according to the liberal ideal, is considered totally unfair, so a decision was made to pay out the refunds as follows:
1. All people in the $10 seats will get back $15.
...After all, they have less money to spend on tickets to begin with. Call it an “Earned Income Ticket Credit.” Persons “earn” it by having few skills, poor work habits, and low ambition, thus keeping them at entry-level wages.
2. All people in the $25 seats will get back $25,
...because it just “seems fair.”
3. All people in the $50 seats will get back $1,
...because they already make a lot of money and really don’t need a refund. After all, if they can afford that $50 ticket, they must not be paying nearly enough in taxes.
4. All people in the $75 luxury box seats will each have to pay an additional $25.
This is called the “Alternative Minimum Ticket Tax”.
5. All people walking past the stadium that couldn’t afford to buy a ticket for the game each will get a $10 refund,
...even though they didn’t pay anything for the tickets originally. They need the most help. Also known as Affirmative Action.
...NOW do you understand?
...If not, please just contact Rep. Nancy Pelosi, Sen. Teddy Kennedy, Sen. John Kerry or Sen. Hillary Clinton. I am SURE they will be happy to explain the ‘fairness’ of all this to you.
What I’d like to know is why the IRS refuses to report illegal immigrants?
REBATES? nice gesture, but it is our money anyway. Besides this is a quick fix to a problem that needs long term solutions. There is a lot a waste in washington including human waste. Shut down the earmark scams, redirect these monies toward re educating work force and new industries in states hard hit by the new world economy, lower corproate taxes, allow drilling and refineries built for energy dependence just to name a few. These idiots in Washington think we’re dumb as rocks, but I do think we are waking up, at least I hope so. Throwing money at us is like the democrates three month moritorium on the mortgage nightmare after three months its still there. Keep throwing money at the poor and failed policies you will never create insentive by doing this either.
I feel so cheap.
I’m seriously considering a RETURN TO SENDER.
My wife and I don’t make a lot of money. I’m a sales office manager, she’s a school teacher. We just don’t need this gimmick.
“most taxpayers” will get refunds. But the people who pay the “most taxes” are not going to get a refund because they make too much. We have two in college now and could sure use the money, but we are over the income cap and are ineligible.
On the bright side, it makes me feel warm all over to fork over another chunk of my income to somebody who doesn’t pay any taxes at all. I love doing my civic duty.
I felt the same way. My mother said she will take our refund!
Great! Let’s steal everything our next generation might earn, and do it before they can fight back.
It’s the national past time, and should be the Florida state motto:
We got ours, so screw the kids!
Wonderful ‘Marxist’ WEALTH-TRANSFER scheme!! No problem though—taxes will just have to be raised on upper income earners (who got NONE of THEIR tax money back) to make up for the extra budget shortfall.
Yes no tax payers are getting a check too which makes me want them to scrap the whole thing.
I wish we could send the check back (for those that even qualify) and tell DC to shove it up there collective arses.
And those that pay the most taxes get little to none. Ain't life grand?
I just wish that Pres Bush would explain WHY high-income earners do NOT DESERVE or have NOT EARNED the right to get some of their VERY OWN money back--and why low (or NO INCOME earners) have EARNED that right and DESERVE to receive money from others.
Golden!
So a mother of 7 who only earns $3,000 a year and doesn’t pay a dime in taxes is handed 24 hundred dollars Scot-free?
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