Posted on 01/28/2008 3:12:50 PM PST by Libloather
Looking a gift horse in the mouth
Large number of MarketWatch readers say rebate plan is off base
By Jennifer Waters, MarketWatch
Last Update: 3:33 PM ET Jan 27, 2008
CHICAGO (Menafn - MarketWatch) -- MarketWatch readers have no shortage of opinions when it comes to the stimulus package put forth last week by the White House and the House of Representatives to pump some oomph back into the U.S. economy.
But a surprising theme emerged from the more than 700 responses to a story that asked you to respond to the proposal: Even though the plan would put hundreds of dollars in taxpayers' pockets, many of you said you would rather do without the windfall and keep the U.S. from falling any deeper into debt.
"It seems crazy to me that the government is issuing refunds when our country is trillions of dollars in debt. Don't we actually need to be collecting more money to pay off the debt? Some time we will have to suffer the consequences of our overspending. Pushing the consequences off to the next generation is not a wise choice," posted Slattenk, echoing a large number of other respondents. See the story with all the comments.
"If you would be so kind, please tell Congress that my tax rebate would mean nothing to me and therefore they should put that money, mine and everyone else's, toward paying off the national debt they generate. Thank you," wrote Michael.
Many described the same situation as Alexknight did. "Since my core expenses of housing, utilities, transportation and food are slightly greater than my income, the refund money will provide me with a month in which I don't have to dip into my savings from the '90s to help pay basic bills."
Thebear put it a different way: "Wow $600 whole dollars: either part of my rent or most of my [utilities]. Then what happens next month?? Oh, right, we go back down our recessionary path. So stupid."
On the other hand, Imanamerican was in the camp of those grateful for the rebate and said the check would go to "pay my bills and fix my car, and put the rest in the bank to supplement my living expenses. I just want to say that I would really appreciate this money to help me get by. Thank you President Bush."
Politicians are pushing for this plan because they hope it will spur spending, getting money circulating briskly through the economy again to create demand for goods that will lead to more jobs. But, in fact, many comments reiterated the bill-paying option and taking a stab at reducing some debt -- two choices that won't achieve those goals. Money that goes toward bills and debts is money that already has been spent.
RJC, for one, appears to want to get ahead while planning for a future of spending. "I would pay down my mortgage, put some into savings (probably for a new car and/or vacation). Every little bit helps."
In many polls people say what they think they will do with the money -- pay down debt, give it away, give it back -- but in fact do something more akin to what Houstoneit is doing and that will indeed jump-start the economy: "I'm going to Wal-Mart and buy that Sanyo flat screen I've always wanted!!!"
Eager to comment
Reaction to the stimulus plan lit up the MarketWatch community board hours before a bipartisan group unveiled the package on Thursday and took on a life of its own after the plan went public in the afternoon. The $150 billion package, which still must go before the full House and Senate before it lands on President Bush's desk, is a quick fix legislative leaders hope will put the brakes on what is suddenly looking like a recession. See full story.
Roughly speaking, if the plan is approved, tax-rebates of $300 and up would be in mailboxes by spring or summer. A family of five could be in line for as much as $2,100. The rebates would phase out for single taxpayers who make $75,000 and above and households at $150,000 and higher. Read more.
The comment tide turned, in some cases dramatically, after the White House and the House unveiled the package. Under the proposal, which House Speaker Nancy Pelosi called a "targeted, timely and temporary" plan to put money "in the hands of hard-working Americans," checks would be sent to people who had earned as little as $3,000 last year and paid no income tax but had contributed to payroll taxes.
That didn't sit well with many people -- particularly those whose income exceeds the threshold.
"More Robin Hood Tactics," wrote Bizman. "Rob the rich who power this country, pay most of the taxes, paid attention in school and applied themselves with personal sacrifice for future gain -- to give it to the poor who mostly do not apply themselves, make no short-term sacrifice for future gain, work 9 to 5 and come home and watch TV on a high-def screen which they cannot afford and got it from a cash out 'stated income' loan ..."
Carrion-Luggage had this to say: "REBATE? I wouldn't get a rebate according to this sorry plan but the lazy people who do nothing WILL get money! I pay all the taxes and I get nothing...ONLY IN AMERICA land of the b****** politicians. I'm going to park my money, wait till this country screams like a cat with a knot in its tail and wait for the fire sale! How's that for your economic stimulus!"
A number of people fell into Ton man's camp: "What rebate? Between those hypocritical Democrats trying to buy votes from the poor and middle-class and the spineless Republicans, somehow I had too much income to qualify. If they want to stimulate the economy, then they should have given money across the board on a percentage basis."
"Why is it called a rebate?????????" asked Jjiladkkd. "It's my money to begin with!!!!! Sounds more like income re-distribution to me. The people that pay most of the taxes don't get the rebate while people that pay little or no taxes get the rebate!! What about single parents that make greater than $75,000 and have one or more kids in college?"
Gas guzzling
On the practical side, a number of people said they will, well, pour the money into their gas tanks, like Ididnotvoteforhim. "Fill my gas tank up 5 or 6 times," the post said.
Jackrs must have a substantially bigger auto: "I will use it fill up my gas tank once, and with the rest I'll get a candy bar."
"Groceries and gas," wrote Sbenard. "The things that the Fed doesn't count when it calculates inflation! Can't afford anything else."
Ashkelon had an idea: "What say we all pool our money use it to bulldoze Washington and pick a new city. These fools are digging a deeper and deeper hole. We need to face the music now, live within our means and get this fixed. We are in TROUBLE!"
A lot of people said they would donate the money to charity but more said they would hold on to it to give it back to the IRS next year when they have to pay taxes on their 2008 returns.
Said BN: "I agree with many of the posts that state in one way or another, that this rebate is fiscally irresponsible and a silly way to correct a systemic economic fault. Nevertheless, any rebate I receive will be deposited to my bank account and simply be another addition to my revenue stream. It will not affect outflows, which will continue as usual. I guess if I really walked my talk, I would send it back to the U.S. Treasury ... but that ain't gonna happen."
Eliminating the gas tax would help everyone.
How about just cutting taxes - period. If done correctly, it would help the economy MUCH faster than some hypothetical targeted checks that MIGHT be here in June - or August. A lot can happen in 4-6 months. I thought the idea behind a stimulus package was to actually jump start the economy with quick action.
Cut taxes immediately (with the appropriate change of withholding tables) and taxpayers will see an increase in take-home pay within a few weeks, not months.
Kill the use of corn for ethanol, eliminate or drop the gas tax and stop giving away billions of dollars in lefty pandering programs so tax payers can keep a little more of the money they earned.
How many hundreds of millions will Bush give away tonight in the State Of The Union speech?
The Founding Fathers did not see it as a right of elected federal government officials to extort earned income from workers to redistribbute to those who will vote for them.
Aw, but then we wouldn’t know to bow down to our masters, the Congress and President, in abject gratitude.
Ummm . . . billions. I just read in another article he's going to send $2.2 billion to some international group to help fight "climate change" -- whatever that means.
Hey Michael, would you be so kind as to decide what they can do with YOUR OWN money but not everyone else's? Thank you. You see, Michael, you appear to be operating from a false dichotomy of what will be done with the money, believing that congress will either rebate the money to the taxpayers or use it to pay down the national debt. Unfortunately, what congress has demonstrated again and again is that it is determined to spend the money whether it is there or not. Therefore, if the money is going to be spent regardless, it would actually be more beneficial for congress to return it all to the taxpayers and let them spend it themselves since the private sector nearly always spends money on items with a higher return -- in terms of wealth and economic growth created -- than the government does.
Looking a gift horse in the mouth (Large # of MarketWatch readers say rebate plan is off base)....
nah...giving tax rebates (free money) to people that don’t pay taxes.....not off base at all!!!!!!!
The feds have been trying to inject money into the system through lending at low rates - but the bankers are reluctant to get the credit into circulation. Hence, last resort, put the money into peoples' pockets to get it into the economy. Of course if it is not accomplished by March - forgetaboutit!
The velocity of money has slowed to a crawl, and growth depends on rapid turnover of $.
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