Getting money to boost the economy??
Moms View Message Board: General Discussion: Archive January 2008:
Getting money to boost the economy??
I have a question about these. It has been said that tax payers will get a check, of course if this is passed..My mom was wondering if she too will get a check in the mail. She does'nt work but she does have taxes taken out of her pension. That makes her a tax payer, right? So she should be included too, right? Does anyone know for sure? Thanks in advance!  I will pass on the info. to my mom!
How Americans in different financial situations would fare under the rebate plan proposed by House leaders and the White House.
1. — An individual with $2,500 in earned income in 2007: Disqualified because income fell below the $3,000 threshold. No rebate.
— A married couple with no children, with adjusted gross income of $100,000 in 2007: Would qualify for the full $1,200 couples. A $1,200 rebate.
— A worker with one child, who earned $9,000 and owed no taxes in 2007: Would qualify for the $300 rebate available to individuals who pay no taxes but earned at least $3,000, plus an additional $300 for the child. A $600 rebate.
— A couple with income of $145,000 in 2007, with three children: Would qualify for the full $1,200 for couples, plus $300 for each child. A $2,100 rebate.
— A couple with income of $160,000 in 2007 with two children: Would qualify for a partial rebate, reduced by 5 percent for every $1,000 in income above the $150,000 threshold. An $1,800 rebate — $1,200 for the couple plus $300 per child — would go down by 50 percent for this family. A $900 rebate.
— A couple with income of $200,000 and four children: Disqualified because their income exceeded $174,000, the phase-out limit. No rebate.
I suppose as a single person with no dependant children but working full time, I will qualify for the full $600 "rebate". I wonder if the rebate will apply based on 2007 earnings or 2006 - because Scott was in school full time for all but 2 weeks of 2006, but will start working full time in a few days and continue through the end of August.
Still, I wish that extended unemployment comp and an increase in food stamps had been included. Those are the people in greatest need and any money that goes into someone's pocket for unemployment comp will be immediately spent (and, by the way, unemployment comp is subject to income tax - it is treated as income); similarly, increased food stamps would go right to local stores and right into the economy.
I have no idea how the person who is on a pension and pays taxes on the pension will be treated. That's a very good question, because the person is a taxpayer, but the income does not come from a present job. I'll be interested to see how that works out, but we'll have to see the legislation first, and even though the President and the leaders of Congress have agreed, there is nothing to stop individual members or groups of members of Congress from adding amendments of all kinds.
I think part of what we have to keep in mind with people in the lower income. On their taxes they receive earned income credit so they don't really pay taxes (they do but get it all back).
Ginny I assume all of this is based off of 2007, but who knows really.
I will believe money is coming when I get the check in the mail!
Here's the answer, pensions do count, since they are taxed, but SS is not. Ginny, the article also talks about the negotiations for the increase in food stamps and unemployment.
I'm not sure if I have this right, anyone know? I am a single mother who earned more than $3000, I get a rebate check on my taxes because of the EIC and child tax credit, so I would get $300 for me. I would then get $600, $300 for each child?
Tax Rebates
SS is taxable, Crystal, depending on one's income from other sources. I know, because being over 65 I am collecting SS, and I am also working full time. I definitely pay taxes on about 80% of the SS I receive, and as my wages go up, a higher portion of my SS is taxable. When one applies for SS, one has the option of having income tax deducted from the monthly SS payment. The article you link points out that seniors living primarily on SS would not collect unless they have at least $3,000 in earned income from other sources.
The article also points out that the present format is an agreement between Bush and Pelosi, and heaven only knows what will happen when it gets into Congress for actual consideration and passage.
I think your personal calculations are correct, at least based on the Bush-Pelosi agreement. The agreement appears to be based on earned income, not on actual taxes paid, which would be because Pelosi wanted to include low wage earners in the deal. (Bush didn't - he wanted to base the formula on taxes paid. I suspect the trade-off was to include low wage earners on the basis of income rather than taxes paid, but not extend the unemployment comp period or increase food stamp benefits.)
Thanks for clarifying that Ginny, I had just noticed it answered the question about pensions. It's silly that SS is taxed, didn't you already pay taxes on that money?? Ugh!
Crystal, I checked with my tax lawyer son because I wasn't sure, and yes, I already paid taxes on that money. According to Greg, the money that is taken from my paycheck for SS and Medicare is treated as taxable income for income tax purposes.
I don't know the details of the "rebate", but at present if you have earned income at the minimum of $3,000 you get the minimum of $300 plus money for each child. (As far as I can tell, they are talking about "earned income", that is, income subject to federal income tax, which is not the same as money earned from a job.) For people whose earned income is more the rebate can go up to $600 (plus payments for each child) to a point, and when earned income reaches a certain point then the amount of the rebate starts getting cut.
It's all so silly. If what the government wants is to get money into circulation - that is, being spent for manufactured goods - then they certainly ought to include the unemployed (though, interestingly, unemployment comp IS treated as earned income - wonder if it will count for the rebate), really low income earners, and the elderly on SS, and give those people the full $600, not the cut-rate $300. Those are people who will turn right around and spend that money on groceries, clothes, and other necessities.
I've been reading newspaper articles about interviews with people, asking them what they'd do with the rebate money (by no means a scientific survey, of course). Middle class people - people in my income bracket, who will get the full $600 - are saying they'd either use it to pay down a credit card debt, pay taxes they owe (mostly real estate), or save it for "hard times". I know that's what I'm going to do. Hardly activities that will jump-start the economy.
And from what I read in columns by economic experts, the tax break that will let companies take immediate deductions for machinery they buy won't make much difference, because if a company needs a machine they are going to buy it anyway. What would make more sense, imo, is to give companies a tax break for each new job they create that lasts at least a year - new job, not one created by laying someone else off. So many big businesses all over the country are laying people off, starting with all those mortgage companies that made the sub-prime mortgage loans and the investment firms that bought the loan packages and sold them to investors (like pension funds), but also Sprint, Yahoo, and a whole lot more. Sears is in trouble (after buying K-Mart a few years ago), and most of the airlines are in trouble. Of course housing construction firms are in big trouble, as are real estate companies with large developments of houses they can't sell.
Some finance pundits say that the feds should start giving aid to states and municipalities. I watched 60 Minutes last night, and there are communities in California where 15-25% of the houses are or will shortly be in foreclosure. Which means no real estate taxes to pay for municipal services. A lot of communities are getting hurt by that problem.
Ginny in Fridays paper there were 35 home foreclosures in the town I live in. That was just one days paper and they run the foreclosures every day. The people that can afford to relocate themselves are just leaving their houses and getting out of town. Those that can't seem to be moving in with family and leaving their houses. Three of my girls' friends have moved into houses with other family members.
A couple from our church, moved into a huge old house, they have her sister and brother in law, both of their daughters, one of their son in laws and four grandchildren staying at their house. They are combining incomes to make it through the lay offs and hours cut due to the current state of economy in our town.
Crystal,
I think your calculations is correct also, i'm in the same boat as you, but back in 2003 when they issued the rebates, I received a larger rebate then I expect to this time. But on another note, when I filed taxes in 2004, I have to file that rebate that i received and it lowered my refund significally. So I'm not sure if I want a rebate this time. I'm not sure if I want a rebate this time, but not sure/dont' think I have a choice in the matter.
You are right, Dandjmom. I remember that from the last time. I would not be surprised if the same rules apply for this "rebate". They are calling it a rebate, not a gift.
Well, the Senate has come up with its own plan - maybe. Senator Baucus of Montana proposes extending unemployment comp for 13 weeks; 26 weeks in states with unemployment of 6% or higher, cutting the rebate to $500 (with $300 per child) and including senior citizens living primarily on SS and not paying taxes. His proposal would also remove caps - that is, no matter your income, you'd get the rebate.
Sounds good, I'm all for extending the unemployment comp.
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