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By now, most Americans know about the rebates the IRS will be sending to households across the nation starting in May. The rebates are part of a $168 billion effort to stimulate the economy through consumer spending. The government expects most recipients will go shopping with their rebates, ranging from $300 per individual to $1,200 per couple plus an additional $300 per dependent child.
Despite the widespread publicity and water-cooler conversations about the rebates, the IRS is sending letters to 130 million households explaining the rebate program. The letters also include information about qualifying for the rebates.
Some taxpayers have been upset by the expense ($42 million) for sending the advance letters. And $42 million certainly sounds like a lot of money to average taxpayers. But it amounts to 0.025 percent of the total $168 billion stimulus package.
The IRS contends the letters will offset much of the confusion about the plan. This means IRS employees will have to deal with fewer inquiries from puzzled taxpayers regarding the rebates.
Others, including some congressional Democrats, say the letters were unnecessary and the money could have gone for more urgent needs.
How the letters are viewed, however, is less important than how the rebates will affect the current sluggish economy. Consumers must pump the rebates into retail purchases in order for the economy to be stimulated.
It will be up to taxpayers to decide, after the rebates are mailed, if the advance letters were warranted. And that will depend in large measure on whether or not Americans see any economic improvement down the road.
Comments
I believe we could have created a good stimulus package by giving so much money to each State for infrastucture repair. This would had created good paying jobs and put thousands to work learning a good trade and most of all repairing a much needed infrastucture which is in dire need. Handing a check to everyone I don't think will help much. We needed to do what President Roosevelt did create jobs where you earn and learn while doing something good for your community and nation.
If this was such a good idea,why not give everyone a $100,000.00 check and the economy would have taken off,, or better yet send it to Wall Street,,, they know how to invest..
The economy has already been stimulated, consumers have been spending more money than they have. By far, the largest consumer is government, and it has been spending more than it can take from taxpayers. Try an old Republican belief, "Save yourself rich". Yes I know,this goes against all that we have been taught for the last several decades, starting with Roosevelt, and reinerated by Nixon who stated "we are all Keynesians now".
Swamp,
Part of the reason Roosevelt initiated the New Deal was because unemployment was so high. I think the unemployment rate for Missouri in January was 5.5%. That is still a relatively low figure.
Dumping the money to the states would do littel except have states dicker around as to how to utilize it. Dumping money into infrastucture would mean states would likely take much of their existing money budgeted for infrastructure and move it elsewhere. Thus creating few jobs and little change.