You know, so long as the Republicans and Democrats in congress are fighting each other, nothing gets done. And that's not always a bad thing. But when they AGREE, watch your wallet. Such is the case with the new "stimulus" package signed by President Bush this week. For those who haven't been paying attention, the government will send a "tax rebate" check to all Americans who make less than $75,000 a year ($150,000 for couples). The idea is that we'll spend that money and stimulate the US economy out of its current slowdown.
A couple of quick points. First, these "rebates" aren't necessarily just refunding the tax you paid. Some people (my middle-class family included) will get "back" more money than they paid in. Indeed, some people who never paid ANY taxes will get rebates. Secondly, it's not like the government has a big old pot of extra money floating out in the stratosphere. That money is all collected in taxes... the vast majority of which, by the way, are paid by the people in the upper income brackets. (The last figures I saw showed that about 96% of the taxes collected in this country are paid by the top half of wage earners. Over 35% of collections came from the top 1% of earners.) So, even assuming the "stimulus" works, it's not really a tax rebate. It's taking money out of the pockets of those who earned it, and giving it directly to those who don't. It's a welfare program disguised as a tax rebate. Don't get me wrong, I would object to this on fairness grounds if it were properly named. But I'm doubly offended by the dishonesty.
And whether this is a "good" stimulus plan is doubtful, at best. $600 a pop in a 13 trillion dollar economy is not that much. And lots of folks will use this money to save, or pay down debt, rather than rushing off to spend it at a retail establishment. (I'm thinking theme park, on my end.) Of course, money invested, saved, or paid against indebtedness will eventually filter through the economy as banks and others use that money for good purposes--home loans, infrastructure, new jobs... but the money could have done that if it had been LEFT in the economy in the first place through lower taxes. The argument is that it's more likely to be spent now that it's in the hands of "the needy" who spend most of what they have, rather than in the hands of the evil "rich," who are more likely to save or invest it. Sorry, once again I have a problem with this little enterprise, which in the private sector is called THEFT.
Don't get me wrong--I'm not sending "my" check back. Disney, here we come*. But I do feel at least a little funny knowing that our vacation for my home-owning, middle-class, two-income family is being subsidized by my fellow taxpayers. I just have two questions. First, under pay-as-you-go, zero-based budgeting rules, shouldn't we RAISE TAXES even more on the "rich"to pay for the costs of this tax rebate? And also, why only $600? If this is fair, why can't we make it $6000? Or $60,000? Where I come from, stealing is still stealing. If we're going to commit petty larceny, let's go for the whole enchilada!
*Note to Pete: Yes, I know I should use this "found" money to work my way up Dave Ramsey's "baby steps" on my path to financial independence. And I know that if later I want to live like no one else, right now I ought to live like no one else. But I'm nothing if not a good citizen, and right now Uncle Sam wants me to live like everybody else. So I'm blowing it!