Saturday, January 19, 2008

Tax rebate coming?

Maybe it's just me, but I feel the idea of a $500 tax rebate is nuts.  Don't get me wrong, I'll take my rebate check with a smile, thank you very much.  But the idea that it will give the economy much of a boost is ridiculous.

Most people I know will just use it to pay the rent that's a month behind as a result of all their money is going in the gas tank.  I suppose the rebate might help somebody keep their home from foreclosure for that much longer.  But once the money is gone, the economy is right back where it started.

The people who aren't hurting from the money crunch (are there any of those?) will perhaps tuck the money away for vacation-time.   Those who are feeling the squeeze will buy groceries and gas.  How long is that little "boost" to the economy going to last?  How much difference can it make?

Just my two cents worth.

I'm editing in one of my comments on this entry, as it's very enlightening, at least to me:

Comment from pudge450 |
I think the idea of stimulating the economy with this tax rebate is more profound than it appears on the surface.  Once a dollar enters the economy, it statistically "turns over" 5 times ( with a bit of deminished value with each turnover).  Net effect of one dollar is about $1.66 in the end.   So, if you and your husband receive the proposed rebate of $1600 for a married couple, your net effect on the economy is about $2656.00 in the end.  Multiply that times the billions of dollars and it is a larger effect than expected.  Even if someone pays his past due rent, the money has been put into play.  And don't forget, some of that goes back to state and local governments as sales tax.  But, of course -- some people will put it in the bank,  and then...... well  little effect."

12 comments:

deshelestraci said...

You said it perfectly!  My husband realized that if he got rid of his gas guzzling van he would have enough for the car payment on a new car with the gas money he would be saving.  Not saying we will do that but it's an option.
Traci
http://journals.aol.com/deshelestraci/MylifeasatransplantedYankee/

magran42 said...

I agree...I can't see where it will help at all....but then I don't know what will.

pudge450 said...

I think the idea of stimulating the economy with this tax rebate is more profound than it appears on the surface.  Once a dollar enters the economy, it statistically "turns over" 5 times ( with a bit of deminished value with each turnover).  Net effect of one dollar is about $1.66 in the end.   So, if you and your husband receive the proposed rebate of $1600 for a married couple, your net effect on the economy is about $2656.00 in the end.  Multiply that times the billions of dollars and it is a larger effect than expected.  Even if someone pays his past due rent, the money has been put into play.  And don't forget, some of that goes back to state and local governments as sales tax.  But, of course -- some people will put it in the bank,  and then...... well  little effect.

suzypwr said...

Hey! Maybe I can go to Las Vegas in February after all and do my patriotic duty. Unfortunately, I don't gamble so it won't get spent that way!

xoxo

lanurseprn said...

I agree with you!! $500 isn't going to make much of a dent.
Pam

msecz said...

I think it would be better to figure out how to lower the price of gas....:>(
Sandra

geocachelinda66 said...

I'll be glad to get mine!

ora4uk said...

Mosie...hubby and I were having this same conversation last night....we will take the rebate...happily...but it isn't going to do any good....like trying to stop a flood with a small sponge...LOL...and sorry about Cliff's aunt...but so happy he had some memory time with her....Hugs...Ora

breakaway1968 said...

Yes I agree with you...and I know that comment from Pudge450 looks/sounds good and we want to believe that but I don't believe that is a fact.   I think your closer to hitting the nail on the head.  It's not going to effect us that much at all.  

mutualaide said...

I keep waffling on this.  I feel like I'd love to have the money back to be able to use ... however.  Then I think, well, yeah, but next year they'll want the money back.  But I do believe that the rebate does have the profound effect on the economy because of the vast numbers of rebates.

helmswondermom said...

I don't know whether it will help or do nothing, but I guess I'll find a use for it if we get it.  I hope that it does create a ripple effect, though.
Lori

fowfies said...

We always get back a good chunk of change, but it has always gone to things we have been wanting or needing. Last year was the fence. This year the house needs to be painted. Some we will keep back for a rainy day so to speak.