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THE JOURNAL OF STEFFANIE RIVERS: Who’s In Charge Here?
*When it comes to solving the worsening financial state of America, I’m convinced most of our political leaders are using fuzzy math. How else could they compute that passing out $600 tax rebate checks to 116 million Americans will solve this country’s economic crisis? It’s a prime example of feeding the masses for a day, instead of teaching them to fish for a lifetime. Then again you can’t teach what you don’t know.
No matter how you slice it there’s only so many pieces of the financial pie. And if everyday Americans are forced to spend more money on fuel, food, health and childcare - with the same amount of income that wasn’t enough in the first place - soon there won’t be any more money to go around. It’s simple math.
In case you haven’t heard about the proposed tax rebate let me break it down for you: If it’s approved by Congress, tax-paying Americans will get a rebate check from the federal government. Taxpayers who file individually will receive $600 while couples who file jointly will get $1,200. Retirees, who don’t pay federal income taxes, but pay social security taxes, would get $300 for individuals or $600 for couples. For every child claimed that person would receive extra $300. Only individuals who earn up to $75,000 or couples who earn up to $150,000 qualify for the rebate. Other sections of the proposed stimulus package will set aside money to help homeowners facing mortgage foreclosures, increase the amount of food stamps issued and extend unemployment checks.
What they don’t tell you is any amount of money taxpayers receive in a rebate check now will be deducted from future refund checks later. So they’re not doing you any favors. They’re taking from Peter to pay Paul and later they’ll take from Paul to pay Peter. This whole scenario confirms they have no idea what they’re doing.
Also, I can’t pass up the opportunity to tell you that any refund check you receive indicates that you have overpaid your income taxes throughout the year and in essence have given the federal government an interest free loan.
Even in the worst economic times, though, there are people who will get rich and people who will remain poor. The first step is to keep the money you already make by legally reducing your tax liability. Consult an accountant about the schedule c tax form or go to irs.gov to read it for yourself.
Even if congress approves the tax rebate check don’t get too excited. Remember it was already yours to begin with.
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