Reply #16: Can you point to this proposal of forwarding Stimulus checks that you are speaking of?

[FrenchieCat]

I don't seem to be able to find it.

I did hear that the Middle Tax Cut that Obama has been promising since he's been running
"May" to come in the form of Reduced payroll taxes, i.e., there will be no stimulus checks sent.

In addition, those who are self employed could reduce their Quarterly Payments for estimated taxes by whatever the tax cut amount would be, i.e., $500.00 for individuals ($1,000 for couples).

Those workers who normally earn too low of a figure to have income tax withholdings, would instead receive the tax cut via an increase in their paycheck that would be their portion of their increased EIC.

Further, I believe that Obama "may" be proposing that the employer simply withholds less payroll taxes from our checks each pay period.

The reason of choosing this method of providing tax cuts (as promised) to middle and low wage earners is that the amount one would benefit from is too small (not a lump sum) small to save, but large enough so that Americans would add the additional amount to their monthly budget, and plan accordingly. It actually represents a 50 Cent per hour take-home pay increase, and most of it should find itself back into the economy due to whom the tax cuts are aimed at.

A Stimulus would only be created IF the tax cuts are put back into the economy. The reason economist say that tax rebate checks don't work is because they are received in a larger lump sum large enough to save or invest. Also, because everyone reporting earned income got a Bush tax rebate, regardless of income, it resulted in a large portion of the Bush rebates going to those who didn't need it. Obama's tax cut plan is not aimed at anyone making over $200,000, and in fact, there is talk that this ceiling "May" be dropped to lower wage earning families than those earning $200,000 (Obama had mentioned $150,000).

I would add that Unemployment benefits "may" be extended for an additional 13 weeks, for those who do not have a job at all, and Unemployment benefits would not be taxable by the feds, period.....as they have been in the past.

Retirees "may" also benefit from the tax cut, by increasing the ceiling as to when SS benefit payments become taxable. Currently the ceiling is a senior has taxable income up to $25,000...which "may" be proposed to be increased to $50,000 instead.

I also believe that it "may" be proposed for seniors not to be forced to take money out of their 401K if the do not wish (due to the value dropping dramatically), but if they so choose to withdraw the money (because they need it), it will not be taxed up to the amount that would normally be "forced".

There are also Small business tax incentives that "may" be included...but I won't get into that, since it isn't what you are talking about.