Has anyone else caught this detail on the tax rebate program?

[semillama]

sorry if this is a dupe:

My wife just pointed out to me that the rebate checks are actually "advance checks" on next year's refunds. So you're basically getting next year's refund early. The article I read didn't go into what happens if you owe taxes or the rebate you receive this year is more than next year's refund - would you end up having to pay back the rebate?

the link: http://www.cnn.com/2008/POLITICS/02/08/economic.stimulus/index.html

I was actually planning on using my rebate check to pay for a trip in May, but now it's going in the saving account instead.

[midnight]

1. Your wife is very smart. Thank her for me for pointing that out.

[mrbluto]

25. This lets this administration tax the next and spend it now.

As if they haven't done that in a hundred plus other ways already.

[bryant69]

2. That's the way it worked last time

Made for a depressing spring time.

Bryant
Check it out --> http://politicalcomment.blogspot.com

[hfojvt]

49. no it is not

That story got started, but it was a load of crap. It was a load of crap last time and it is a load of crap this time. CCN has corrected their article.

[newportdadde]

56. Your wrong in 2001 it WAS an advance.

http://archives.cnn.com/2001/ALLPOLITICS/06/07/tax.primer/index.html

"The Treasury Department points out that this is not officially a "rebate" ... it's an "advance payment" to taxpayers of money they would have gotten back from the government as a rebate when they filed their tax returns next April (for 2001)."

I watched a 500 refund change into a 100 owed amount after I accounted for the "rebate" check. It was an advance.

Now this one may or may not be an advance... no concrete details yet. Imagine if it was an advance though the incoming Democratic president in 2009 would look like the 'raised taxes'.

Most important thing on this bill is that Fanny Mae can now cover houses up to 750k I believe instead of just 430k or so.

[Cosmocat]

61. I remember wanting to put a chair ...

over the head of the guy doing my taxes when he deducted that $300 from my return the next year ... I hated it to begin with, cause it was cheap pandering nonsense throwing money at the sheeple ...

But, I said, christ, it was a freakin advance !!! And the tax guy just refused to let me call it for what it was ... I was like, you're freakin TAKING IT FROM MY RETURN !!!

[hfojvt]

62. no, it was an advance tax cut

it was not an advance in the sense that it had to be paid back. Nobody had to pay more taxes because of that rebate. Your 500 refund did not change into 100 owed. That is simply hogwash or there was something else going on. The media played it like "you will just have to pay that back at tax time next year" and that was complete and total bullshit.

[bryant69]

64. I remember it pretty damn clearly

My refund shrunk by the amount I had been rebated earlier in the year.

And, if it's all the same to you, I will believe my lying eyes over random internet person.

Bryant

[hfojvt]

69. you remember it wrong, the math is what is true

not the random internet person. Also "refund amount" is not the same thing as "taxes owed". Refund amount is equal to taxes withheld minus taxes owed. Taxes owed simply did not go up because of those rebate checks. That was a media myth that I tried to debunk at the time. I do remember reading a story with that claim in the Des Moines Register, and it is evident from the internets that lots of people still believe it, but it never was true. The Bush tax cuts created a 10% tax bracket on the first $6,000 of taxable income where the tax rate used to be 15%. That saved most taxpayers $300 which was mailed early. People got the $300 (or $600 for couples) in May 2001 instead of February - May of 2002. It never had to be paid back.

Now. It IS possible that Bush's IRS changed the withholding formula so that less taxes were withheld from your paycheck, but there is certainly no advantage for them to do so. In fact, in my financial calculus a smaller refund is better than a bigger refund. I'd rather mail a check for $200 every April 15th than get a check for $300 sometime in February. I hope you don't think that's crazy.

[Book Lover]

81. That's not how my H&R Block guy did it on my 1040 (nm)

[hfojvt]

84. What's not how your H&R Block guy did it?

Look, I have right next to me the instructions for form 1040 in 2001. I look at the form and there is no extra line for "repayment of rebate check". In fact, it says on page 14 "Any amount you received as an advance payment of your 2001 taxes is not taxable and should not be reported on your return." I look at the tax rate tables and they are unchanged.

Maybe your tax guy was duped by the media story. It's hard to believe a professional would be so duped, but not impossible. Maybe they had orders from the corporation to spread that anti-tax message. "Yeah, now you've gotta pay back that rebate."

Here's how the media story went. The tax rate on the first $27,050 of taxable income was 15%. The Bush tax cuts created a 10% bracket for the first $6,000, meaning you pay $600 on that income instead of $900. Then some people noticed that doing their taxes "Look, we are still paying $900 on that first $6,000, so we are paying the rebate right back."

No, some people are either purposely obtuse, or simply do not understand net tax. What is your tax without the rebate check? $600, right? What is it with the rebate check? It's still $600. It's the sum of -$300 received in May 2001 plus $900 paid in February 2002. Voila! $600 = $600. There's no paying back of the rebate checks whatsoever.Z+*

[NC_Nurse]

3. This program is such a complete waste.

I can't believe they think they're going to stop a recession this way.
What a crock. :eyes:

More smoke and mirrors from people who are out of ideas. Geez.

[Bill McBlueState]

4. odd quote

Mitch McConnell says, "There were no winners or losers in this except the American people..."

Well, are we winners or losers?

Seriously, this annoys the crap out of me. Since it's a mandatory advance on next year's refund, it seems like more of a way to screw up everyone's personal finances than a way to actually help anyone.

[electron_blue]

8. It just moves money from next year to this year.

and we are encouraged to spend it!

Bottom line: We are not spending enough of our money in 2008. We need to spend some of 2009's money.

[gateley]

20. I heard Nancy Pelosi say they wanted to get it into the hands of people who

would go out and spend it right away.

I'm with those who think this program is without merit and possibly harmful in the long run.

[Angela Shelley]

54. Losers

[liberal N proud]

5. That is the part that no one is going to tell you...

The congress isn't going to tell you
The idiot in chief isn't going to tell you
The media isn't going to tell you

They don't think anyone will notice and when they do, next spring, too late.

[electron_blue]

6. She's right.

You're smart to put it away.

I wonder what happens to people who will owe next year?

[RebelOne]

9. I never receive a refund. I owe every year,

so this rebate will be going into my savings account.

[electron_blue]

11. So will you owe this rebate back next April?

[Rydz777]

34. That's a very good question. The only safe thing to do is to

save the rebate. In any case, spending it only stimulates the Chinese economy.

[RebelOne]

43. I probably will have to pay it back.

That's why I'm putting it in savings. At least, I'll earn a little interest before I have to give it back.

[Angela Shelley]

55. Good Idea, give the banks a breather.

[LibertyLover]

14. Just what happened to us with the last tax rebate -

we pay some more based on how much the rebate check was. The minute Bush started talking "rebate", I knew how it would be handled and have already told my husband that he can forget about using whatever rebate check comes to us to buy more model train crap or a HD television.

[ixion]

7. the government only gives handouts to the corporations and the wealthy

the rest of us get the shaft, as usual.

[havocmom]

36. And handouts to corporations is EXACTLY what this 'rebate' is!

They 'give' working people money (which is really a payday loan against your POSSIBLE refund on 08 taxes with your 09 tax return) knowing the working class needs to buy things NOW. Where does that money go? TO THE CORPORATIONS

And next April, workers get to pay for what they bought AGAIN!

Since the big tax cuts to the economic top tier DID NOT trickle down and give the economy a shot in the arm, it seems logical to get rid of those top tier tax cuts, increase the wages workers get (and pay payroll taxes on) and people will be able to spend on food, fuel and house payments instead of having to choose between the three. People might even be able to save a little again!

Workers with money all year keep it circulating. The ultra rich with more money just sit on it and piss on us. THAT is a basic truth of trickle down economics.

We all do better when we ALL do better.

This payday loan marketed as a rebate is just more corporate welfare paid for by workers shouldering even more of the national debt.

[lligrd]

10. They Think It Will Stimulate The Economy If We Borrow

against Taxes we owe next year? I'm going to mail mine right back to them.

[CountAllVotes]

12. kick!

<snip>The checks are an advance on next year's refunds, and most, if not all of the money, will be deducted from taxpayers' refunds in 12 months' time.

[Frosty1]

77. I copied this quote

"The checks are an advance on next year's refunds, and most, if not all of the money, will be deducted from taxpayers' refunds in 12 months' time."

From that article this morning. Cnn changed the article.

http://digg.com/business_finance/Is_it_rebate_or_just_a...
The article sure did say this when I submitted the story. Word by word "The checks are an advance on next year's refunds, and most, if not all of the money, will be deducted from taxpayers' refunds in 12 months' time." Now CNN has removed it. Is there some source to confirm it one way or other?

Kinda hard to confirm it now that it's gone. I saw it before they edited it. CNN did remove that paragraph from the news article.

[MrCoffee]

13. Look into short-term CD's or Treasury Notes

you might get a better interest rate than just your savings account.

[sandyj999]

15. Won't it be considered as money earned?

So next year it will have to be shown as income and be taxed as such? I'm able to bank it and that's where it will go so I can give it back next year. What a guy!

[MiniMe]

35. No, if it is a tax rebate, it is not taxable income

Basically, what they are doing is fixing the tax tables so you never paid that tax the first time. Say you had $1,000 withheld for 2008 taxes, if you get $600 back the tax tables will look like you only had $400 withheld. So it is not taxable income, it just affects what you have already paid into 2008 taxes.

Poppy B did a similar thing. He said that everybody would get more money in their paycheck when he was President, and they did. How did he do it? He played with the tax tables so you got more money in each paycheck because less was withheld. You still had to pay the same amount at the end of the year, but you did see more in your paycheck each pay. How these guys get away with the smoke and mirrors like they do is beyond me.

[AndyA]

16. It's all just a scam. That's exactly what Bush did last time.

Just advanced you the money from next year's refund, and then you worry about paying it back later.

I'd really just like to write "NO SALE" on mine and send it back.

[lonestarnot]

31. Yes it appears to be another scam. Going to save it until the day before deadline on cashing

then cashing it and putting it in a sock.

[Zing Zing Zingbah]

80. Yeah... Bush pulled this same scam with the child tax credit

back at the beginning of his presidency. That messed us up the next year when we went to do our taxes because we had totally forgotten about that money and we tried to claim the child tax credit. We wound up having to pay a small fine because we did our taxes incorrectly and under paid because of this. So the government actually got more money out us.

[flamin lib]

17. *Sigh* Not true. This is a one-time genuine rebate on past taxes

not the prebate we got in '02.

The Democratic leadership waived the PayGo provision that requires all expenditures be offset with cuts or tax increases.

Bernake insisted that it be like this because any stimulation from cash inserted into the consumer economy would be offset by the cash taken out of it later.

One more time, it is NOT a prebate on next year's taxes.

[mikeytherat]

18. This is straight from CNN's article (linked in the OP and below)

The package, which passed the Senate 81-16, will send rebate checks to 130 million Americans in amounts of $300 to $600 for people who have an income between $3,000 and $75,000, plus $300 per child. Couples earning up to $150,000 would get $1,200.

The checks are an advance on next year's refunds, and most, if not all of the money, will be deducted from taxpayers' refunds in 12 months' time.

"My team will be sitting down with the IRS tomorrow, and the IRS, right in the middle of tax filing season ... will be working to get checks out," said Paulson, who helped broker the deal.

Paulson said the process of sending the checks would be completed by the end of summer.

http://www.cnn.com/2008/POLITICS/02/08/economic.stimulus/index.html

mikey_the_rat

[MrCoffee]

24. CNN's the only one saying that...

AP, Reuters, WaPo, NYT...no one else is reporting that the rebates have to be paid back.


Interesting. Very interesting.

[mikeytherat]

27. Yep, someone is lying.

Considering CNN's article was part of an interview with our Treasury Secretary, I would think they got this info straight from the horse's ass, er, mouth. But, who really knows?

mikey_the_rat

[Liberal In Texas]

33. I've been trying to find another source to corroborate CNN and can't find anything.

It's possible this CNN article is wrong.

[MrCoffee]

37. Or that most news outlets are conveniently ignoring that particular detail

This is bipartisanship, baby! This is cash in hand! What could possibly go wrong?

[Liberal In Texas]

45. I hardly think all the news organizations have colluded to keep this fact hidden.

It's more likely CNN is wrong.

[hfojvt]

48. they are not saying it any more, it was updated 11 minutes ago

So I found it kinda funny that the linked article did not back up the OP.

[OmmmSweetOmmm]

88. lol! That's why I couldn't find it! eom

[TahitiNut]

46. That paragraph (the one bolded) has been removed from the story in the last 10-15 minutes.

CNN has apparently misreported or - if it's true - farted in church by telling folks.

[durablend]

51. They definitely changed the article

Check the Google News page here:

http://news.google.com/news?sourceid=groowe&ie=UTF-8&q=rebate+advance&scoring=n

Look for the third story's preview:

"The checks are an advance on next year's refunds, and most, if not all of the money, will be deducted from taxpayers' refunds in 12 months' time. ..."

Somebody spilled the beans on the real intention (makr King Georgie look wonderful, while saddling the next president with a hidden tax increase)

[Contrary1]

57. That part has been DELETED from the original article!

[windbreeze]

82. YES it most certainly was deleted....

I read the thing with my own eyes...then bookmarked it...when I went back to read it again, that paragraph had disappeared...and it's placement in the article, was just before the paragraph that states my team will be sitting down with the...blah blah tomorrow, etc.. So someone must have been getting flack over it already....wb

[Telly Savalas]

86. It doesn't say that anymore.

[sinkingfeeling]

38. No, it's a credit against next year's taxes. Need someone with legal training, but here's the bill

`SEC. 6428. 2008 RECOVERY REBATES FOR INDIVIDUALS.

`(a) In General- In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2008 an amount equal to the lesser of--

`(1) net income tax liability, or

`(2) $600 ($1,200 in the case of a joint return).


http://thomas.loc.gov/cgi-bin/query/F?c110:5:./temp/~c110aLp8c4:e1754:

[Liberal In Texas]

44. I think CNN is dead wrong. The writer(s) got confused with this provision

that will allow you to reduce your 2008 liability if you wish.

"The plan speaks in terms of the payments being a credit on the 2008
tax return, and checks will be sent out based on 2007 tax return data"

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/02-08-2008/0004752397&EDATE=

[sinkingfeeling]

19. So,if I were getting one, which I'm not, I'd stick it in a CD so that I could pay it back next year.

[mikeytherat]

21. That's exactly what we're doing (just like last time).

Something earning maybe 5-6%.

mikey_the_rat

[Wcross]

22. Why should Bush care? People won't know it until Obama is in office!

He is going to get all the "glory" of "giving" people the money & by the time people find out it was an advance Bush will be long gone.

[madmom]

23. You all miss the point, see next year will be 2009 and there will be a dem

in the white house and when people start paying more taxes because of this it will be the dems fault.

"Second verse same as the first!"

[MrCoffee]

26. Shhhh! We're not supposed to talk about that...or about the huge tax cuts (not rebates) for corps.

There there, you'll feel much better with a new TV. TV will make everything OK. Shhhh...It's all going to be over soon. Look, there's a new reality show on TV! Won't that be fun?

[IronLionZion]

30. Are any TVs still made in America?

If people bought American-made products it would still boost our economy. But most Americans will likely spend it at Wal-Mart, therefore boosting China's economy.

[kath]

78. Yep -- hell has frozen over, because Huckabee said something that you and I would agree with:

http://www.ontheissues.org/2008/Mike_Huckabee_Budget_+_Economy.htm

“One of the concerns that I have is that we’ll probably end up borrowing this $150 billion from the Chinese,” he said. “And when we get those rebate checks, most people are going to go out and buy stuff that’s been imported from China. I have to wonder whose economy is going to be stimulated the most by the package. “

[iris5426]

32. ...

:cry: :rofl:

All at the same time.

Its so true, and so wrong.

[nels25]

47. Look we all know that

taxes will go up in a Democratic lead administration they have to in order to get the fiscal house in order. That should come as no surprise to anybody.

And just as sure as the sun also rises the GOP sill scream tax and spend liberals.

This is to be expected and should be prepared for.

However I see that there are some forward thinkers out there (Charlie Rangel comes immediately to mind) who have ideas worth pursuing.

The GOP screaming tax and spend will not get it done this fall.

Depending on how local and state governments tackle the issue will tell how well the issue cuts in 2010 and 2012.

I believe that the issue can be handled with intelligence.

We Shall see.:dem:

[flamingpie2500]

28. And what about the amounts? Didn't this start out at something like $1200 or

something like that? I am so disillusioned right now with this whole thing it makes me ill. How much did this COST us to put this together and then print? More damned debt.

[IronLionZion]

29. What saddens me even more is that Americans will spend it on Chinese-made Wal-mart goods.

If you use it for housing or food or whatever American stuff you need/want then each dollar spent should increase the GDP by at least $7. But if it foreign-made stuff then it doesn't help.

I'm certainly NOT going to go out and buy a TV. I don't own a TV (I can watch on the computer). But that money is going into my savings account, out of which will go rent and food and other living expenses.

I'm doubtful about the economic theory behind this plan. It sounds like politicians from both parties are just trying to please the voters since it is an election year.

[alarimer]

39. Wow. the rebate check is more than my refund this year.

I assume next year's refund would be about the same so that I means I will owe over $100 if this is true. Why the hell do they do this bait and switch? Scum.

[SoCalDem]

42. Walmart sales could use a boost.. that's why n/t

[orleans]

40. yes. that is what they did the last time. the irs had to send millions

of letters out to people who had filed their taxes, explaining that they had made an adjustment due to the advance they had received months before.

[SoCalDem]

41. Yup.. we said it last time, and when they dragged this ole trick out again..

Of course, last time it was to get votes...this time it's to show people how "generous" Bush is, and when it has to be paid back/deducted from the eventual refund in '09. it will be spun against a democratic president, as .....a TAX INCREASE..

[Javaman]

50. Like I have been saying, invest it in euros. this way you will at least have

some interest on it when you have to give it back.

yet another way to screw the Democrats when the take over.

[librechik]

52. Duh. Yet people still doubt. I guess they think the tooth fairy is giving them the money.

:shrug:

[Liberal In Texas]

53. HEY EVERBODY! PAY ATTENTION! THE STORY IS NOT TRUE!

Look at the discussion starting at post #17.

[sinkingfeeling]

58. Read the bill in post #38.

[Liberal In Texas]

60. I did. And your link is no good.

Did you read #44, a reply to #38?

[sinkingfeeling]

68. Worked for me, but here's another link to the version passed 2/7.

http://thomas.loc.gov/cgi-bin/query/F?c110:5:./temp/~c110C2vQMi:e681:

[StarryNite]

59. It is just an advance...

on next year's refunds. I heard Senator Jon Kyle (Yuk!) talking about it on the radio last week. He said it's an advance. Surprisingly, he didn't think it was a good idea. This is one of the reasons he is against it and he, for once, makes sense. From Kyle's website;

While it is always encouraging to see the President and Congress are working together with the goal of strengthening our economy, I am leery of the temptation to “do something,” without really understanding the effect. The cost, after all, is $150 billion added to the deficit; and the $150 billion has to eventually come from the taxpayers. So, this could end up being very bad policy, especially if it adds significantly to the deficit and fails to appreciably help the economy.

http://www.nationalledger.com/artman/publish/article_272618527.shtml

[Liberal In Texas]

63. It's not an advance. The link to the article has nothing in it about an advance. n/t

[StarryNite]

65. Well Senator Kyle would disagree

with you. He specifically said it was an advance. Yeah, I know, he is a total AH but that doesn't mean he was wrong this time. I don't see where it says it isn't an advance. Do you know if it specified the last time that it was an advance?

[Liberal In Texas]

66. Where does Kyl say it's an advance? Not in the article

you linked to. If you had read the article you might have see that, and how Kyl spells his name.

It's also not a bus or a pink elephant. Why does there have to be something that says what it's NOT?

[StarryNite]

67. He was doing an interview

on a local radio station when he was asked about it and he said it was an advance. He is one of my state Senators, god I hate saying that. I can't stand him, but anyway, that's what he said. His website does not say it is or isn't an advance. I was just wondering what the terminology was the last time when it did indeed turn out to be an advance. Was it specified the last time that it was? I really don't know. I just don't trust them. I know we had to pay the whole darn thing back.

[Liberal In Texas]

70. I respectfully suggest that you could have misunderstood or

remembered incorrectly. Or the SOB might have been totally out in right field not knowing what he was talking about. The latter is more probable.

[StarryNite]

71. Yeah, I definitely heard him

right. I even wrote it down to tell my husband and kids. I had been trying previously to that to find out if it was the same deal as before. So when they started talking about it on the radio I was all ears. But you could be right about SOB Kyle not knowing what he was talking about. It wouldn't be the first time. However, I do agree with him about how it doesn't make sense for us to borrow from China in order to hand out these 'rebates' just so people could take the money to Wally World and buy Chinese crap. Then the US has to pay China back with interest to boot. It's a win win situation for China that I suspect won't do us much good whether it turns out to be an advance or a 'gift". And Kyle did specifically mention that people would spend the money at Wal-Mart and other big box stores that sell Chinese goods. I was paying very close attention to the interview and was surprised to hear him say he thought it was a bad idea.

[StarryNite]

72. I just sent Kyle an

email asking him if the tax rebate is an advance or a gift. If I get a reply I will post it here for you regardless of what it says. :) I'm not holding my breath.

[Liberal In Texas]

73. OK. I'll check back later to see if you got anything. n/t

[noamnety]

87. When they linked it, it was there. CNN edited the article.

http://newsbusters.org/blogs/noel-sheppard/2008/02/08/cnn-deletes-line-about-tax-rebates-being-advance

Either their information was incorrect, or they were told that's not information that the general public is allowed to hear.

[radfringe]

74. a twist on the bait and switch scheme

make sure everyone you know is aware of it....

[Contrary1]

75. Maybe someone can explain this bit of government double-speak to me?

:crazy:

Rebate checks

"Most taxpayers will receive this credit in the form of a check issued by the Department of
the Treasury.2 The amount of the payment will be computed in the same manner as the credit,
except that it will be done on the basis of tax returns filed for 2007 (instead of 2008). It is
anticipated that the Department of the Treasury will make every effort to issue all payments as
rapidly as possible to taxpayers who timely filed their 2007 tax returns. (Taxpayers who file late
or pursuant to extensions will receive their payments later.)
Taxpayers will reconcile the amount of the credit with the payment they receive in the
following manner. They would complete a worksheet calculating the amount of the credit based
on their 2008 tax return. They would then subtract from the credit the amount of the payment
they received. For many taxpayers, these two amounts would be the same. If, however, the
result is a positive number (because, for example, the taxpayer paid no tax in 2007 but is paying
tax in 2008), the taxpayer may claim that amount as a credit against 2008 tax liability. If,
however, the result is negative (because, for example, the taxpayer paid tax in 2007 but owes no
tax for 2008), the taxpayer is not required to repay that amount to the Treasury. Otherwise, the
checks have no effect on tax returns filed in 2009; the amount is not includible in gross income
and it does not otherwise reduce the amount of withholding..."

http://www.house.gov/jct/x-8-08.pdf

[E-Z-B]

79. Wow, I don't know.

Does anyone know what this means?

[E-Z-B]

90. Anyone understand this? There must be someone here...

[screembloodymurder]

76. Well I won't have any rebate next year.

But I do promise to send it back just as soon as I get one. Here's the deal, when I get the money in my SS account I'll give them a IOU for the rebate. Fair's fair.

[trashcanistanista]

83. This tells me it is an early

disbursement of what you would have gotten back after filing in 2008. It is your own money in a sense and if you don't get a rebate normally you would not have to pay it back. If you are expecting for example to get back $1,000 in 2009 you would only get $400 if you got a $600 rebate in 2008. That's how it reads to me.

[and-justice-for-all]

85. Im just using mine to pay a car payment...nt

[OmmmSweetOmmm]

89. PLEASE READ THE ARTICLE. CNN TOOK THAT PART OUT OF THEIR ARTICLE.

The OP had excellent intent, and CNN did write it, but they then deleted it. These are true rebates, no strings attached.