January 18th, 2008 at 10:35 am
The AP reports that President Bush and Democratic lawmakers are putting together an “emergency fiscal stimulus bill.” The White House is considering rebates up to $800 for singles and $1600 for married couples.
The government is participating in behavior that is dragging down the economy — increasing the deficit with this package — in the hopes that it is boosting the economy. The brake is beating the accelerator.
Is this a rebate on our 2008 taxes? If so, we would have to spend the money on our taxes in order to receive the money and spend it later. A pre-April 15 tax cut would leave the money in our hands and work faster.
Contrary to the desired wishes of Federal Reserve Chairman Ben Bernanke, if we qualify for this, we would likely use it to pay off previous spending, and I imagine a lot of people would be in that boat. If that’s the case, then the economy’s already overstimulated. The desired spending has already been done.
Second item: the Ohio Treasurer is considering a plan to leverage 12% of the state’s $600 million portfolio and link its assets to Ohio individual savings accounts, thus increasing the interest rate of the savings accounts.
I’m glad the Treasurer recognizes that we could use more savings. Instead of giving a person 3 cents on $100 where a person now earns 1 cent in a savings account, the state should reduce what it collects from its citizens and businesses. Ohio ranks fifth in highest tax burden per capita and 46th in favorable business tax climate, according to the Tax Foundation.
Savings accounts don’t pay well because the money is easy to transfer and withdraw. That means risk for banks. People can lock their money for higher returns into 401(k) and other savings plans if they can assure institutions that they will not need the money for a while.
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January 18th, 2008 at 10:52 am
But the “Bush Tax Cuts” are the best thing since sliced bread! It’s nuts to question tax cuts!
January 18th, 2008 at 11:47 am
Tax cuts work. It’s rampant out of control government spending that is harming the problem.
If he really wanted to improve the economy, he’d ask Congress to abolish the Federal Reserve, or at least appoint a new Chairman that understands that the answer to the economy is to sharply RAISE interest rates, not cut them more and more.
January 18th, 2008 at 4:44 pm
We first need to revamp our tax system. The IRS in of itself is one of the biggest tax burdens we have.
That being said…
The porposal noted here is not a tax cut, nor is it a tax rebate. It is a social welfare program.
This is not the same thing as a tax cut that allows people to keep their money (BEFORE TAXES). And then working to implement a balanced government budget.
This is taking money out of the tax base (AFTER TAXES) which is scheduled to be spent on something else, thereby increasing the existing tax problem and exacerbating existing budget shortfalls.
This is pure politics at it’s finest. Designed to elicit support in a short-term fuzzy way despite long-term problems it causes. And it makes my stomach churn.