Monday, March 10, 2008

The Stimulus Payment Letter

I can hardly wait for the payment to come. But I have no idea what I’m going to do with the money, but according to a letter I received, I bet many of us received, today in May I may be getting a check for up to 1200 dollars. That is based on my wife’s and my filing a joint return. If we had filed separately or were not married, the stimulus payment would be $600. We have no children living at home so we won’t be getting up to 300 for each of those.

According to the letter, the money will be a stimulus payment and does not mention that it may be a rebate. In fact the letter points out what we all already knew, one didn’t even have to pay any taxes to get a stimulus payment. It has been called a rebate in various news media, on several radio/TV talk shows, and political forums on the Internet. We now know it isn’t a rebate but rather a stimulus payment.

The stimulus payment for people who don’t pay income taxes will be made only to people who file a tax return and have at least three thousand dollars in earned income, Social Security benefits, and/or certain veterans’ payments. These people may receive a payment of $300 or $600 if filing jointly. The notice I received today also listed several situations in which no payment will be made.

Here’s a big kicker, those of you whose adjusted gross income is more than $75 thousand or $150 thousand for joint filers will get reduced payments or have them phased out entirely. Doesn’t that seem fair to the nation’s highest taxpayers, the ones most likely to stimulate the economy anyway?

The part of the letter you really want to read is the back page. I’m not really sure what it says. It tells us how to determine our stimulus payment. Don’t get too excited; after reading it you won’t have a clue. Well, actually you might now that I’ve warned you about it. It’s a sort of chart with three columns that tells you how much you will receive if your net income tax liability is more than zero dollars or zero dollars and your qualifying income is at least $3,000 or under $3,000.

That back page also tells you that if your qualifying income is under $3,000 what the gross income must be, $8,750 for single filer for example, in various categories to qualify for the stimulus payment.

I’ve said in the past here that this whole thing is a big sham, an election year ploy to make voters think they’re getting something from their government to help stimulate the economy. But the government is borrowing that money and it will have to be paid back. By whom, you ask? Guess!

It’s supposed to stimulate the economy as the recipients run out and buy new things, like a new HDTV, or household goods, or a host of other durable items. My guess is that most people, especially those in the $3,000 to $75,000 income range category will use the money to buy some groceries for their home, catch up on oil payments, fill the gas tank a couple of times. The stimulus payment isn’t coming until May so it’ll miss the April 15th deadline for making tax payments.

I haven’t decided what I’ll do with mine. I might just put it in savings for my kids when the ultimate happens. Or, more likely, I’ll put it toward my pre-pay oil for next year. I might come close to using it for what it’s intended and put it toward a new roof. In any event, not being an economist, it’s hard for me to fathom how a payment using borrowed money which will have to be paid back by the government using the tax money it takes from us will be a real stimulant.

But like many people, I’ll be anxiously waiting for it to come and will probably celebrate its arrival in May. Maybe I will stimulate the economy a little; there’s this little hamburger stand in Falmouth my wife and I just love. Or it could provide enough extra for us to be able to take a trip to Auburn where’s there’s another super hamburger stand.



Anonymous said...

Your readers should know that your comments re: the stimulus are especially valuable, reflecting well on the PHD in macro economics you received from UM.

Anonymous said...

I think we should all petition to recieve more money that way those us of who need taht money to buy groceries, pay bills, wash clothes and cummute to work can have a fair chance at helping the economy boost. Give us more money!!! Eventually they will raise taxes to get it back but at least some of us can get out of the struggle they have us in...

How can we petition for more?