Tuesday, February 12, 2008

The tax rebate that wasn’t or where is my stimulus check?

I just read through CNN's article on the rebates. Or whatever they are supposed to be called -prebates, bonuses, stimulus checks, etc. It's amazing that the media can not read through this legislation and make an accurate report. Some of the media are reporting that these are prebates meaning that they are an advance and that the money will be taken out of your taxes next year. Huh? Note to the media: It's your job to get the facts straight beforehand.

Anyway, after reviewing the "qualifications" to my surprise (sarcasm) I do not qualify for any rebate. Zippo. Gee I paid taxes, a lot of taxes, more taxes than any of my peers at work. In fact, I paid more taxes than I spent on expenses last year. Frugality might as well be a four letter word. Is this the part where I am supposed to be grateful for social capital?

That is my tax money that is being redistributed. I work just as hard as any body else, but the government has decided that I have earned more than my fair share. I think it's even more silly that some are saying that this rebate is effectively eliminating the first tax bracket. Hello?? I pay marginal taxes just like everyone else, so yes, I have money that is in that first 10% tax bracket, also. Please return it to me.

As long as people are getting the cash, they are ecstatic - no questions asked. Print those checks, who cares what it does to the value of the dollar. Just print more money. I know quite a few co-workers that are looking forward to their rebate gifts. They are just giddy about the new flat screens, Wiis and guitar heros that they can now run out and buy. I have none of those things.

Nothing like having your money frittered away on junk. And if you don't think that stuff is junk then tell me where your black & white TV set and your Atari Pong console are?

Let’s examine the bright side, there must be one. This rebate is supposed to stimulate the economy. If it does and business sales pick up, stock prices should also go up. Because I have invested in stocks, my “ship” should also rise with this economic tide, right? The difference is that I must earn it by making sound investments. It is not guaranteed and nobody is writing me a freebie check.

Really, the only solace that I find in this situation is that I know this will not continue. It’s all coming to a glorious end. It won't continue because I plan to leave my high paying job behind and it's tax burden. If I have no salary income, my taxes will be much less. I will still have income, but it will be from different sources that are not as heavily taxed. Kind of like the big shots, you know, like Ross Perot, for instance. He does not report squat for salary income and in turn his effective tax rate is less than 9%. The guy makes millions from his investments and pays a lower tax rate than a middle class worker.

This is not exactly a news flash, but in this country, the rich and the poor do not pay a proportionate tax, while the middle to upper class folks shoulder the tax burden for all. How long can that inequity continue?

Well, if they follow my lead it won’t be long at all because this middle class worker is fixin’ to check out and soon there will be that much less tax to be redistributed.


  1. Kristen - How exactly did you figure out that you do not qualify? I've tried to untangle the media mess on the news, and still have no idea if I will be getting some of my tax money back.

  2. The full rebate is given to those with AGI less than 75K single and less than 150k joint filers. Above that, the rebate is then reduced or phased out at 5% rate.

    600/0.05 = 12000

    So, for instance, a single filer making 12k over the limit, or 87,000 AGI would get no rebate. I used my 2006 AGI for my estimate, but the rebate will be based on 2007 Adjusted Gross Income.

    Hope that helps