Tax rebate - not really.

By now you've heard that the feds are going to be giving out a "tax rebate" as part of a poorly-conceived economic stimulus plan designed to jump-start the failing economy. Ignoring for a moment the stupidy of the rebate program generally, it turns out that it's not what the gov't and media have made it out to be.

Media reports all state that taxpayers will receive $600 rebates ($1,200 for couples who filed jointly) and $300 for people who didn't have any tax liability. Sounds pretty sweet, right?

Not so fast. First, in order to get your rebate you must file your 2007 tax return. So much for just sending a check. But that's not really such a big deal - you have to file your return anyway, so no big deal.

However, in order to get your rebate check, you have to either owe nothing or get a refund on your 2007 taxes. So, if you file single and end up owing $100, then your rebate check will be $500. If you owe $1,000, then you'll simply get a credit of $600 and still owe $400. And of course is you have an outstanding prior tax liability, it will be reduced by $600.

Now, there is an certain logic to the idea that the government should not hand out money to people who owe it money. However, the purported purpose of the plan is to stimulate the economy by giving people cash to inject into the pipeline - in other words, to go shopping. Not to give taxpayers a bonus, but to move products, increase spending and hopefully kick start the economy overall. It's a stupid idea and won't work, but if program's instigators truly believed in the goal, wouldn't they have made sure that the gov't kept its hands off the money in order to ensure a maximum economic bump? How does paying the IRS stimulate the economy?

There is nothing worse than a bad idea poorly executed. And while I would love to lay this on top of the stack of other poorly-executed bad ideas by Bush, this is truly a bi-partisian effort. Everybody is guilty. Worse, the media have utterly failed to investigate these details, and I assure you that you will not read or hear a news story about the IRS intercepting rebates until the checks start going out and people start bitching about not getting their's. Way to be on top of the news, guys.