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Thread: checking the fine print on the US 'tax rebate checks' ...

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    Default checking the fine print on the US 'tax rebate checks' ...

    this obviously hasn't been reported in US media ...

    (snip)"Dr. Tatyana Koryagina, of Russias Ministry of Economic Development, (snip) states that this new US Law, titled “Recovery Rebates and Economic Stimulus for the American People Act of 2008”, and to be signed into law by President Bush, does not, in fact, give any money at all to the American people, but instead is a loan on taxes for money [yet to be - sic] earned by US citizens during 2008.

    Dr. Koryagina states that the deception (snip) is contained in the very words used in this new law, and which says: “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).”

    The significance, Dr. Koryagina points out in understanding the exact wording of this new law, lies in the section name that states ‘rebate’ (a return of part of the original payment for some service or merchandise; partial refund), but in the actual wording of the law states that these monies are a ‘credit’ (an entry of payment or value received on an account) against imposed taxes for 2008.

    Dr. Koryagina’s report to the Kremlin further points out that this new law is, in fact, a deceptively engineered ploy by the United States to pump billions of dollars into their failing banking system as nearly half of Americans (currently staggering under a record $2.5 trillion in personal debt), in a new poll conducted by International Council of Shopping Centers and UBS Securities, have stated they will use these checks to pay off creditors.

    An American economist, Peter Morici from the University of Maryland, has also noted the odd ‘coincidence’ that the amount of monies under this new law equal the massive losses incurred by US banks from their loan debacles, and as he states:

    “It’s a good thing [US stimulus package] , but it’s not enough to head off recession. We’re talking about $150 billion, so this roughly offsets what the banks have lost” in soured housing investments."

    The greatest affect of this new law upon the American people, states Dr. Koryagina in her report, will be felt in 2009 when these ‘rebates’, given to them in 2008, will become due against their taxes, and which will push vast numbers of them into financial freefall.

    In just one of the many examples Dr. Koryagina has complied in her report: an American married couple with 3 children would receive $1,200.00 for the man and wife with an additional $300.00 for each child, bringing the total to $2,100.00. But, with the average US Tax Refund amount being just over $2,500.00 per family, this exampled family would see no tax refund at all in 2009. "(snip)

    ... hmmm, this certainly sounds plausible

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Our children and our grandchildren will be repaying this deficit spending stimulus package. If anyone thinks this will be repaid in April of 2009, I'd like to know what he's smoking and where I can get some.


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    Banned Melonie's Avatar
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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    ^^^ you are absolutely correct that the $167 billion dollars used to pay for the upcoming 'rebate' checks must be paid for by increasing future tax revenues. The conventional way this would happen is if the gov't simply printed up and sold more Treasury Bonds to the Chinese / Arabs / Japanese, used the proceeds of the bond sale to pay for the "rebate" checks, and then added the bond principal and interest payments to the tax burden of taxpaying Americans over the course of the next 20 years. However, according to Dr. Koryagina's analysis of the actual wording of the Economic Stimulus bill this is NOT what will actually happen in regard to the 'rebate' checks to be issued over the next few months.

    According to Dr. Koryagina's analysis of the fine print in the Economic Stimulus bill, checks will be individually calculated and issued to lower income taxpayers based on their IRS filing status, IRS number of dependents, and IRS reported income level. The IRS will therefore track the amount of 'rebate' checks sent out to specific taxpayers in 2008. And when 2009 rolls around, the IRS will 'add back' the amount of the individual 'rebate' checks that specific taxpayers already received against their 2009 total tax liabilities. This creates a situation where the 2008 'rebate' checks are actually individual taxpayer specific de-facto 'cash advances' against the same individual taxpayers' 2009 tax refunds. Thus the individual taxpayers will have no choice but to 'pay back' the amount of their 2008 'rebate' checks by April 15th 2009 right along with their other IRS income tax obligations.

    Again, Dr. Korygina's analysis of the Economic Stimulus bill has not been corroborated by US sources. That in itself however does not mean that Dr. Korygina's analysis is incorrect. In fact, the 'tin foil hat' crowd will tell you that the Economic Stimulus bill could very well be a successful attempt by the republican bill writers in the House and Senate to 'hoodwink' their democratic counterparts in an election year ... in expectation of a Democratic president plus democratic congressional majorities being in office by the time April 15th 2009 rolls around when low income American taxpayers suddenly discover that their 'usual' $2500 federal tax refund has now been reduced to near zero !

    ~
    Last edited by Melonie; 02-10-2008 at 07:03 AM.

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Now corroborating stories are beginning to appear in US media ...



    (snip)"Here's what you need to keep in mind while you're waiting:
    This isn't free money -- for most people
    To produce this cash, Congress created a one-time tax credit to reduce taxable income for most taxpayers this year.

    Normally, you wouldn’t see that cash until the spring of 2009, when you filed your 2008 return. But Congress wants to speed that money to you now, so checks will start going out in May.

    Remember, this is your money you're getting back, and the rebate checks are basically an advance on your 2009 refund. When similar rebates were sent out in 2001, said tax expert Mark Luscombe, "a lot of people were upset to see their (next) refund reduced."

    The only people for whom this really is free money are low-income folks (those who earn at least the minimum $3,000 required to trigger the checks or who receive at least $3,000 in Social Security or veterans benefits) who won't end up owing any taxes for 2008. If that's your situation, or you somehow wind up with a check when you technically shouldn't have -- you earned income in 2007 but won't in 2008, for example -- you won't have to pay back the money, said Luscombe, a principal analyst for tax research firm CCH.

    By the way, even if you didn't earn enough in 2007 to be required to file a tax return by April 15, Luscombe said, you probably should do so anyway to make sure you get on the Internal Revenue Service's mailing list for the rebates.

    The agency will get information from the Department of Veterans Affairs and Social Security to make sure those recipients get rebate checks, Luscombe said, "but regular taxpayers will need to file (for 2007) to get on the list." (snip)


    this basically confirms that 'working class' and 'middle class' Americans won't receive any net benefit at all from the 'rebate' checks ... since the amount of the checks they receive in 2008 will be 'subtracted' from their 2009 tax refund checks. Upper middle class and rich Americans will not be receiving rebate checks at all.

    this also basically confirms that 'low income' Americans will be receiving checks that are basically a 'handout' ... since they will not have to be repaid by the recipient. Instead, they will arguably have to be repaid by higher future taxes on 'middle class', and 'rich' American taxpayers ( and which 'rich' taxpayers typically have the means to minimize / avoid).

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Isn't this the samething they did shortly after Spetember 11th? I don't remember 100% for sure, but I thought the tax rebate I received was actually later deducted from my next tax return.

    I did my own taxes that year bc they were really basic, and I got an error letter instead of a check and I was so confused and had to tax it to H&R Block to re-do it for me. (PS I would never normally go to H&R Block for various reasons, but my aunt worked there at the time and it was free) Anyways I'm pretty sure it was bc the rebate was actually more of an advance.






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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Quote Originally Posted by Melonie View Post
    To produce this cash, Congress created a one-time tax credit to reduce taxable income for most taxpayers this year.
    My understanding, and I could be wrong, is that you would indeed report the rebate on your 2008 taxes BUT you would also report a new tax credit (see above) in the same amount thus giving you a net of zero (and thus no increase or decrease of your 2008 tax refund/bill as a result of this rebate).
    Last edited by Richard_Head; 02-10-2008 at 10:40 AM.

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    ^^^ actually, the 2008 credit is counterbalanced with a 2009 debit. So as long as the taxpayer earns more than $30k a year or so (such that the taxpayer actually PAYS income taxes thus making his 'rebate' check an 'advance' rather than a gov't handout), the net effect of the 2008 tax credit / 2009 tax debit is zero. But from a cash flow standpoint, this means that a taxpayer who earns more than $30k a year will receive a larger total tax refund in 2008 (their normal refund amount plus the special 'rebate' check), and will see a smaller total tax refund in 2009 (their normal refund amount MINUS the amount fo the special 'rebate' check).

    Of course if the 'taxpayer' earns less than $30k a year, the special 'rebate' check sent to them does not net to zero, since there won't actually be any 2009 income tax payments made by that low income 'taxpayer' from which the special 'rebate' check amount can be subtracted next year. In this case, the 'rebate' check is a unidirectional government handout.

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Sounds complicated. I mean, trying to remember that you got money this year but have to claim it next year. I suppose for simplicities sake I should be glad that I am not getting a rebate. Besides, I earn way too much money anyway and in the interest of fairness don't deserve money back, right?

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    Once again I have embraced my addiction and have put off the moral dilemma to another day.

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Quote Originally Posted by Melonie View Post
    ^^^ actually, the 2008 credit is counterbalanced with a 2009 debit. So as long as the taxpayer earns more than $30k a year or so (such that the taxpayer actually PAYS income taxes thus making his 'rebate' check an 'advance' rather than a gov't handout), the net effect of the 2008 tax credit / 2009 tax debit is zero. But from a cash flow standpoint, this means that a taxpayer who earns more than $30k a year will receive a larger total tax refund in 2008 (their normal refund amount plus the special 'rebate' check), and will see a smaller total tax refund in 2009 (their normal refund amount MINUS the amount fo the special 'rebate' check).
    I'm not so sure about that, unless I am confused (which is entirely possible), the rebate is being paid in 2008, the tax credit is for tax year 2008, the debit is also for tax year 2008, it should have no effect on tax refunds/taxes owed for tax year 2008 (which are technically filed in 2009). Where are you getting this 2009 tax debit information from? I assume it will be reported on a 1099-G for tax year 2008.

    Quote Originally Posted by Melonie View Post
    Of course if the 'taxpayer' earns less than $30k a year, the special 'rebate' check sent to them does not net to zero, since there won't actually be any 2009 income tax payments made by that low income 'taxpayer' from which the special 'rebate' check amount can be subtracted next year. In this case, the 'rebate' check is a unidirectional government handout.
    Those poor people get all the breaks, they are so lucky.

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    ^^^ my reference was to April 15th 2009 i.e. tax refund checks for tax year 2008 being reduced by the amount of this year's 'rebate' checks.

    This is basically the exact same arrangement that was used post 9/11

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Quote Originally Posted by Melonie View Post
    ^^^ my reference was to April 15th 2009 i.e. tax refund checks for tax year 2008 being reduced by the amount of this year's 'rebate' checks.

    This is basically the exact same arrangement that was used post 9/11
    I'm getting old, I don't recall the post 9/11 arrangement, was there a tax credit involved for that year similar to the one there apparently will be for this rebate?

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Melonie's right. You're effectrively getting your OWN money. The rebate checks are being sent out in 2008. The tax return you're filing by 4/15/08 and any refund you get is for money you made in 2007. When you file in April, 2009 it's for money you made in 2008 and there will be a reduction in your tax refund in the amount of your rebate check. All the Feds are doing is accelerating the tax refunds for TAX YEAR 2008 which represent YOUR money that you kindly let them hang on to before they refunded a portion back to you..

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    So they're giving you the money that you would have gotten after doing your taxes next year? That sucks, is there any way to NOT get that check, and get your normal refund in 2009??

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Quote Originally Posted by PrettyCurlieQ View Post
    So they're giving you the money that you would have gotten after doing your taxes next year? That sucks, is there any way to NOT get that check, and get your normal refund in 2009??
    Yes. Assuming you were due to get a refund NEXT year; in Calendar Year 2009 for Tax Year 2008.
    The whole stimulus package is a ridiculous political shell game. It creates the illusion that the government is doing something when they should have just left it alone.
    Most mortgages are NOT variable rate. Most mortgages are NOT in default.
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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    This is depressing. Thanks for being the bearer of bad news, guys...seriously, I wouldn't have known otherwise. Sadder but wiser girl, that's me.


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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    This makes me sad. My boyfriend came home with the news of free money a few weeks ago, and we thought, 'Maybe we can finally get out from under these damn bills!'....

    We should have known better. We don't live in Canada.

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Quote Originally Posted by PrettyCurlieQ View Post
    This makes me sad. My boyfriend came home with the news of free money a few weeks ago, and we thought, 'Maybe we can finally get out from under these damn bills!'....

    We should have known better. We don't live in Canada.
    There is no "free lunch". One refreshing impovement from Obama and Billary is SOME attention paid to actually PAYING for all the wonderful, nice things they want to do to us; I mean FOR us.

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Quote Originally Posted by FBR View Post
    Sounds complicated. I mean, trying to remember that you got money this year but have to claim it next year. I suppose for simplicities sake I should be glad that I am not getting a rebate. Besides, I earn way too much money anyway and in the interest of fairness don't deserve money back, right?

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Our Government's tax manipulation strategies are well known. Anything you get from 'them' will have to be paid back by someone or everyone. Let's say you get an energy credit for replacing your windows. Since our Government spends more than it takes in (deficit spending), you and I will have to have to cover your credit sometime. In this case it's an interest-free loan for a few months. Not bad, but not as advertised. Will it help our current/pending recession? Not very much I'm afraid.

    Odd that the Russkies had to point that out to us first.
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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Quote Originally Posted by Eric Stoner View Post
    Melonie's right.
    Based upon what? Did you not even read my post? Did you not see the part about the tax credit that we will also be getting? The one that will offset the debit?

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    This same rumor was circulating on CNN and Carol Guthrie, the Communications Director for the US Senate Finance Committee issued this statement.

    "The CNN story was corrected at the request of the U.S. Senate Finance Committee because the suggestion that taxpayers’ regular refunds would be reduced next year was inaccurate. The economic stimulus bill creates an additional tax credit for 2008 that decreases eligible Americans’ 2008 tax liability by the amount of the rebate check – and that additional money is being advanced to tax filers this year. Any refund a taxpayer would normally receive on his or her 2008 tax return will remain intact and will be received by that taxpayer in full."

    http://sayanythingblog.com/entry/tho...funds/#c257838

    Carol Guthrie
    Communications Director
    U.S. Senate Finance Committee"

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    If this Senate news release is true, I stand corrected. However, that's not what the wording of the new 'Rebate Law' says (as originally published).

    The conspiracy theorist in me wants to think that the Senate has now been 'caught' trying to pass off the original stimumus package 'rebate checks' as if they were a gift ... and has now been forced to actually MAKE them a gift to avoid political fallout !

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    ^^ Yeah, that's how I understood it AND that's not what they did the last time.
    A rebate is a rebate is a rebate. You get back part of what you paid in either witholding or estimated tax payments.

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Quote Originally Posted by Eric Stoner View Post
    ^^ Yeah, that's how I understood it AND that's not what they did the last time.
    A rebate is a rebate is a rebate. You get back part of what you paid in either witholding or estimated tax payments.
    I guess you understood wrong then didn't you?

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    Default Re: checking the fine print on the US 'tax rebate checks' ...

    Quote Originally Posted by Richard_Head View Post
    I guess you understood wrong then didn't you?
    Richard. I hope you were sitting down at the time. Yes, I read reports that were premature ; incomplete and inaccurate as do we all from time to time. And as much as I love her; Melonie falls short of absolute perfection. She comes close. Maybe closer than any of us but she's not infallible.

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