Tax Rebates

[LEXIRX330]

Individuals who pay income taxes would get up to $600, working couples $1,200 and those with children an additional $300 per child under the agreement. Workers who make at least $3,000 but don't pay taxes would get $300 rebates.The rebates, expected to go out in June, would cost about $100 billion, aides said. The package also includes close to $50 billion in business tax cuts.

The package would allow businesses to immediately write off 50 percent of purchases of plants and other capital equipment and permit small businesses to write off additional purchases of equipment. A Republican-written provision to allow businesses suffering losses now to reclaim taxes previously paid was dropped.

The rebates would phase out gradually for individuals whose income exceeds $75,000 and couples with incomes above $150,000, aides said. Individuals with incomes up to $87,000 and couples up to $174,000 would get partial rebates. The caps are higher for those with children.

That is nice! Go figure...if you don't pay and taxes you get a tax refund??? But if you make too much money and pay taxes no refund for you! :chairshot:

[djspawn00]

as an economist all I have to say is.... wtf...

:whistles:

[nc211]

Individuals who pay income taxes would get up to $600, working couples $1,200 and those with children an additional $300 per child under the agreement. Workers who make at least $3,000 but don't pay taxes would get $300 rebates.The rebates, expected to go out in June, would cost about $100 billion, aides said. The package also includes close to $50 billion in business tax cuts.

The package would allow businesses to immediately write off 50 percent of purchases of plants and other capital equipment and permit small businesses to write off additional purchases of equipment. A Republican-written provision to allow businesses suffering losses now to reclaim taxes previously paid was dropped.

The rebates would phase out gradually for individuals whose income exceeds $75,000 and couples with incomes above $150,000, aides said. Individuals with incomes up to $87,000 and couples up to $174,000 would get partial rebates. The caps are higher for those with children.

That is nice! Go figure...if you don't pay and taxes you get a tax refund??? But if you make too much money and pay taxes no refund for you! :chairshot:

I haven't a clue either, but, I do think the thinking is those who really need it, will turn right around and spend it, which is exactly what the economy wants. Those who don't need it as much, might just sock it away in savings, which keeps it out of rotation.

[RX in NC]

Sorry guys but it's too little too late, especially when one considers the depths of the national debt that this country has plundered its way into. We're in the opening salvos of a recession regardless of the spin you hear coming out of the White House. Our blundering buffoon of a president wouldn't know an economic recovery if one bit him in the !Removed!....

Save your breath all you conservatives out there. I've been a registered Republican since 1972 but after the catastrophe otherwise known as the Bush administration, I'm downright ashamed to admit it....

[lenore]

Both parties are sick and disgusting to the core, I too a registered Republican, How sad I cant tell any difference between them. We need to empty the House and start with all new people on both sides of the isle.

[GDixon]

How about adding a new aisle in Congress and vote Libertarian? Ron Paul and congressional candidates are out there waiting.

As far as the tax cut....remember that there is an election in Fall. The Republicans propose it, the Democrats pass it, and both parties claim victory. The candidates all say that THEY, and their party, were the ones to put the money in your pocket.

The cut will apply to lower income people because, in general, there are more voter numbers there and voting the pocketbook is a tradition in the USA.

Neither the Republican nor the Democrats can be blamed for the multiple messes this country is experiencing. It is all a facade under the name of "Politics". Anyone actually expecting the "change" that both parties are pushing is exercising self-deception. The primary purpose of any establishment is to continue its existence.

Has anyone read the novel 1984 recently? :(

[nc211]

Boy, if this isn't my kind of thread! We've got politics, economy, and money! Might have to drag up the ole' Dubbya' avatar for this one.... hahaa...

In my opinion, the economic situation today is actually good, and well needed. I say this because at times, everyone and everything needs to be reminded that they're not untouchable and need a humbling. The economy is like a tempermantal teenager, and if left unchecked, will certainly get itself into trouble. The new thing with this hiccup is the classroom size is much larger, with the europeans, germans, asians and mideasterns all wrapped up in the commercial markets. There is an organization called CMSA, which stands for Commercial Mortgage Securitization Association. For those of you who know what "sercitization" means, then you understand the premise. It is basically the pooling of similar loan types into one bucket, aka, security. That pool is divided up into different levels of default risk, like a stack of champagne glasses. The cash "monthly mortgage payments" is the champagne, poured from the top down. The top glass, is the least risky, as it gets paid first. But, the problem there is the basis of risk v. return. The least risky, gets the least return "interest rate". If the champagne bottle is only half full, well, you can see at what level of the champagne glasses won't get filled. Top glass is AAA rated, and it goes down from there "AA,A,BBB,BB,B,CCC,CC,C, etc.." When this was introduced, real estate lenders/investors were underwriting similar deal types "office, hotel, single family housing, apartment, warehouses, etc..", and each property type had it's own risk rating. Some riskier than others.

The problem today is due to something called a CDO, aka, Collateralized Debt Obligation. These are tricky little boogers to decode. The flow of cheap money over the past 5 years, means institutions have more money to pump back out into the economy "loans". Well, lenders had sooo much investments out there, that somebody figured out a way to swap pieces in and out of those pools, enter the CDO. Before, your pool of assets were office buildings only. You knew what your investment was backed by, period. And you can still do this as an investor. But, a pool of crappy office buildings didn't get very good ratings from Moodys, Standard & Poor, etc... and people weren't buying them. So, anyone here familiar with how a bank handles their repo-cars? You take a package of 15 cars, all crap, and try to sell them to a dealer, which didn't work very well. But, if you pepper that package of 15 cars with 2 or 3 really good cars, they sell right away! Same prinicpal in the CDO market. Take a portfolio of crap properties, reslice them up with a few good ones added in, and wa-la, better rating from Moody's and Standard-Poor. Guess what the crap properties mostly consisted of???????? SUB PRIME LOANS. Toss in a few good multifamily projects "apartments" as the lipstick on the pig, call up the european investors, and they're all over them like britney spears to a strip pole.

The issue NOW, is that all of these international investors don't know what they've got in their CDO's, and they're freaking out! It is THEIR fault for not properly underwriting the investment, not investigating what the pool was made of. They simply saw an investment that could yeild them 10%, and bought it, period.

What has to happen to bring them back is to get them over the learning curve. I attended a conference last week in Florida, of which Tony Blair spoke at, among others. I found it fascinating that the european markets have no clue between the difference of a single family home, and a multi-family home "apartment projects". They equate the two as the same thing, and they're NOT. In fact, the multifamily stuff is the only property segment that is forecasted to continue it's growth "gotta' house those subprime defaults".

Is it Bush's fault? I don't think so, to be honest. He reacted to 9/11 to keep us spending to prevent a total economic meltdown. The fault is on us, to be honest. All the spending, the credit card bills, this drunken haze of "I'll pay it off later", and using your home's equity as an ATM machine. Granted, it is what it is, but can anyone really say they think it's wise that your home sold for $75 a squarefoot just 36 months ago is now worth $160 a squarefoot? All of those poor people out there that bit on those 125% loan to value loans, on a 5/1 arm back in 03', are now facing rate movements, they're tapped out on the Visa, got big cars, and have mortgages that are worth more than the house, and getting worse as prices slide.

Additionally, the vast majority of these residential foreclosures aren't actual families being tossed out on the street. A person will dig ditches, flip burgers, and even rob a bank, before losing their home. No, it's the speculative investors that bought these houses for a flip, that can't flip them anymore, and are simply tossing the keys to the bank and walking away.

Either way fellas, we're in for a bumpy landing, period. It's coming, and will go. The government is going to get wacked, no matter if it's a democrat, republican, indi, lib, etc... They're the ones with the money machines.

Oh, and let us not forget the back room deals cut on 9/12 for fly-over rights, base positioning rights, etc... around the globe. You honestly don't think Turkey let us come in and set up shop for Iraq for free do you? You don't think Pakistan is really our buddy because they love us?

[RX in NC]

I'm pointing out here that I did not solely blame Bush for the coming recession in my post above. I simply commented on what a moron he is. There are multiple sources to blame for the mess we're in, from the current administration all the way on down to the stupid people willing to sign up for home loans that they neither understood nor could afford....

I hope that many more Americans will learn from the coming recession that "balancing the budget" applies to households just as much if not more than it does to any country at least two steps above a banana republic. If our nation would finally learn the lesson that each gainfully-employed household's responsibility is to ensure that it nets more than it spends each year and actually allocates at least 5% of net earnings to savings/investing, the good ol' US of A would be able to weather the storm much more comfortably whenever our country experiences the periodic pitfalls that occur in any free market economy. As pointed out by a previous poster, tax rebates are politically motivated and this one will stand up to the coming recession the same way as a grass hut on the beach will stand up to a 60-foot-high tsunami....

[nc211]

Oh I know you're not blaming Bush directly RX, sorry if my post came off that way amigo. Besides, Bush is too busy creating earthquakes in indonesia, causing floods in sudan, and causing traffic jams in LA for this stuff! Hahaa...