The Bush Stimulus Package.

[madurodave]

I'm sorry, but I havent followed this very closely, so please forgive my ignorance.  Is this for EVERYONE who makes under $85,000 per year?  Also, when is this supposed to happen?

Good questions Mark.  First off, $800 is NOT a figure the administration has put out there.  Not really sure where it came from but whatever.  Secondly, it sounds like what the administration wants to do is to stimulate the economy with about 1% of GDP (140-150 billion) being the total amount for tax rebates and incentives for business and individuals with about 2/3 of the money going to individuals in the form of some kind of rebate.  The cutoff for getting this rebate also hasn't been set in stone yet (none of this has really).  I've heard everything from 75k-100k.  Lastly, they want it to be "immediate" so by Washington standards I'd guess a couple months to get it hammered out and a couple more for implementation.  Tonto's probably right on with June/July. 

Just in time for everyone to buy a ticket to Vegas!

I heard from multiple sources that the fiqure was $800/$1600.

Also, is there an income limit?? 

[macallan2]

I'm sorry, but I havent followed this very closely, so please forgive my ignorance.  Is this for EVERYONE who makes under $85,000 per year?  Also, when is this supposed to happen?

Good questions Mark.  First off, $800 is NOT a figure the administration has put out there.  Not really sure where it came from but whatever.  Secondly, it sounds like what the administration wants to do is to stimulate the economy with about 1% of GDP (140-150 billion) being the total amount for tax rebates and incentives for business and individuals with about 2/3 of the money going to individuals in the form of some kind of rebate.  The cutoff for getting this rebate also hasn't been set in stone yet (none of this has really).  I've heard everything from 75k-100k.  Lastly, they want it to be "immediate" so by Washington standards I'd guess a couple months to get it hammered out and a couple more for implementation.  Tonto's probably right on with June/July. 

Just in time for everyone to buy a ticket to Vegas!

I heard from multiple sources that the fiqure was $800/$1600.

Also, is there an income limit?? 

If you check all credible sources you'll see the number hasn't been set.  It's just speculation at this point with people pulling figures from the supposed pool of money that they project will be available.  That's the beauty of the media these days.  They run with these ideas long before they probably should.  If I had to guess I'd think they'll put the cap at about 75k per person.  That would make the household income 150k or less which seems in line with the working definitions of "middle class". 

Of course, we could all just wait until Bush unveils the plan in a month or so and stop fussing over nothing!

[Jimmie the Mum]

Tax cuts are good for everyone. We all benefit one way or the other.

[scott81425]

yup, a tax cut will only help the economy, way i see it anyway. and i'm pretty sure its proven that of the ones who use it to pay down there debt, will just use that available credit on their credit card to put themselves right back into debt. everything i had read and heard on it said 500, but 800 is even better. oh well, i suppose if it happens, great. if not, well, i'm sure i'll survive.

[tafdom]

The world stock market is crashing as we speak from this Bush give a way.  Tomorrow, just as the last week will be ugly.

http://biz.yahoo.com/ap/080121/world_markets.html

The 800# came from the GDP and will probablly happen. It is also due per filing taxpayer. I know we could sure use it but would rather it not happen at all because I don't think it will work this time either. It didn't in 01 or 03. I follow the market and my tube is on CNBC everyday from 6AM til I leave @11, and Bloomburg @ night.  Jim Cramer is a clown on TV but is at the top of the heap on what he does. It's not done and I think the big R I have felt is already on us. The subprime is a small % of greedy, dirty people that is bringing the US to it's knees along with the rest of the world. It's gonna get real ugly in the opinion of many people and Ben B has stood by and watched it happen with our entire admin. I don't know if Greenspan would have been better but age and time behind the wheel sure would have helped. We are in one big mess!

[tafdom]

Updated from 3:04 p.m. EST

Treasury Secretary Henry Paulson, House Speaker Nancy Pelosi and Minority Leader John Boehner today agreed on an economic stimulus plan. The plan is the result of several days of hard negotiating.

The plan, however, may be similar to other plans initiated by the Bush Administration --too little and too late.

Much of the stimulus will come in the form of one-time tax rebates to individual tax payers -- to the tune of $100 billion. According to The Associated Press, 117 million families will receive rebates. Individual taxpayers will receive $600; families will receive $1,200 with an additional $300 per child.

An additional $50 billion has been agreed to for business tax cuts. The plan would allow corporations and small businesses to write down 50% of the purchase of capital equipment now, rather than wait for it to depreciate much more slowly over time. This may spur business investment.

The plan also offers help for the mortgage crisis. It lifts the limit on the Federal Housing Administration loans to approximately $725,000. The previous limit had been $362,000 and $417,000 for Fannie Mae (FNM) and Freddie Mac (FRE) . According to a report on CNBC, Rep. Barney Frank's Finance Committee will soon release the details. Levels may be set based upon local housing markets. This would make sense considering home prices are much higher in places like California and New York as compared to Michigan or Texas.

Many economists have said that favoring low- and middle-income earners would create the most likely immediate stimulus. Low-income earners remain less likely to save. The Wall Street Journal recently reported that many of the tax rebates in 2003 went towards savings, not spending. Time will tell how helpful tax rebates prove to be. The plan announced today will help 35 million low-income families, according to the AP.

A particular sticking point between Democrats and Republicans had been low-income earners who don't pay taxes but who need help. The agreement gives a $300 rebate to people who earn more than $3,000 but don't pay taxes. More than 70% of the rebates will go to those who pay taxes.

A significant problem with the plan would be timing. Checks would not be mailed out to taxpayers until the earliest as of June of this year -- that's almost six months from now. It's not even clear what effect this would have on individuals who are self-employed.

What the Congress should do is authorize an immediate rebate to ensure that checks go out as soon as the bill passes Congress. The economy needs the stimulus now -- not six months from now. If the economy had time to wait, then the government could just wait for the Federal Reserve rate cuts to take effect.

Furthermore, the plan offers no help to states. States and local municipalities already face the specter of decreasing tax revenues from declining property values. Some states need help more than others depending on the volatility of the local housing market and the saturation of subprime lending.

The plan will be submitted to the Congress immediately. With any luck, the Congress will have the common sense to modify the plan to work it into a more immediate stimulus, or face the very real possibility that the stimulus will come too late to help a faltering economy.

[ColbyPants]

While I agree a tax break would be nice, and I can even see it helping the economy in the short term, I am mildly concerned about one thing.  Where is this money coming from?  Last time I checked, we are running in the hole as a country, are we cutting spending somewhere to offset it?  Are we borrowing more from foreign countries (which is a potentially dangerous long term plan)?

Like I said, I could use the money, I just wonder where we are getting it?  I hope it will be done responsibly.  ET is right though, we have to make sure we are fueling OUR economy with this money and not the Chinese juggernaught.

TomC

[US_Tank]

Well Tom in actuality the Treasury has been taking in dollars at record paces due to an increase of workers stemmed from the initial tax cuts.  Thus we just have more taxpayers paying in from employer withholdings.

Problem is that we have too much earmark spending and we are funding a war also.  But I think that the stimulus is just that.  Further stimulate the economy.  When you stimulate the economy you will create more jobs, which increases more money flowing into the U.S. Treasury.  My premise is that they are counting on this influx of current dollars to help fund this.

Just my .02 but it will cost you a buck! 

[bartok]

Tax cuts are good for everyone. We all benefit one way or the other.

There is no tax cut being proposed.  They're just deferring the taxes so someone else can pay them down the line - probably you out of your retirement account, or your children.  To cut taxes, and not just delay paying them, you need to reduce spending.

I'm not saying this is the worst idea in the world, but a significant portion of this will be spent overseas, and not here.  And there are very few economists who think this will have any appreciable effect on the economy at all.  I view it as more election-year pandering than a serious attempt to address our problems.

[tafdom]

Bingo