$500 tax credit: Too little, way too late
Today's Financial News - Posted January 23, 2009
The nation is starting to catch on to the fact that even the latest round of economic stimulus will not be enough to pull the nation’s economy out of the gutter. Instead of stuffing our bank accounts with cash, our leaders are stuffing their pockets with votes.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): There are few folks that truly believe the $825 billion stimulus package passing through Congress will be enough to get this nation back on track. Even worse, there are few people that believe the money will be enough to even slow the current downward spiral.
For proof of the legislation’s fiscal inefficiency let’s look at just one small, but politically important sliver of the package, the $145 billion “Make Work Pay Credit.” This $500 per worker credit is designed to get Americans spending once again. But instead of following the previous tactic of mailing a check to Americans, Obama wants to give us the money by taking less out of our paychecks.
In other words, he is going to “stimulate” our bank accounts a few bucks at a time. Instead of writing us a check that is big enough to buy a new TV or take a weekend road-trip, Obama’s plan pays us in increments, none of which are big enough to buy even a night out on the town.
In fact, for the workers making the least amount of money –the ones that pay very little or nothing at all in payroll taxes – will be forced to wait until next tax season when they get their tax credit in the form of an IRS rebate.
Just because you make enough money to notice the credit, but not so much you do not qualify, do not think you will see a bigger paycheck anytime soon. It will likely be June, at the earliest, before we see the credit. A White House staffer tells us that the Treasury will not likely have new withholding tables available for employer payroll departments until late spring. Without the tables, employers will have no idea how to handle the new credit.
So much for a quick fix.
What this nation needs is not a few hundred extra bucks in the pockets of Americans. We all know that money will be gone in a flash. What we need is a stimulus that boosts consumer confidence. Only when Joe the worker loses his fear of a pink slip will he start spending once again. The best way to keep workers working is by lowering corporate taxes and follow the tried-and-true tactics of trickle-down economics.
We all know $500 will not put the economy back on track but it will buy a president a heck of a lot of votes.
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January 24th, 2009 at 11:21 am
Right! We need to give the John Thain’s of this world MORE tax cuts, and be patient while it gradually trickles down to the rest of us!