Don’t blow your paltry share of the bailout
Today's Financial News - Posted February 12, 2009
Washington is getting ready to hand you a tax break. While the poor and the old are making out like bandits, the working guy is getting fleeced.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): I have got to hand it to the Obama Administration. When the nation’s newest leader/pop star ran for office, he made some outrageous promises. Few folks, even the zealous throngs that voted for him, thought he would make good on his word.
So far, he is doing it with surprising conviction.
Take his middle-class tax cut for example. Obama promised he would cut taxes for 95% of all Americans. That is a tough challenge, especially for a democrat, but son-of-a-gun if he isn’t about to do it.
When Congress approves the current stimulus bill, the average working American will get a tax break… in the form of $13 per week to a total of $400.
Now, before you go laughing your way to the poorhouse, let’s look at exactly what that paltry chunk of change will buy. You may be surprised.
Start a Blue Chip portfolio
With $13 bucks, you could buy 185 shares of Sirius XM Satellite (NYSE:SIRI). At just under seven cents each, you could turn your $400 tax cut into a $500 capital gains liability with an increase of just a few pennies.
Or, with the same thirteen bucks, you could get some of your old tax layout back by purchasing five shares of General Motors (NYSE:GM) or seven shares of Ford (NYSE:F) or four shares of Citigroup (NYSE:C). Just two years ago, thirteen bucks would not have even gotten you a quarter of a share of Citi or half of a stake in GM.
What may be more surprising is what $13 will not buy you. Unfortunately for that baby-producing machine in California, it will not come close to buying a pack of diapers. No wonder she will have to rely on the state to take care of her living obligations.
And Tim Geithner, the new IRS chief, is out of luck because the cash won’t be enough to buy the latest edition of Turbo Tax. If you don’t want to figure your annual obligation by hand, you will have to save your “tax cut” for at least a month.
Finally, there is one thing thirteen bucks will purchase that is extremely valuable, at least to politicians – a vote.
This so-called middle-class tax break gives Obama all the reason he needs to stand on a pulpit (that is, if he ever gets down from it) in four years and claim he lived up to his promise.
Within days, if not hours, Obama will pull out his magical pen and write a check for nearly $800 billion. If you are lucky, you will see $13 of it for a few weeks over the next year.
Try not to spend it all in one place. Remember, we need to spread the wealth.
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