Tax rebate checks will be in the mail by spring

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WASHINGTON - Uncle Sam wants you - to spend.

And he's giving you some extra cash to do it. The checks aren't in the mail, but they will be soon.

President Bush signed legislation Wednesday to rush rebates ranging from $300 to $1,200 to millions of people, the centerpiece of government efforts to brace the wobbly economy. First, though, you must file your 2007 tax return.

More than 130 million people are expected to get the rebates, starting around May. Congress, Bush, the Federal Reserve and Wall Street are hoping the money will burn such a hole in people's pockets that they won't be able to resist spending it. And the spending is supposed to give an energizing jolt to a national economy that is in danger of toppling into a recession if it hasn't already.

Whether people actually spend the money remains to be seen. A recent Associated Press-Ipsos poll indicates most people have other plans. Forty-five percent said they planned to pay off bills, while 32 percent said they would save or invest it. Only 19 percent said they would spend their rebates.

The measure Bush signed - a $168 billion rescue package passed with lightning speed by Congress last week - includes not only rebates for individuals but also tax breaks for businesses to spur investment in new plants and equipment. That, too, would help bolster U.S. economic activity. The package also contains provisions aimed at helping struggling homeowners clobbered by the housing collapse and the credit crunch refinance into more affordable mortgages.

The emergency plan marked a rare moment of cooperation among political rivals fearful that an ailing economy during an election year would invite voter retaliation.

Bush, who called the measure "a booster shot for our economy," praised the bipartisan cooperation. "We have come together on a single mission - and that is to put the people's interests first," he said.

Who gets a rebate? Most people who pay taxes or earn at least $3,000, including through Social Security or veterans' disability benefits. Singles making more than $75,000 and couples with income topping $150,000, however, will get smaller checks, up to the top limits for any rebate: incomes of $87,000 for individuals and $174,000 for couples.

To get any rebate, you must file a 2007 tax return and have a valid Social Security number. If you already filed your 2007 return, the IRS says you don't need to do anything extra.

Most taxpayers will receive a check of up to $600 for individuals and $1,200 for couples, with an additional $300 for each child.

People earning too little to pay taxes but at least $3,000 - including elderly people whose only income is from Social Security and veterans who live on disability payments - will get $300 if single, or $600 if a couple.

The IRS will send out rebates - by mail or by direct deposit into your bank account - through the late spring and the summer. The rebates come in addition to any regular tax refund. The IRS will continue to send payments until Dec. 31, an effort to accommodate taxpayers who file tax returns later in the year.

To pay for the rebates - which are estimated to cost about $117 billion over the next two years - the government will have to borrow more money, enlarging the budget deficit.

The Bush administration and some private economists are hopeful the rebates, tax breaks and aggressive interest rate reductions by the Federal Reserve will help the country narrowly dodge a recession. An increasing number of economists, however, believe the country has already fallen into its first recession since 2001, and they are simply hopeful the rescue package will limit the damage. Most people - 61 percent - say the economy is now in a recession, according to the AP-Ipsos poll.

"I do think this will give the economy a shot of adrenaline," said Stuart Hoffman, chief economist at PNC Financial Services Group.

The National Bureau of Economic Research, a private research organization, looked at what people did with their 2001 rebates. The study found that "households spent about 20 to 40 percent of their rebates on nondurable goods" - which can include things like food and clothing - in the first three months. They spent roughly another third in the following three months.

With the current stimulus, the economy will log growth in the range of 2.25 percent to 2.50 percent in the second half of this year - roughly one full percentage point higher than without the bracing tonic, Hoffman estimated. That would be closer to a more normal rate of around 3 percent, he said.

That in turn should encourage businesses to step up hiring. Nervous employers cut 17,000 jobs in January, the first nationwide loss of jobs in more than four years.

Edward Lazear, chairman of the White House Council of Economic Advisers, predicted, "The stimulus will have the effect of increasing jobs by about half a million above the number that would have been the case in the absence of that."

Still, even with the rescue efforts, some analysts fear the economy could backslide and flirt with recession again in 2009.

To help the severely depressed housing market, the stimulus package would raise temporarily to as high as $729,750 the limit on Federal Housing Administration loans and also raise the cap on loans that mortgage giants Fannie Mae and Freddie Mac can buy.

Raising those limits, should provide relief in the market for "jumbo" mortgages - those exceeding $417,000. The credit crunch hit that market hard, making it very difficult, if not impossible, for people to get those loans. That has plunged the housing market even deeper into turmoil.

House Speaker Nancy Pelosi of California said the provisions will provide "families a second chance at the American dream of homeownership by helping them refinance their mortgages and avoid foreclosure."


What to do with your dough

How will you spend your refund? Leave a comment below.

Comments (20) Add comment
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jebko
0
Points
jebko 02/14/08 - 04:10 am
0
0
I'll send it back to my

I'll send it back to my representative in Washington with a note saying "I want the FAIR TAX HR 25!"

AugustaVoter
2
Points
AugustaVoter 02/14/08 - 06:42 am
0
0
I will spend my bonus refund

I will spend my bonus refund on gas for my car. I think Bush is trying to pad his pockets since he is a lame duck prez and knows that his gas price hijack will be over once he is out of office. Wouldn't it be nice to be paying under $2 a gallon again? Bush is an oil man and he is making money off of the higher prices. He is making the money by giving it to John Q. Public and causing more deficit in the government. Basically, he is padding his pockets with more government money.

wootchieone
4
Points
wootchieone 02/14/08 - 07:02 am
0
0
Gas for under $2 a gallon?

Gas for under $2 a gallon? Dream on, Augusta Voter, "You ain't seen nuthin' yet!"

DontTazeMeBro
2
Points
DontTazeMeBro 02/14/08 - 07:47 am
0
0
taxes

taxes

GR-10
0
Points
GR-10 02/14/08 - 08:49 am
0
0
Buy American!!.... A couple

Buy American!!....

A couple weeks ago in the news, a tanker collided with a dredging boat in The Newark Bay section of New York Harbor. The tanker was a Liberian-flagged tanker and was loaded with Orange Juice. I began to ponder, why in the heck is the USA importing Orange Juice, when we have groves of oranges in Florida and California.....

Ok, I discover the OJ is being imported from Brazil. Part of the Free Trade Agreement. China supplies apple juice for a name brand company. Also, I have a bottle of store brand apple juice that comes from Chili. Now in my brief research, I discover that many products I thought were produced in the USA are imported. Including various juices, fruits, veggies, soda (pop) flavoring, clothing, sheets, socks, undergarments and more.
....
Keep an American employed.
....
Buy American if you can find anything still produced in America.

Nothing else to say
2
Points
Nothing else to say 02/14/08 - 08:58 am
0
0
I'll buy some carpet.

I'll buy some carpet.

bowler
3
Points
bowler 02/14/08 - 09:33 am
0
0
i'm going to buy new bowling

i'm going to buy new bowling equipment

WW1949
19
Points
WW1949 02/14/08 - 10:29 am
0
0
Why is there a cutoff for the

Why is there a cutoff for the rebates. The largest taxpayers should get the largest rebates since they are the ones that pay the most. It will be just like the unearned income credit which amounts to welfare. Those who receive most likely have never paid any tax and work under the table except for a few months to get a W-2 so they can qualify.

As far as buy American-I do when I can and will never buy a Toyota, Honda, Subaru or any other Jap car. I buy GM or Ford which have never given me any trouble. They just need to get their union problems streight and the price of their cars will drop.

GR-10
0
Points
GR-10 02/14/08 - 10:58 am
0
0
Your next ford may be made

Your next ford may be made in: 1. Bahia Plant Bahia, Brazil Ford Fiesta Ford EcoSport Plant opened in 2001..........
Scheduled to begin production for US market in 2009 ........2. Blue Diamond Truck Escobedo, Coahuila, Mexico V Ford F-650
Ford F-750 Ford LCF...... .3. http://en.wikipedia.org/wiki/List_of_Ford_factories ....
Check where in the WORLD your items are being manufactured.
...........
BUY AMERICAN!.........
Toyota Motor Corp., the world's second-largest automaker, said it will spend $120 million and hire 150 more workers to boost production of transmissions at a West Virginia factory to support North American sales growth.

MyTake
0
Points
MyTake 02/14/08 - 12:15 pm
0
0
The last thing we need is to

The last thing we need is to dump more gasoline on the economy which is already overpumped. I should buy a couple of Krugerrands with my family's refund. But my wife suggests cashing some of it to spend downtown. At least then it will be stimulating something that needs it. The last thing we would ever do is buy a big screen TV at Wal-Mart, that would just whisk the refund straight to China.

betterme706
0
Points
betterme706 02/14/08 - 11:49 pm
0
0
okay now without rude

okay now without rude comments i see it says 600-1200 and 300 for each child so do this mean the limit some people can get back is 1200 or is it lets say someone has 3 kids and they are a couple so they would get 1200 + 900? so what is it?

Augusta resident
1368
Points
Augusta resident 02/15/08 - 12:34 am
0
0
Gr-10 is correct. Ford is

Gr-10 is correct. Ford is only assembled in the U.S. You need 80% parts made in USA to qualify as American made. The Ford Mustang doesn't qualify but the Toyota Camry does. Most Ford and GM parts are made in Mexico and Canada. Most Ford and GM cars I've had either left me stranded or had a bunch of little things go bad.

chasrebel1
0
Points
chasrebel1 02/15/08 - 11:12 am
0
0
If you are going ton buy a TV

If you are going ton buy a TV from Wal-Mart please go to either Evans or Deans Bridge Rd. You take your life in your own hands going in the one on Bobby Jones with the "expansion". Something might fall on you or you could inhale some dangerous dust while they grind the tiles.

EdithPiaf
2
Points
EdithPiaf 02/15/08 - 05:19 pm
0
0
The rebate should be one

The rebate should be one months salary (GROSS PAY, not take home). And they should pick which ever month you made the most money. They could afford to do that. The government has TONS of expendable money, and guess where it came from...? I'm not saying I don't appreciate this "rebate check" that they are going to send out. I'm saying the amount is an insult to all of us hard working people that work hard to keep a roof over their families head and food on the table!

fineazz320907
0
Points
fineazz320907 02/15/08 - 07:07 pm
0
0
i want everyone reading this

i want everyone reading this to know i am a tax professional and the money you are about to recieve...is NOT the goverment giving you free money this is an advancement on next years taxes...so in other words what they are giving you now..they are taking away from you next year......READ UP ON IT

fineazz320907
0
Points
fineazz320907 02/15/08 - 07:11 pm
0
0
one more comment to you who

one more comment to you who wrote that eic is for welfare....excuse me sir...i qualify for the eic and i work 365 days a year and have never qualified for any state asst, so get your facts straight and learn how to spell.....

WW1949
19
Points
WW1949 02/15/08 - 08:53 pm
0
0
fineazz320907. I am sure you

fineazz320907. I am sure you work 365 days a year and I am sure you never take a vacation or a day off. That has nothing to do with what I said. The money you receive is call earned income credit but it is unearned income. You did not work for it. It is given to you because of your income level which surely amounts to welfare any way you call it or any name the government puts on the program. It is money taken from one person a redistributed to another person. If you are a tax professional then you know that most of the people getting this money back have never paid any taxes.

Dark_Knight
0
Points
Dark_Knight 02/16/08 - 04:01 am
0
0
I think i will get some side

I think i will get some side steps for my F-150.

He_Who_Must_Not_Be_Named
0
Points
He_Who_Must_Not_Be_Named 02/16/08 - 04:38 am
0
0
I'm going to use my money to

I'm going to use my money to buy Charlieyonce a life. If there is any left I'll buy a point for Shivas and some evidence of Bush's crimes for Cain.

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