Paul Bourque, over at UberAffiliate made a post regarding a letter he received from the IRS, letting him know he basically won’t be receiving a nice little rebate check of $600 or so. For most of us who don’t qualify for the rebate, due to our having an adjusted gross income over $75k ($150k for those filing joinltly), it may seem strange why the IRS would want to distribute money so unfairly…
I posted the following comment in response to his post to hopefully bring a bit of clarity to everyone on why the IRS/Fed are taking actions to stimulate the economy that seem counter-productive:
Paul,
I just wanted to point out a few things about the letter you received from the IRS.
First off, everyone should know that it cost the IRS over $42 Million Dollars (Yes: $42,000,000.00+) to send that form letter out to everyone who may or may NOT qualify for the rebate. Talk about a waste of money — should have just let the media tell the masses they have some petty cash coming their way.
Second, in response to WHY the IRS is not giving rebate checks to those of us who are filing taxes with too high of a gross income, the reasons are many but the main component is due to the overwhelming true statistic that “middle class” (and more recently the new so-called “upper lower-class” — those who make over $3k gross income — any lower and you don’t get a rebate either…) all spend most of their disposable income on everyday consumer goods, eating out and entertainment. Statistics show that those making over $75k per year spend FAR LESS, on those specific categories, and are most often very frugal with their more expensive purchases. They spend almost all of their “disposable” money wisely and will opt to invest such monies right back into their own businesses, if self-employed, or into real estate / stocks / mutual funds.
So, even though at first glance it might seem unfair to some of us, the reality is that the IRS and the Fed are putting this “stimulus” money right into the hands of those who will gladly hand it right back to the “rich” — and therefore bringing truth to the quip of the “rich getting richer.” The divide between the rich and the lower/middle classes will continue to broaden as long as they remain fiscally uneducated and unable to control their basic desires to spend money as if it will go bad, like a coupon with an expiration date.
There are several other reasons why the 2008 Stimulus Package actually helps the most wealthy 1% of America, yet also attempts to help those who allowed themselves to be swallowed up by the “irrational exuberance” (quote from Alan Greenspan, ex-Chairman of the Fed) of the last decade or so. But this is intended as a comment to your post, not a book, so we won’t go into all the details now.
I’m glad to hear you aren’t receiving your “rebate check” — it means you’ve done better than 95% or so of all American citizens this last year in gross income.
Have a great night!
- Michael, halfhourworkweek.comP.S. Also, keep in mind, the IRS knows most individuals earning over $75k AGI will claim their income and file their taxes accordingly and they don’t really care about those making under $3k. So, they’ve just provided an “incentive” for everybody else to quickly file their taxes on time to get that rebate and, in effect, get more tax dollars into the hands of the Fed… faster.
It is a positive move for everyone to have active conversations on this topic… staying informed keeps you ahead of the game!
