It’s interesting to see a bi-partisan move to put money (ahem, OUR money) back into the economy by sending checks for hundreds of dollars to millions of people totaling $150 billion. The same thing can be accomplished with lowering taxes. Treasury Secretary Henry M. Paulson, Jr. discusses the ‘stimulus’ package. . .
Yesterday, I joined Speaker Nancy Pelosi and Republican Leader John Boehner to unveil a bipartisan legislative package that has two main elements – one-year individual tax relief so that working Americans have more money to spend, and one-year tax incentives for businesses to invest and grow. Together, the legislation will inject about $150 billion into the economy in 2008, creating over half a million additional jobs by the end of this year.
Specifically, working Americans who have earned income of $3,000 or more will be eligible for a minimum rebate of $300 for an individual or $600 for a couple filing jointly. Based on the amount of federal income taxes paid, that rebate rises as high as $600 for an individual and $1,200 for a couple filing jointly.
In addition to the individual rebate, families will receive an additional $300 per child credit. The individual rebate and the child credit phase out starting at $75,000 in income for individuals or $150,000 in family income.
I’d say the best way to stimulate the economy isn’t to give the money back, but to not take it, or not take so much, in the first place. You want to stimulate the economy, you leave the money where it will do the most good, in the hands of the people who earned it.
It is a leap to assume that this means that the democrat presidential aspirants, or Nancy Pelosi and Harry Reid, are now in favor of tax cuts so I won’t even suggest it. Their M.O. is to take the money first, then spend it where it will get them the most votes, regardless of the consequences to the economy and regardless to whether the money spent was effective.