You’ll get a check this year, but you’ll get less of a refund next year.
The checks are an advance on next year’s refunds, and most, if not all of the money, will be deducted from taxpayers’ refunds in 12 months’ time.
What’s interesting about this is that it illustrates exactly why these “tax rebate” checks (it’s hard to call them tax rebates when a lot of the people they’re going to paid little or no federal taxes) are no “economic stimulus” at all. Every year hundreds of millions of tax-paying Americans receive refunds from the government. Why would this rebate be any different from that? So we get a little more this year.
It’s not going to make a lot of difference.
If we want long-term economic development, we need long-term tax relief. That means cutting tax rates, not cutting checks.
Update: The passage quoted above has been mysteriously disappeared from the linked CNN article.
Update: The Communications Director for the Senate Finance Committee was kind enough to stop by and leave this clarifying comment:
The CNN story was corrected at the request of the U.S. Senate Finance Committee because the suggestion that taxpayers’ regular refunds would be reduced next year was inaccurate. The economic stimulus bill creates an additional tax credit for 2008 that decreases eligible Americans’ 2008 tax liability by the amount of the rebate check – and that additional money is being advanced to tax filers this year. Any refund a taxpayer would normally receive on his or her 2008 tax return will remain intact and will be received by that taxpayer in full. Note that the AP is reporting this accurately in its “Rebate Questions and Answers” article: http://www.guardian.co.uk/world/feedarticle/7294441
U.S. Senate Finance Committee
I still don’t think the rebates are going to stimulate the economy, but this is at least better than them just being an advance on future refunds.