Rebates & Tax Incentives

Politics

With growing fear that the USA Economy is heading for a ‘[[recession]]‘, President Bush unveiled a whopping $ 150 Billion Stimulus package. No real details really, but that UP TO $ 800 rebates to INDIVIDUALS ($ 1600 Max. for Households) is part of the plan. Then too, he seemed to say that the IMPETUS OF THE PLAN was to provide TAX INCENTIVES to BUSINESS, to have them INVEST MORE IN THEIR BUSINESSES.

Bush said a key provision of the package should be a tax incentive for American businesses “including small businesses” to help them make major investments in their companies this year. The stimulus also should provide quick money to individuals to meet everyday bills and other necessities, Bush said, adding the move will increase consumer spending and “lift our economy when people might spend less.” (source)

I suppose it makes sense, but I don’t know. I mean if I was about to lose my home, would I be wanting ‘tax incentives‘ for my small business, or would I want help in fighting off ‘foreclosure‘? Yes, the $ 800 ($ 1600 per household) would help, but the key to that figure is the ‘UP TO‘ that precedes it. I mean, just WHO is eligible for the maximum? What are the CRITERIA being set, to let people APPLY FOR THAT REBATE?

Then too, how does it address the Mortgage Crisis? I mean it seems that BUSINESS will get some TAX BREAKS, but what about the people who are facing the loss of their home? I mean let’s be honest here, these aren’t people living at the poverty level, these are Middle Class Taxpayers. Most are NOT SELF EMPLOYED, so TAX INCENTIVES TO BUSINESS means ZIP TO THEM. Odds are that their INCOME will PRECLUDE THEM from OBTAINING THE MAXIMUM REBATE, so just what good is this package?

The American economy is suffering from a collapse in its housing market, a severe credit crunch, rising unemployment and weak retail sales. Several U.S. investment banks have said the U.S. economy will head into recession this year or may already be in one. (CBC News Report)

If I was to get an $ 800 rebate, and had mounting credit card bills, chance of losing my home, I just don’t see myself rushing out to buy a new computer or car. I sure as hell wouldn’t rush out to buy a new television set, or chesterfield either. Then too, given how most of that stuff is made OVERSEAS, adding more purchases isn’t going to help me keep my Middle Class Job either.

Call me crazy, but if this CRISIS came about due to the COLLAPSE OF THE MORTGAGE INDUSTRY, perhaps the SOLUTION LIES THERE TOO? I mean would seem to me, that any STIMULUS PACKAGE should be addressing that issue, head on. Something needs to be done to STOP THE BLEEDING. I just don’t think REBATES & INCENTIVES is the solution.

But then I am not an Economist, I just work for a living.

Ian @ January 19, 2008