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$42 million here, $42 million there

and soon we're talking real money or rather how much the IRS will spend informing taxpayers about their tax rebate checks. From AP-

WASHINGTON - At a cost of nearly $42 million, the IRS wants you to know: Your check is almost in the mail. The Internal Revenue Service is spending the money on letters to alert taxpayers to expect rebate checks as part of the economic stimulus plan.

The notices are going out this month to an estimated 130 million households who filed returns for the 2006 tax year, at a cost $41.8 million, IRS spokesman John Lipold confirmed.

That works out to about 32 cents to print, process and mail each letter. It doesn't include the tab for another round of mailings planned for those who didn't file tax returns last year but may still qualify for a rebate.

Democrats accused the Bush administration of wasting time and postage.

I do think it is a waste of money and Dr. Steven Taylor at Poliblog concurs-

Stuff like this drives me crazy: there is absolutely no need whatsoever to do this. It is an utter waste of money.


Of course, I find the entire stimulus package to be a bit dubious and fiscally irresponsible.

The stimulus package to me seems like a political ploy that will do little for the economy. Other recent measures, like the Fed cutting interest rates are questionable. I seem to remember something in Economics 101 about you tighten money to fight inflation or when there are inflation worries. Right now there is fear of inflation, rising gas prices causing it, and the Federal Reserve is cutting rates. Anyone else think that is questionable?

Back to wasting money, large corporations have similar practices. Tenet Healthcare sends out notices to patients who are treated at their hospitals, saying their insurance has been billed. I'm sure they are going to bill the insurance, otherwise Tenet won't get paid. So why waste money on sending out these letters?

Disclosure- I'm a former Tenet Healthcare employee.

Keith Hennessey, director of the president's National Economic Council, said the letters are being sent to explain how the tax rebates will work.
How these rebates work has confused me from the start. The AP article doesn't help.
For those people to get a rebate check, they will need to file a tax return if they received at least $3,000 from a combination of certain Social Security benefits, veterans benefits and earned income. The minimum payment for this group will be $300 for an individual and $600 for a couple filing jointly.

Not everyone will be eligible. Singles with income of more than $75,000 and couples with more than $150,000 get only partial rebates, if any.

People who earn less than $3,000, illegal immigrants and anyone who does not file a tax return will miss out. Singles with incomes exceeding $87,000 and couples with incomes exceeding $174,000 also won't qualify, although those caps rise by $6,000 per child.

Read the parts in bold. Don't they contradict themselves?

Update- The reporting is confusing. AP should have reported the caps immediately after saying the 75,000 and 150,000 ceilings for full rebates. As a commenter points out, the rebate has a sliding reduction till getting to 87,000 and 174,000.

Have fun with your rebates in May, whatever the total of it is.


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Comments (5)

The two bolded sections don... (Below threshold)

The two bolded sections don't contradict each other. There is a sliding reduction of "payments" to those married who make over 150K AGI. For every $1000, there is a 5% reduction in the amount you would get....so those who make $160K AGI would bring home $600 ($10K ($160K - $150K) * 5% = 50%, $600 - $300 (50%) = $300). For some reason, the cap ends at 174K, instead of 170K, so maybe the $1000 granularity is a bit off.

Welcome to the Jorge Bush/J... (Below threshold)

Welcome to the Jorge Bush/Juan McAmnesty, "No Illegal Amigo Left Behind" economic plan, all you neo-cons, RINO's and related types!

Flood our nation with illegal labor provided by social security fraud committing, identity stealing illegal aliens, let every last substantial industry (manufacturing, engineering) that great nations need leave for China and Mexico in search of cheaper and cheaper labor, then let the dollar sink versus other currencies.

Great plan Jorge! And Juan McAmnesty says Americans need re-training, they need to go back to community college. LoL, you dumb-ass Juan. What about those who already have bachelor degrees and lost their jobs to Indians, Chinese, Filipinos, who have flooded the IT industry, pushing out many Americans and discouraging younger Americans from going into those fields?

You need more viagra Juan McAmnesty, you old skirt-chasing RINO bastard.

Think I'm a democrat? I can't stand those bastards either. A Marxist woman and the mixed-breed "foreigner" with a slight mooslim past, and hate for this country, which barely qualifies as "his" country.

Yeah, politics matter, doesn't it folks? What a frickin joke.

jwehman: I sure hope they ... (Below threshold)

jwehman: I sure hope they don't put algebraic equations in the letters. Our public school system has pretty much guaranteed that no one will understand it :)

"Democrats accused the Bush... (Below threshold)

"Democrats accused the Bush administration of wasting time and postage."

While I won't argue that it's a waste, why blame Bush? I doubt that the stimulus package contains any requirement that the IRS send such letters. That's IRS procedure, and the IRS doesn't let anyone dictate its procedures.

So, on the average, it cost... (Below threshold)

So, on the average, it costs each U.S. taxpayer 32 cents for 32 cents worth of work (ie. $42 million divided by 130 million taxpayers)? Silly to be sure but probably not earth-shaking in the world of Federal expenditures. I calculated once that, given my share of tax payments as a solid member of the middle class, each $1 billion Federal expenditure cost me $2.59. Therefore, while I make a 100% profit on the rebate, a Clinton or Obama presidency will cost me $130 to $200 a month over what I pay now. Now that's a travesty!






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