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The Latest Stimulus Windfall: Tax Refunds Increase By 10% Even As Tax Withholdings Collapse To Decade Lows
It was just yesterday that we touched again on the topic of whether or not excess refunds are boosting consumer appetites for gadgets and other China imported items, keeping retail sales artificially high. It turns out that not only were we right in our assumptions, which in light of collapsing tax withholdings seemed to be counterintuitive, but that the White House is actually proud of this most recent non-recurring (which means it will stay with the US in perpetuity or until America files Chapter 7, whichever comes first) Keynesian travesty. The administration announced that as part of the stimulus package (what iteration are we on: 20? 100?) the average tax refund has increased by 10% or $260. Once again, seeing that tax withholdings are plummeting, this seems like the dumbest thing the Treasury can do. Which is precisely why it will continue doing it until America goes broke.
The massive U.S. economic Vice President Joe Biden and Treasury Secretary Timothy As President Barack Obama seeks to convince Americans he Republicans have criticized the Democratic president's $787
Yet more government subsidies, yet more gains for the 1% of the US population which holds the majority of listed stocks. On the other hand, the incremental tax refund will be barely sufficient for the majority of the morts to buy one half of the "must have" iPad.
stimulus plan is increasing average tax refunds by about $260,
or nearly 10 percent, the White House said on Monday.
Geithner will tout the refund news at an event in Washington on
Monday.
can ease their economic woes, the event is the first of a
series by administration officials stressing the benefits of
the Recovery Act stimulus plan before the April 15 tax filing
deadline.
billion economic stimulus plan, signed by Obama in February
2009, as a waste of money that has failed to help average
Americans.
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Once you come to grips with the notion that the economy/society-crushing policies they're pushing are being pushed and implemented for precisely those economy/society-crushing reasons the seemingly irrational and moronic acts of this Administration start to make a whole lot of sense.
Never let a good crisis go to waste, you know.
States and municipalities will chew up those refunds and more with sneak taxes.
Fed Tax revenues fall and the entitlement caravan moves on.
The equation is demanding more and more but all the upright monkeys are unwilling or unable to demand more.
The equation always wins in the end, Japan has been hiding from the results of the use of the equation for almost 20 years, at the end of the line the equation will win. There is no victory against the equation.
Slow death now folks.
The books never balance, the books have never balanced and never will, you have system that only last long as you supply it exponential growth. One problem with this, you would have to have unlimited power to sustain the equation.
As long as all the upright monkeys continue to use the same equation as a virus, well you are going to get the same result every time.... last time 100+ million viruses were wiped off the petri dish.
Infinite resources would do it. Until we get off earth, ain't gonna happen. And even if we could, the imbalances to the small rock from importing off world resources would be devastating.
I want to say mindful downsizing could save us, but really it can't right now.
You would need infinite ability to go along with infinite resources. You would have to be either God, God-like or even more powerful than God.
You have to supply the equation with exponential growth, saying hey there are some planets 100 light years from here that we can harvest from.
muahahah behavioral economics in action! low interest rates, weak currency, why save?
Every person should be pushing their state legislature to pass legislation to limit the total level of sales taxes and fees the government may charge for ANY service or good.
If your state allow constitutional referendums, then you should explore that avenue as well.
State taxes are going to be forced higher by all the new mandates coming from Washington. Last night's health care vote doomed most states budgets even more by the expansion of medicaid. (Zero hedge should put a poll up asking readers how long they think California has left before official insolvency.)
Its only a matter of time before politicians start enacting double digit state sales tax rates to pay for all this largess.
States should cancel their agreements with the Medicare. SS and Medicare are federal government programs running under the State's plan.
Cancel the agreements, bye-bye programs.
Let me save you some time and tell you the result of that plan: http://en.wikipedia.org/wiki/Atlanta_Campaign
There is no reason for war with the Feds at this time. SS and Medicare are federal programs run under the State's plan. This is how the Fed operates in the State, with agreement with the State. The State has granted the Federal government permission to come into the State.
Cancel the agreements.
Here is Michigans Public Law from 1939 that moves under the SSA.
http://www.legislature.mi.gov/%28S%282mbmtyqtikritq55hvkkcpjw%29%29/mile...
Don't forget the Wage Tax which isn't what most pretend it to be at Public Act 1 of 1936.
I still believe that a lot of people are fudging their taxes as payback for the last year of government theft. It would not surprise me if the administration tried to hide that fact to keep the trend from going mainstream. I mean, if the plebs think that "everyone is doing it", then there could be real trouble... BTW, adjust your witholding now... :)
nancy.
i don't like you.
Short term thinking no consideration for the long term damage. Politics as usual, move along.
This is probably why the market will keep soaring higher... it has become like Zimbabwe where the only way out is soaring inflation and money is worthless
Maybe a little more light on the subject of refunds. I have a 36 year old daughter who has an 18 year old son. Throughout 2008, she was constantly needing $ 200+ from me monthly to pay her bills. I would dutifully send her the money, even though I knew her income was enough to pay her bills even though it was tight. In November 2008, she called me and asked me to help her project the refund she would be getting when she filed her 2008 1040A.
I asked, What refund? She went on to explain to me that she chose not to claim any exemptions on her W-4 so she would have money at the end of the year, a kind of savings she added. (I tried to climb down the phone line to strangle the little bitch)
So, I said, you created a savings plan with the IRS. A plan that made it difficult for you to pay your bills. Therefore, you had to have me send to you the money you needed to live on so you could over pay the IRS.
She knew right then she had made a very big mistake. Not a mistake of overpaying her income taxes, but, a mistake of calling me.
Well, I said to her. Since you are getting a $2,700 refund from the IRS and, you will be claiming 5 exemptions on your 2009 W-4, giving you and additional $310 in monthly take home cash, you will not be needing any money from me for the 2009 calendar year.
Your are correct ZH that refunds are (or in the case of my daughter were) causing retail sales to be artificially high. The massive stimulus plan has little to do with it I believe.
I understand your plight, dog.
My 23 year old single daughter makes a very good salary and is perpetually broke. I used to joke that it cost me 500 bucks just to say hello to her on the phone. I do her taxes, know her income and now it's not so funny anymore.
I bought her a car. She drives it and puts gas in it. All other expense of ownership belongs to me.
I light novena candles every night praying a nice responsible guy with a good job marries her to get me out of this spot.
I wonder if other dads with daughters pray the same prayer.
are u kidding? your daughter has been conditioned by YOU to expect that. you are looking for a bailout from some other sap! why dont you just say NO to your daughter?? My parents cut me off after college. I was within $100 of being broke on for different occassions. But not once did i borrow from my parents.
Now, im fully secure, dont owe a cent, and certainly have no sympathy for anyone living beyond their means.
LET HER GROW UP.
having said that, please do not take personal offence to this post.
I was ACTUALLY gonna post requesting anyone to give me a link to any analysis about why this health care bill is full of crap. I know its been posted before, but if anyone has such an analysis at hand....?
Do you have any kids?
does it matter? is bailing out your child any different to bailing out the banks or over-leveraged consumers..? they are all someone's child.
I'll take that answer to mean no.
Let's take a look at your comment above.
Your parents' cut you off after college. That means while you were in college your parents covered your living expenses. To answer your last questions. Yes, it does matter. Yes, helping your children out is very different from bailing out banks.
Maybe you can shed some light on a situation I am in. Tell me if I am wrong to be doing what I am doing. My mother is dead. In 2006, my father developed Alzheimer's disease. His retirement pension and social security receipts did not provide enough cash to pay for 24 hour care. I had a choice, turn him over to the US government and let them do what they wanted with him, or, quit my $ 80,000/year job and begin taking care of him 24/7/365. My father does not know who I am. He has extreme psychosis and is incontinent.
When I was 23 years old I went to college, towing a wife and 4 year old daughter in hand. My father and mother provided all of the financing I needed to make it through the ordeal. After I graduated, they still plugged the hole in my wallet for a number of years, only it was called Christmas, birthday, etc.
Tell me Oso, should I have dumped my father because he could not afford to take care of himself? Bail him out so to speak. After all, he is 75 years old. Or should I have done what I did; pay him back for the chance he gave me by bailing me out when I needed it; like good kids do.
You are introducing an entirely different argument here. I responded to the post about grown children making enough/good money, yet living outside of their means and needing to be bailed out by parents. Followed by said parents complaining that they keep doing it.
but somehow you are introducing your disabled father who rightfully supported you THROUGH college ?? Not only is this an appeal to emotion/pity, but it isnt even the subject at hand!
I fully applaud your continued support of your familial units who are in need. But allowing your children to live outside of their means when they are fully capable of it, and then complaining, well.... sir, you should maybe re-evaluate.
It is not appeal to emotion or pity. There are probably 8 to 10 million people in this country going through what I am going through. I would bet for every 100 people who read ZH there are 20 whose parents' went through it with their parents. It is more reality than anything else. The other commenter was not complaining about his situation, nor was I. My comment was directed toward the post about where the spike in spending was coming from and how it got there. The other commenter was just pointing out that he had a daughter too that was making poor choices.
It is true that my comment to your comment was not following the same thread you began with. My comment to you was more along the line that helping a daughter is not a bailout similar to bailing out a banker who stole two or three hundred million dollars and is now bankrupt.
You have not answered my question though. I will ask it more clearly. What is the difference in helping my daughter, until I realized why she needed it, (and expounding on her foolishness at ZH) and helping my father who should have saved more for his future health care needs and now needs me to bail him out because he now lives beyond his means?
Discussing situations about one's children with other people who have children is not a form of complaining. It is an expression of frustration sometimes as well as pride sometimes.
I believe that your comment to Rainman was not necessarily directed at Rainman but was a general comment about parents who help children who do not deserve to be helped and then give reason's why they do it in a tone that suggests they are complaining. I agree with you, it is prevalent and it does not make any sense to someone who does not have any children.
My father did not help me "THROUGH college??" He help me beyond college.
Stop praying and post her photo, full-length of course!
(Just kidding. Now those $500 payments don't seem so bad, do they?)
I tried to climb down the phone line to strangle the little bitch
LOL, you wouldn't happen to be the star of 30 Rock, by chance???
"Our notion that our personal income taxes go to paying for our country’s infrastructure, social services, military, etc. is inaccurate, to say the least. Our personal income taxes first are collected by the US Treasury via the Internal Revenue Service, which sends the funds to the Federal Reserve, which is NOT a federal bank of any sort. The privately owned Federal Reserve, which is owned by the Rothschilds and, to a smaller extent, other banking families, then sends our tax dollars to its own Bank of England, which is located in the sovereign area of London called The City of London.
Interestingly, The City of London has its own laws, security forces and military, completely independent of the rest of London and the entire United Kingdom. It is considered the most elite banking and economic center in the western world.
The Bank of England, again, owned by the Rothschilds, sends our tax dollars to other central banks, all privately owned, and located in Europe.
Why do we even pay this illegal personal income tax, when our own government can operate without it?
Because our government borrows heavily from the Rothschilds and must pay interest on these loans. Our personal income tax offsets these interest payments. All usurious, of course. And all illegal."
http://thatsjustplumdumb.com/index.php/2010/01/the-u-s-personal-income-t...
If you start off the year making X, then you become unemployed or take a pay cut you could get a larger refund amount. This is because the payroll systems calculate the withholding amount under the assumption that your wage does not go down. In other words, too much was withheld last year because wages and employment went down.
Not really such good news. If you lose your job with payroll deductions, or change to a cash job in the black market, then you get a big chunk of the payroll tax deduction back at the end of the year, regardless of reduced withholdings...
Folks this is a one time event...my guess is that there was excess taxes w/held. You only bet back the taxes you pay in unless it' s a EIC. This depends on level of income. Stimulation has '0' to do with it. And the admin. claiming that is does is more 1984!
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