Some time around June of 2008, the US federal government will start mailing out tax rebates to US citizens. Unlike the previous rebate when only people that paid in taxes received the rebate, this time most Americans will receive the rebate, but they must file a tax return to get it. There are hundreds of thousands of people, especially senior citizens, that do not file tax returns anymore. Major tax preparation services like H&R Block are running advertisements trying to encourage these folks to file a 2007 income tax return so they will receive the federal tax rebate this summer.
It is still an open question as to whether this summers federal tax rebates will help the US economy avoid falling into a recession. However, these tax rebates that range anywhere from $300-$600 are a step in the right direction. The only problem I see with the US federal government mailing out these rebate checks is the fact that they will need to borrow the money to fund them. It is a crying shame that with more than a trillion dollars flowing into Washington D.C. each year that Congress and President Bush still find ways to spend more than that amount to run the federal government.
Most experts agree that the US economy is not only slowing down, but they also believe that a recession is on the horizon for later this year. One only needs to look at the ever rising price of crude oil or the astronomical price of gold to know that something is just not right in the US economy. Just today, the government announced a sharp drop off in the number of jobs created in the US and I personally think that this is just the first sign of worse things to come. The US capitalist system is fantastic when the economy is running fast and smooth. However, it can be very cruel when times turn to recession and sometimes depression.
So, if you want to receive a federal tax refund check - you must make sure and file a federal tax return before April 15th this year. While it has been difficult to find out if these tax rebate checks will be taxable and thus add to your 2008 income for tax purposes next year. The best strategy is to expect that these federal tax rebates will be treated as 2008 taxable income when you file taxes again in 2009. As a child I remember being taught that there was no such thing as a 'free lunch' at least in regards to the federal government. Any time the federal government gives anything away to it's citizens there are always strings involved in that gift and many times people wish in the end that these gifts with strings attached were never given in the first place.
Read more about the Economy:
Nervous Stock Market Climbs Wall Of Worry
Mortgage Crisis Going From Bad To Worse
Citibank In Bad Financial Condition
Oil Price $105 Per Barrel As Economy Slows
Rich Get Richer While Most People Suffer
March 07, 2008 Archives