You’ve probably already heard this, but in case you haven’t (from the Courant):
With unprecedented speed and cooperation, Congress and the White House forged a deal Thursday to begin rushing tax rebates of $600 to $1,200 to most tax filers by spring, hoping they will spend the money just as quickly and jolt the ailing economy to life.[...]
Individual taxpayers would get up to $600 in rebates, working couples $1,200 and those with children an additional $300 per child under the agreement. In a key concession to Democrats, 35 million families who make at least $3,000 but don’t pay taxes would get $300 rebates.
The rebates would phase out gradually for individuals whose adjusted gross income exceeds $75,000 and for couples with incomes above $150,000. Contributions to IRA and 401(k) retirement accounts and health savings accounts would not count toward the income limit.[...]
If the Senate gives quick approval, the first rebate payments could begin going out in May and most people could have them by July, [Paulson] said.
I still say that you’ll see some combination of pay-down on debt and wasteful frittering away of the windfall, netting out to minimal impact to the economy, and that much of a higher hurdle for us to overcome on the budget deficit.
Meanwhile, I’m kind of curious about how income will be measured. For example, what about households that saw large catch-up payments arising from delayed Social Security disability awards?
3 responses so far ↓
1 Cahwyguy // 24 Jan 2008 at 9:33 pm
That’s not what I like the best. The LA Times (see my LJ post) is also reporting that:
Currently, the government’s mortgage guarantors, Fannie Mae and Freddie Mac, can purchase mortgages only up to $417,000, and funds have largely dried up for homeowners who want to refinance mortgages above that limit.
The legislation would temporarily raise that limit to $625,500, making it easier for banks to make loans to homeowners who owe more than $417,000 on their mortgage. It would also raise the limit on loans guaranteed by the Federal Housing Administration to $729,000.
Woo Hoo! Refi into conventional, baby!
As for your income question, the times also said:
Details were still being finalized but it appeared likely that the rebates — $300 to $600 per filer — would go to taxpayers who earn $75,000 a year or less. Couples who file jointly would receive as much as $1,200 as long as they earned less than a total of $150,000 a year. The size of the rebates would be phased out at income levels above those limits.
In addition, families eligible for the rebates would receive an additional $300 per child. Roughly 117 million households would get a check, the leaders said.
This is one time I’m glad I’m married and that my wife isn’t working. I think we’ll be under the $150K/year. But being able to go to a 30 yr fixed at rates that should (a) drop after this week’s fed action, and (b) won’t be jumbo will stimulate the economy even more.
2 MikeTheActuary // 24 Jan 2008 at 10:14 pm
Actually, my income question is more about “what income gets counted”. My wife won a five-year battle with Social Security last year, and I’m kind of curious as to how much of that (or of her SSDI checks) will count towards the cap.
3 Stimulus Effect of Rebate Checks Questioned // 29 Feb 2008 at 6:10 pm
[...] speculated previously about what the (non-)impact of the “economic stimulus” rebate checks might be this [...]