• Your Personal Tax Break

  Filed under Economy, Politics
  Feb 23

  The new stimulus bill is law and it is beginning to take effect. There has been a lot of talk about tax breaks for most Americans. Just what are they?

  Well, you will be pleased to know that Obama followed through on his campaign promise to cut taxes for a majority of Americans. To what extent? A massive $13 a week. No, I am not joking, this is completely serious. Your tax cut, and the tax cut for millions of people, is $13 less each week in taxes.

  So how do you plan on taking advantage of your new found wealth? Probably nothing. And that’s because 99% of Americans don’t budget so strictly that $13 is going to make a difference. Most people say they will spend $250-$300 a month on groceries for example. Or $50-$75 a month eating out. I know very, very, very few people who actually budget to the dollar and stick to it. You have to give yourself a little bit of a cushion.

  And the problem is this $13 a week adds up to $52 a month. Is this going to help with a mortgage payment? A car payment? A credit card payment? No, this isn’t going to help with any of the things Americans need help with. This is going to turn into an extra lunch or two at Taco Bell, a new video game or some other kind of discretionary spending.

  The idea is that it’s too little to save, too little to pay off debts, so people will just spend it on things that will actually boost the economy. Maybe so, but that means the spending bill isn’t actually helping people. It’s giving them a little more money to spend on a little more stuff they don’t need. Maybe the economy will get a boost from that, but I doubt a mere $13 a week per person is going to pull us out of a recession anytime soon. At least not while people’s homes are being foreclosed on and banks continue to be billions of dollars over in liabilities.

  Tagged as: Economy, Politics
  
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