[jeffkrol]

See your own OP for simple proven psychology.



That paper you reference was refering to the 2008 tax rebates, not the Obama "making work pay" credit that we are discussing. Like I said the windfall is better for low income people who need the help because it puts them on better financial footing. It is easier to exercise will power and make 1 good decision with a lot of money once a year than it is to do it every month with a small amount.

for many it's not willpower but a necessity..... and it will not put them on a better financial footing... and it is/was not a lot of money.

This kind of tax cut is great for someone like me (who doesn't really need it but will gladly accept it) because I am already a big saver, I already have my withholding cut to the bone so that I always have to send the IRS a check with my taxes. In fact, estimating my 2010 tax bill is on my to do list for this weekend to make sure I am not penalized for under withholding.

But for some people that tax rebate is there only form of savings because they spend money as fast as they can get their hands on it. It is so popular as a savings vehicle that they have a box on the W-4 to withhold an additional amount just to juice up that refund check.

At no interest to the saver... I do know plenty of people that do indeed use their tax rebates for once a year big ticket purchases (like a reliable car, family vacation) and is in fact one of the few ways they can actually save since something "always comes up" ie unexpected car repairs ect.. see you live in a insulated world apparently (or I live in a really poor town )where discretionary income is plentiful. Oh I know of a few (and mostly better off) people who triple mortgage to do things like put their kids through college, buy a swimming pool since they kids are on a swim team, and generally spend beyond their means... oddly enough you actually have to be better off to begin with then the people I'm generally talking about.
your reality is for some reason skewed on who spends what where and when...
not sure it's the media or your environment though..
The poor will always be with us, the spendthrifts as well, and the forever tightwads who think that their sacrifice is possible to all. Sometimes I just wonder if it's just anger.. "I suffer (usually needlessly for some imaginary catastrophe that affects maybe 10%, the who's children "spend down" to put papa in gov. paid for nursing home.) so why can't everyone else".

If the government was willing to have lower compliance rates with federal income taxes and stimulate the economy in the short term, they could exempt everyone from withholding and hope that they save enough to pay their tax bills. This would be a great stimulus approach that wouldn't require any new spending or tax cuts, although there realistically would be a lot of people with unpaid tax bills because they didn't prepare for it.

I have no problems paying taxes, I'm just tired of seeing it go to the wrong things.. mega wars/banks/oil/insurance co's and not "trickling down" except in Cancun or the Virgin Islands.......
Sooner or later we will pay big time for the social inequalities growing in this country. I'm hoping to avoid that here and now... No better time to fix a lot of things when the cars currently "in the shop"....
some say we can't afford to, some say we cannot afford not to... if the war spending wasn't thrown into the debt we'd be at least a bit less hostile......
Don't believe this can't happen here either....... the youth of today is pretty dis-enfranchised and it's not getting better.....
http://www.reuters.com/article/idUSTRE69J4HI20101020
http://docs.google.com/viewer?a=v&q=cache:Q0JKzfCWo60J:gwired.gwu.edu/hamfis...RZCvkmoAeOe6lA

---

Last edited by jeffkrol; 10-20-2010 at 11:54 AM.

[mikemike]

for many it's not willpower but a necessity..... and it will not put them on a better financial footing... and it is/was not a lot of money.

Spending an extra $35/month or going $1100 deeper into debt puts a person on better financial footing than paying down $800 in debt... ::shrugs:: We'll have to agree to disagree about this.

Bush tax credit of 2008:
$600 per individual earning up to $75,000
$1200 per married couple earning up to $150,000
$300 per child up to 17 you claim as a dependent
Received as a windfall
Bush Tax Rebate 2008

Making work pay tax credit (Obama tax cut):
$800 per individual earning up to $75,000
$1600 per married couple earning up to $150,00
$0 per child
Received as reduced withholding from your paycheck over the course of two years
Making Work Pay Tax Credit - New federal tax credit for working individuals

Which one is not a lot of money? The Bush tax credit or the Obama tax credit. They seem to be about the same amount to me.

---------- Post added 10-20-10 at 01:54 PM ----------

usually needlessly for some imaginary catastrophe

Because of where I live the threat of catastrophe is very real and I know I would much rather be able to afford to make a reservation at a hotel, evacuate, and have a roof over my head in the case of a hurricane than be stuck on the roof watching coast guard helicopters fly by wondering if they are going to rescue me and my family this time. You can call me a tightwad if you want to, it won't hurt my feelings but don't get upset if I say, "I told you so."

[Nesster]

While I appreciated the happy surprise of the Bush windfall, I also appreciate the trickle-in Obama one. But it isn't about me - or any individual - and how well or badly we've managed our finances. It is about the millions of us, in aggregate, and what we do with the money. Which approach plays well at the ballot box? Which approach puts money into the economy? Which one beefs up savings? etc. In the case of the Obama thing, money trickles into the economy through the year. In the case of a Bush style thing, there's no stimulus effect until after April 15 of 2011.

[JavaJoe]

Misleading yes and manipulative too! Also not an original idea, it's been done before,but lets let Jeff think that Barry came up with the best idea since sliced bread and really wants to help us regular folks. OK?

What's so innovative about sliced bread? It's been done since knives were invented. So someone thought to slice the bread before it's sold. Big deal. Let's not forget however that bread is the mother of the airplane. Now that's a big deal.

Just read about this in today's paper. Seems as though if your single like me you got back $400. Rather they didn't confiscate $400 of my money. So let's do a bit of math. $400 total spread over 52 weeks is $7.69 (rounded) per week. (No wonder I didn't notice it.) So here in NY it would buy me what? A pack of smokes if I am lucky?

---

Last edited by JavaJoe; 10-20-2010 at 12:51 PM.