Financial

Ok, well not yet anyway. The majority of taxpayers will begin receiving their checks in late May, after the IRS has had a chance to go over your tax return. Most taxpayers will receive $600 for individual filers, $1200 for taxpayers filing a joint return. You'll potentially receive an additional $300 per dependant child on your tax return. The checks are naturally geared toward the lower and middle classes...yeah, Congress is sure that you'll blow your check on consumer goods (read - crap). A cap will guarantee that the money won't go towards people who are more likely to save or invest that money (the wealthy).

Uncle Sam is hoping that you'll be patriotic and will spend it on home improvement, a new Ipod, or a trip (within the U.S. of course). Put a down payment on a new car and help out Detroit. This will provide an artificial boost in demand, creating jobs, pulling the economy up, and eventually replenishing the country's declining tax base.

The "unpatriotic" are telling you to not be so foolish. Put it in the bank, or use it to pay off debt they say. Rumors are flying around that the rebate check will have to be paid back out of next year's tax return. The way this guy on MSN makes it sound, you're borrowing from yourself and will get a smaller tax refund next year. That's bullshit. It's figured in when computing your refund for next year, sure, but it's free money now and you wouldn't get it next year if not for the bill passing a few days ago. People who paid no income tax this year will be able to get the benefit next year when they file their 2008 tax return.

Now, as for whether I think the rebate checks are going to work...it's unlikely to make that big of a difference. Consumer spending is slowing, and even a quick, easy dollar to spend may not change the underlying sentiment that hard times are here for the time being. Furthermore, and worse yet: this spending may trigger a nasty bout of inflation. Retailers and producers may decide that, in order to pay for the 70 cent increase in minimum wage that will go into effect July 24th, they can cash in on a hundred million taxpayers with money to blow by pushing prices sky high.