RightWave

So, the IRS is going to give you a $600 check (or $1,200 if you’re married) in the form of a “tax rebate.”  Sounds great, right?

 Well, never mind the calculation you did in your head if you’re like me of how much it cost to mail out the notices letting you know you’re getting a refund.

 And, never mind the fact that a long-term tax cut would have a much more significant effect on the strength of the economy.  Or even put aside the fact that this is really just an advance on your 2008 tax return not found money.

What really is perplexing is this article:  Tax Rebates Could Be Ticket to Vacation

And mostly this passage:

Morse cites a November study by three economists from the Federal Reserve Bank, the University of Nevada-Reno and the University of Pennsylvania’s Wharton School examining consumer habits from a similar though smaller rebate in 2001. The researchers tracked activity of 75,000 credit card accounts.

The study found that many consumers used the rebates to pay down credit card debt, just as pre-rebate surveys suggested they would do. But three to nine months later, they used their newly freed-up credit to buy even more. On average, they spent 40 percent more than the original amount of their rebate.

…cuz that’s what we need. MORE credit card debt.  I know it sounds like it’s good for the economy for people to spend more, but isn’t this a pretty shaky foundation?

(by the way, I’ve been to Dollywood in Pigeon Forge, and they don’t need tax rebates to spur their attendance!  Didn’t you see Dolly on American Idol last week?)

Why don’t we just do the right thing and continue cutting marginal tax rates.  Better for the economy, better for the reduction in the growth of government and, well, just better for taxpayers.  Oh well.  Maybe next time.