Now that it is official and you may be elligibe to recieve a check from Uncle Sam, there leaves one simple economics question. Where is the money coming from? Remember the key phrase, "There is no such thing as a free lunch." Someone has to pay for it at the end of the day. That somebody is of course us. We pay the federal government income taxes every paycheck we recieve and around April we file our taxes and sometimes get a return.
Now how does the Bush stimulus plan affect this scenario and will you end up eating on the long run? Let's assume you belong to the middle income bracket that makes less than $75 per person or less than $150 per couple; you will be entitled to $600 per person. So a married couple without children will recieve $1200 and then add $300 per dependent child. For some of you out there that means you will be seeing a $1500 check for example.
Here's the catch though! When you do file this April your earning for the prior year and your accountant informs you that you are "elligible" for $3000 in rebate, stop yourself and remember that you will need to subtract the $1500 because the government will only send you $1500 (the difference). Think of the stimulus plan as an advance of your normal rebate check.
What if the government gave you to much though? No worries you personally won't have to eat it. "If you received more than what you should have gotten, you will not be penalized,"said Treasury spokesman Andrew DeSouza. "If you were supposed to receive a larger payment than you did, you will get the extra money."
Most people were under the false impression that the stimulus plan was extra money but it is just a mere advance of what you will get this April. Surprise, Surprise, President Bush sure knows how to spin a story.
