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Defiant
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WISCONSIN
Aug 1999
time: 05:32
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Tax refunds expected to jump 27%
By Barbara Hagenbaugh, USA TODAY
WASHINGTON — Taxpayers' refund checks will increase nearly 27% to an average $2,500 per family early next year, according to new forecasts from tax experts and economists, who say the windfalls will aid consumers, the economy and President Bush's re-election campaign.
As a result of the 2003 tax cut, about 8 million families who did not receive refunds this year will likely get them in 2004, says tax software publisher Petz Enterprises. It estimates refunds for the tax season will go to 108 million households vs. 100 million this year and will total $227 billion. That's up 38% from 2003. Merrill Lynch estimates total refunds from February through May will be up 34% from this year.
The Treasury Department estimates it will collect $100 billion less in taxes in the first half of 2004 than it would have without the tax cut. That reflects not only the higher refunds but also reduced tax payments by those who don't get refunds.
The refunds will fatten bank accounts and, if spent, boost the economy because consumer spending accounts for 70% of U.S. economic activity. That will help ensure that the economic gains underway do not fizzle out, and it will ultimately benefit the 9 million Americans who are out of work.
An improving economy would aid Bush's re-election hopes and blunt Democratic criticism of job losses and economic weakness during his tenure. But the cuts, along with increased federal spending, have contributed to a record federal budget deficit that is estimated to hit $494 billion this year.
"There is a real strong correlation between after-tax income growth and the share of the vote the incumbent party candidate gets," says Mark Vitner, senior economist at Wachovia Securities in Charlotte who has studied the historical links between economics and elections.
"The economy should actually help Bush," he says.
The larger refunds aren't an accident. Because the tax cut was passed midyear and was retroactive, taxpayers are entitled to more money to reflect their tax overpayments from the first half of 2003, unless they adjusted their withholding later in the year — something few likely did, says Craig Petz, head of marketing at Petz Enterprises, which publishes TaxBrain software.
The biggest winners, Petz says, will be the approximately 10 million married couples with a combined income of $46,700 to $56,800. Those couples dropped from the 27% bracket to the 15% bracket.
Other winners will include parents who had their first child in 2003. They will be eligible for a $1,000 credit. Married couples may also receive benefits.
With the job market improving, more consumers likely will feel comfortable spending their refund money rather than saving it or using it to pay off bills.
"There should be a pretty good propensity to spend," says Kathy Bostjancic, a senior economist with Merrill Lynch.
That spending will be on top of a spree consumers went on earlier this year. Not only did workers see their withholding taxes cut midyear, but $14 billion in child-tax-credit checks hit mailboxes right before the back-to-school shopping season. Both Merrill Lynch and Goldman Sachs figure consumers spent about three-quarters of that money, far more than anyone expected and much more than after the 2001 tax cuts.
The spending gain led to the biggest jump in economic activity in 19 years in the July-September quarter. The tax cut "clearly provided the boost the economy needed to get back on track," Treasury Secretary John Snow said in a speech Thursday.
Noting that retail sales growth has slipped recently, some economists have worried the initial tax cut boost is fading. But others argue the refunds next year will keep the party going.
"The people who think it (third-quarter growth) was a one-shot sugar high have another think coming," says Greg Valliere, managing director of Schwab Washington Research Group.
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chegitz guevara
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Ft. Lauderdale, FL Communist Party of Apolyton
Jun 2000
time: 00:32
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quote:
Originally posted by Defiant
Tax refunds expected to jump 27%
By Barbara Hagenbaugh, USA TODAY
WASHINGTON — Taxpayers' refund checks will increase nearly 27% to an average $2,500 per family early next year, |
You know how averages work, right? If I get $100 and you get zero, then between the two of us, we've each received an average of $50 per person. Isn't that great news? Given that the tax cuts were aimed at the very wealthy, most of us will be lucky to see much of an improvement.
This isn't good news. It just means that the national treasury, which is the property of you and me, will be further looted in the interests of George Bush's campaign contributers. Crony capitalism has come home to roost.
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Lord Merciless
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The leftist ideology is basically about screwing over the rich and keep the poor dependent of government.
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Lord Merciless
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This is not good news.
First Janus, then Putnam, Now Schwab. I got a feeling every major mutual fund companies are engaged in this kind of behavior.
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Lord Merciless
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Whether you put money in a bank, invest in some kind of securities, or buy a new car, the result is the same:
You put your money back into the economic system and someone is going to use your money to start a new endeavor. Whether that new endeavor will be successful depends on that someone's competence.
Do you really think that banks keep all their money in a vault? I really doubt it's more than 5%.
Someone working for Citicorp should really know that.
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Defiant
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WISCONSIN
Aug 1999
time: 05:32
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Che's Quote,
"I would note, however, that these tax cuts are really government loans, since we will have to pay off the resulting deficit sooner or later (with interest). Or shall we just let our children's generation pay for it?"
How about this note, business picks up, creates jobs, creates more taxpayers to help pay off the debt, also why does our FED gov't have to spend so much, lets take a detailed look at what they are spending it on, we all know there is mis-spending and knowing our gov't, probably a very high amount.
Cut costs, increase jobs, do not increases taxes, how about that for a motto.
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Lord Merciless
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quote:
Originally posted by chegitz guevara
I haven't worked there for over a year and a half. And just cuz the money goes into the bank doesn't mean it's being lent.
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Did you read my post at all? Of course banks have to keep some cash on hand just in case that some customers want to make withdrawals. But any person with at least a bit of economic wit knows it's foolish to let monies sit around uninvested.
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chegitz guevara
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Ft. Lauderdale, FL Communist Party of Apolyton
Jun 2000
time: 00:32
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quote:
Originally posted by Defiant
How about this note, business picks up, creates jobs, creates more taxpayers to help pay off the debt, also why does our FED gov't have to spend so much, lets take a detailed look at what they are spending it on, we all know there is mis-spending and knowing our gov't, probably a very high amount.
Cut costs, increase jobs, do not increases taxes, how about that for a motto. |
Damnit!!! Forum ate my post!!! 
The Laffer curve has long since been disproved. Contrary to Conservative myth, the last two tax increases preiods of growth in the economy were preceeded by the Reagan and Clinton tax increases.
As for tax cuts, well, Bush senior's was by a recession. So was Bush juniors. We haven't had enough time to see what the effect of the 2003 Tax cut will be, but we know the effect of the current deficit has been to stop the drop in interest rates. We aso know that the two previous quarters of masive growth were followed by two or more quarters each of lackluster growth. It remains to be seen how the economy will respond. There are many contradictory indications.
Now, it's true I like to see the president look like the idiot he is, but not at my own expense, nor at the expense of my fellow Americans. I will probably looking for a job next quarter, and a surging economy will be helpful, as opposed to the hell it's been to find work since this idiot has been President.
Last edited by chegitz guevara on 14-11-2003 at 23:23
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Cruddy
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The UK experience of tax cuts over many years has changed. To start with they were very popular. When people realized that the govt wasn't maintaining public services and was selling everything to the highest bidder, the public decided that the govt spending the money was the best bet.
Else what do we vote for? For politicians who manage nothing, just sell off govt run services?
I suspect the US experience will be similar, with people getting disillusioned about the idea.
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Lord Merciless
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quote:
Originally posted by chegitz guevara
It's also foolish to invest money willy-nilly. Just cuz you have the money to loan or invest doesn't mean you have a place to put it. Or would you rather we go through the S&L debacle all over again. That little wonder of deregulation only cost the country one trillion dollars! |
You are just twisting my arguments here. We talked about how reducing taxes would increase public spending and get economy going again. You *****ed about people putting money in banks and etc... Well, I appointed out that putting money in banks is also a way to spend the money, although indirectly.
So in that aspect, you were wrong. But instead of admitting you are wrong, you are digging out all kinds of stuff that have nothing to do with the core issue.
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Defiant
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WISCONSIN
Aug 1999
time: 05:32
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Now Che,
Even though you are a communitst, you are smarter than that, Bush walked into the White House in January of 2001 and the crap hit the fan in March 2001, if there is a President you want to blame, you really need to look at Slick Willy. The so called jobs he created, you know, the ones in the high tech sector that had the NASDAQ near 5000 before it crashed to 1300, yea, he had a nice legacy. In any event, we all know the President, Slick Willy or Bush have little to do with the economy, that is mostly business's and Greenspan.
"Now, it's true I like to see the president look like the idiot he is, but not at my own expense, nor at the expense of my fellow Americans. I will probably looking for a job next quarter, and a surging economy will be helpful, as opposed to the hell it's been to find work since this idiot has been President."
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14-11-2003 21:20
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