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Originally Posted by KMA-628
aliali -
First, income isn't related to it all. The first $18K for a family, $9K for an individual is tax-free; everyone gets this credit.
The current proposals seem to revolve around two different ways of handling this: rebate or prebate.
One proposal has a prebate being sent out at the beginning of each month. The rebate proposal shows the rebate amount being first applied to other payroll taxes (i.e. rocking chair, medicare) and the balance being paid back at the end of the year.
Does that answer your question?
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I'm starting to get it. The exemption is only on consumption. A family can spend 18k without federal tax, right?
Prebate doesn't seem to make much sense. Sending out checks all the time would breed fraud and you would never know how much to send (can't predict consumption) and what happens when someone dies, moves, goes into a coma, leaves the country for a semester, etc. Too much hard work.
If you have a rebate system, then lower wage people have to pay the tax and wait for a refund. The Gov't wouldn't know how much to refund unless a record of the consumption is provided.
Or does the country simply send out checks assuming the consumption levels to be 18k per family and give each family X% of 18k in monthly or yearly installments? If this in the case, are we really going to have the gov't send JFKerry and GWBush checks? Aren't there real fraud concerns here? How old to you have to be to get your check? Do you have to be a citizen? Do visitors get rebates? If not, what is this going to do to tourism? If you fly into any big city, you already pay extraordinary taxes on your hotel room and rental cars, does 20-odd% get added on top? Can you work overseas and get a check? What about servicemen stationed abroad? What about foreigners on student visas?
Since this will be the primary source of funds for the gov't, will there be a crackdown on compliance that will accompany the million and six different ways people try to get around this--in kind transfer, garage sales, ebay, etc.
What are the other economic implications of assuming a minimum level of consumption for all citizens and rebating a check in that amount to everyone: rich, poor, sick, healthy, monk, priest, new yorker, arkansan, old, young, family of 3, family of 13?