If you filed a federal tax return, Christmas may just come in June this year.
Sometime between May and July, depending on your social security number, you’ll be getting a gift from Congress and President Bush: a tax refund check for several hundred dollars, part of the economic stimulus package that was passed into law earlier this spring.
This was a bad idea. Not the idea of returning Americans’ tax dollars to them — in general, that makes worlds of sense — but the way it was done.
The whole notion was that, with a few hundred extra bucks, millions of Americans would go out and do what we do best: spend. If we buy more food, iPods, furniture or gasoline, we stimulate the economy and spur jobs at every level of the economy from retail clerks to mortgage brokers.
The problem occurs when that stimulus does not happen. Sure, some people spend a little more, but most plan to be responsible with their bonus checks.
According to a survey conducted by CCH, an online tax preparation service, 47 percent of Americans plan to pay down debt with the money, and 23 percent expect to put it into savings. This data matches what people actually did the last time tax rebate checks went out, in 2001.
I’ll be using my check to save up for this fall’s bill from CSU. Saving, paying down debt, and investing in education are the smartest and most responsible ways we can use a sudden windfall of cash.
President Bush and the Democratic Congress passed this stimulus package with the intent that we’d spend, spend, spend. In order to stimulate the economy the way they intended (at least in the short term), both Republicans and Democrats are encouraging us to be irresponsible.
Of course, that shouldn’t come as a surprise, because they were irresponsible themselves when they authorized these tax rebates. Sending out $150 billion in checks means that the federal government won’t have that money to pay for highways or the Iraq War or Social Security.
Instead, our rebate checks this summer mean that Uncle Sam will have to whip out the government credit card and add that $150 billion to the federal debt. Someday, perhaps decades from now, we, or our kids, will get around to paying off that debt — with interest.
Unfortunately, in an election year, politicians are all too eager to give us a short-term, feel-good measure, rather than something that will help in the long term.
If they were serious about strengthening the U.S. economy in the long-term, they’d permanently lower the tax burden on lower-income families (don’t confuse that with President Bush’s tax breaks for the richest few percent).
Instead, we’re discussing a “gas tax holiday” where the federal government drops the 18-cent-per-gallon tax on fuel during the summer months.
This one’s about as silly. In exchange for an average savings of $30 per person, it’ll briefly shift the economics of the gas industry toward higher gas consumption, increased profits for oil companies and greater reliance on the foreign oil that the same politicians rail against. Oh, and another $9 billion or so on the national debt.
But that’s the way Washington tends to work, and it usually nets politicians just enough votes from the gullible to get them through the next election.
So, when your check comes in the mail, you already know the most responsible way to use it.
On that count, you’re already miles ahead of many of our political leaders. Remember that when you go to vote in November.
Seth Anthony is a chemistry Ph.D. student. Letters and feedback can be sent to firstname.lastname@example.org.