wow an extra

[Piecey]

Didn't read the whole thread but my coworkers and I decided we could use the extra $13 to get 2 $5 footlongs from Subway and a bag of chips.

Hey, thats lunch for 4 days! We were even singing the song.

 

[kydisneyfans]

But again, I still thing you have 2 types of people:

1.The person that is already putting money into the economy, and that extra $13 won't do anything.
2.The person who can't afford to put anything into the economy. Will that $13 allow them to start?

I'll never complain about a tax break. But I think calling this a "stimulus" and expecting that this is really going to help is just silly.

That is exactly right. I personally have a flat $20 a pay withheld from my paycheck since I don't want the government to have a year long tax free loan from me. My check will not change at all.

Why is it that the average family on food stamps receives more of a stimulus than those of us out working? It seems like many are being rewarded to stay home. This is not an employment stimulus at all, $13 a pay will do nothing in this economy.

 

[wvjules]

That is exactly right. I personally have a flat $20 a pay withheld from my paycheck since I don't want the government to have a year long tax free loan from me. My check will not change at all.

Why is it that the average family on food stamps receives more of a stimulus than those of us out working? It seems like many are being rewarded to stay home. This is not an employment stimulus at all, $13 a pay will do nothing in this economy.

You only pay $1040 in federal income taxes per year?

 

[minnie61650]

13.00 in our checks each week how is that going to help the economy....

If millions of persons increase their weekly spending by $10-$13 in my opinion
that will go a long way helping the ecomony.
I can see it helping with retail sales a lot.
Since it is not in one big check but spread out in a small weekly amount more people are likely spend it on day to day items instead of saving it.

JMHO

 

[DancingBear]

What most are forgetting about is the componding factor. It's not just $13 a week. It's $13 a week times most working people. That's a lot of money being put back into the econmy.

And it's just one component of a much larger plan.

 

[DancingBear]

But again, I still thing you have 2 types of people:

1.The person that is already putting money into the economy, and that extra $13 won't do anything.
2.The person who can't afford to put anything into the economy. Will that $13 allow them to start?

This makes no sense. What working person isn't "putting anything into the economy"? They aren't buying groceries, gas, paying rent or a mortgage?

 

[Luvmy4boys]

This means now everyone in my family can now order 2 items off the McDonald's Dollar Menu.

(It's a joke, ok?)

 

[minnie61650]

Anyone who actually "needs" a stimulus is not going to be helped one bit by a raise of $13 every two weeks for 8 months, .

FYI:


It is $13 aweek.NOT every two weeks.

Q: What are some of the tax breaks in the bill?

A: It includes Obama's signature "Making Work Pay" tax credit for 95 percent of workers, though negotiators agreed to trim the credit to $400 a year instead of $500 — or $800 for married couples, cut from Obama's original proposal of $1,000. It would begin showing up in most workers' paychecks in June as an extra $13 a week in take-home pay, falling to about $8 a week next January.
There is also a $70 billion, one-year fix for the alternative minimum tax. The fix would save some 20 million mainly upper-middle-income taxpayers about $2,000 in taxes for 2009.

http://news.yahoo.com/s/ap/20090211/ap_on_bi_ge/meltdown101_stimulus_plan_2

Lonk:

 

[minnie61650]

I wish they would give us back 50% of what they took from DH! We could really stimulate the economy with that. We would hire painters to come in and paint inside the entire house, new tile could be put in, and new carpet too. And we would do it all at once! We are talking about doing this, but I think we will be painting and maybe even putting in the tile our self. And it will be spread out over a long period of time.

I am unclear if DH even gets the $13. He makes over $71,000 or whatever that number is and I am a stay at home mom.

If you file a joint tax return then I think the less than $190,000 income a couple will apply to you so if your DH does not make more than
$140,000 than he should get the $13 a week.

 

[Dan Murphy]

Sounds like a good start to me, many dynamics and facets in this economy have to be dealt with simultaneously and with kid gloves to make it work and be lasting, worthwhile. A few dollars more in take home in but one small component of the overall........

http://online.wsj.com/article/SB123492172493705353.html

Don't Knock the Messenger: Bailout Has Good Points
By JAMES B. STEWART

Hasn't the Geithner bashing gotten a little out of hand?

True, last week's unveiling of the Obama administration's financial rescue did little to clarify the two big issues, which are how to handle the toxic assets on bank balance sheets and how to ease foreclosures and prop up real-estate prices. Not just conservative Republicans and pundits, but a wide swath of economists and even prominent Democrats piled on, seemingly eager to eviscerate someone whose tax problems and role in the previous administration's crisis management marked him as an easy target.

However satisfying as theater, Geithner bashing will do nothing to ease the crisis. I've noticed a conspicuous lack of alternative solutions being offered by Timothy Geithner's critics. And the more I've studied Mr. Geithner's remarks and Treasury's accompanying disclosures, the more unfair much of the criticism seems.

Surely by now it should be clear that with respect to the big issues, there are no easy answers, no "silver bullet." To hold Mr. Geithner responsible for failing to supply it is unreasonable. Working with former Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke, Mr. Geithner has been wrestling with these issues for many months.

The Treasury "Fact Sheet" which accompanied Mr. Geithner's remarks contained far more detail than his critics have acknowledged and is in fact quite comprehensive. Recognizing that a one-size-fits-all approach hasn't worked, the plan will pose a stress test to separate the healthy from weak and failing financial institutions. The test goes beyond what is used by the FDIC for banks, and will test the ability to lend in "a more severe decline in the economy than projected." This should produce a list of weak institutions that can be fortified before the next crisis.

Troubled institutions will have access to a "capital buffer" provided by the Treasury in return for convertible preferred shares that "they can convert into common equity if needed." This is a departure from the previous approach, which stopped short of taking equity stakes in institutions receiving taxpayer money. It sets the stage for government ownership of some institutions -- the "N" word that everyone seems determined to avoid using. But this doesn't mean wholesale nationalization of the banking industry. It recognizes that some institutions are so weak that the only effective measure is to wipe out their shareholders, replace management, liquidate them or recapitalize them and return them with healthy balance sheets to private ownership.

There's no easy way to get troubled assets off the books of institutions that own them, but the public-private investment fund deserves a try. The goal is to use public money "to leverage private capital," thereby boosting the impact of any taxpayer dollars while significantly increasing liquidity. If the market is functioning (which it hasn't been), even the worst of these assets will have a price. Institutions can sell if they wish, and if not, they can face the consequences of further write-downs and the option of the capital buffer. Admittedly, Mr. Geithner has been vague about how this will work.

The other big issue is housing, and Mr. Geithner failed to deliver the "comprehensive plan" many were hoping for. But clearly a central element is to "drive down overall mortgage rates." Some have criticized this as distorting the market for credit, and for providing benefits to people who don't need it. To me, that's a major virtue. Lower mortgage rates benefit all homeowners, not just those who recklessly borrowed more than they could afford or who speculated on ever-rising home prices.

I hope the plan explicitly extends to refinancings, which would put spending money into the pockets of millions of middle-class homeowners. To the extent that flooding the market for mortgages with government money distorts mortgage interest rates, there will be plenty of time to let market forces reassert once this crisis has passed.

Given this assessment, the market's pummeling of financial stocks seems as misguided as most of the Geithner bashing. As the Treasury itself emphasized, "Most banks have strong capital positions." I stand by my own stress test, which I developed last fall to identify the healthiest U.S. banks. I bought and continue to own stocks in four of those: Northern Trust, Bank of New York Mellon, SVB Financial, and UMB Financial. All have since declined, though not as much as most bank stocks, with the exception of SVB, which plunged to new lows. SVB has no real-estate exposure, but its primary markets in venture capital and private equity have been hard hit by the recession. Still, it remains solidly capitalized (it took TARP funds), and I recently added to my position.

As the Treasury approach recognizes, all banks aren't the same. I won't be losing any sleep that any of these will be nationalized, and when the crisis is finally over, they should emerge stronger than ever.

James B. Stewart, a columnist for SmartMoney magazine and SmartMoney.com, writes weekly about his personal investing strategy. Unlike Dow Jones reporters, he may have positions in the stocks he writes about. For his past columns, see: www.smartmoney.com/commonsense.

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

http://online.wsj.com/article/SB123492260467605495.html

By ARDEN DALE, VICTORIA E. KNIGHT and JILIAN MINCER

Consumers get spending money and a helping hand with some key expenses under President Obama's stimulus plan.

By far the biggest tax piece in the plan is the Making Work Pay tax credit. It would put a bit of cash into pockets, probably by having employers withhold less tax. Each eligible worker would get 6.2% of earned income up to a maximum credit of $400 ($800 for two-earner couples). So folks would see an extra $12 to $20 per weekly paycheck, depending on whether the government pays it out over six months or more.

Many taxpayers will get the Making Work Pay credit, though it isn't open to anyone who earns more than $95,000 ($190,000 for couples). Its slow-drip approach is likely to stimulate spending, according to some tax experts. In hard times, people tend to stash a larger windfall in a savings account, says Roberton Williams, senior fellow at the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute. An extra $20 each week, however, is more likely to get spent at the movies or on a piece of clothing.

First-time homebuyers also get a tax break under the plan. A credit would allow them to subtract $8,000 from the income tax they owe for 2009 for a principal residence purchased through Nov. 31, 2009. It phases out for individuals with adjusted gross income between $75,000 and $95,000 ($150,000 and $170,000 for joint filers). The credit is also available to taxpayers who haven't bought a home for the past three years. The homebuyer credit doesn't have to be repaid if the home isn't sold for at least 36 months.

Taxpayers also get help on the alternative minimum tax. The bill increases the AMT exemption to $46,700 for individuals (up from $46,200) in 2008, and $70,950 for married couples (up from $69,950.) Without the patch, 30.3 million taxpayers would owe AMT in 2009; with it, the number falls to 4.6 million, according to Mr. Williams.

People who lost a job will get help. The first $2,400 of unemployment tax compensation received during 2009 won't be subject to income tax under the plan; currently all unemployment payments are taxed.

Car buyers also get a break. A provision allows taxpayers to deduct from income tax the sales tax paid on a new car. The above-the-line deduction for state and local sales tax applies to new car purchases up to $49,500 from the date the stimulus is enacted through the end of 2009. Taxpayers who claim the existing itemized deduction for state and local sales taxes can't claim this new deduction. The deduction phases out for individuals with adjusted gross incomes between $125,000 and $135,000, and married couples filing jointly with AGI between $250,000 and $260,000.

Laid-off workers will be better able to afford health coverage because the bill slashes 65% from the cost of maintaining insurance through a former employer. Coverage would be subsidized for up to nine months.

Workers are already guaranteed the right to extend their job-related health coverage for up to 18 months under a federal law called the Consolidated Omnibus Budget Reconciliation Act, or Cobra. The law applies to companies with 20 or more workers that are continuing to offer a group health plan. The problem is, it's too expensive: about $370 a month for individual coverage and $1,000 a month for a family.

The 65% subsidy would lower the cost of Cobra premiums to about $130 a month for single coverage and $350 a month for a family, based on 2008 data from a survey by the Kaiser Family Foundation and the Health Research & Educational Trust.

To qualify, workers must have been laid off between Sept. 1, 2008, and Dec. 31, 2009. Participants must attest that their annual income in the year they receive the subsidy won't exceed $125,000 for single people or $250,000 for couples who file jointly. Workers laid off from September onwards who declined Cobra will get another chance to enroll.

An education-related item in the package is the American Opportunity education tax credit, replacing what's known as the Hope Credit. It would give a $2,500 partially refundable credit to cover each of four years of college.

Previously, taxpayers were given a nonrefundable credit of up to $1,800 for each of the first two years of college. The new credit would help people going to school, but not very quickly, because they couldn't collect it until filing a tax return in 2010.

The new credit only applies to 2009 and 2010; after 2010, the law reverts to the Hope credit unless the new credit is extended.

Families can use withdrawals from 529 college savings plans in 2009 and 2010 for computers and computer technology. Until now, families could use 529 money for computers only if colleges required students to have a computer.

Write to Arden Dale at arden.dale@dowjones.com and Jilian Mincer at jilian.mincer@dowjones.com

Copyright 2008 Dow Jones & Company, Inc. All Rights Reserved

 

[Zippa D Doodah]

My plan to is to add $50 per month to the amount I have automatically transferred from checking to a mutual fund account.

 

[kydisneyfans]

You only pay $1040 in federal income taxes per year?

Less than that thanks to George Bush.

 

[SteveInBrooklyn]

as soon as I see an extra amount in my paycheck I will increase my 457 plan and that is where it will go- so I spent the large one but if its in my paycheck that one will be saved LOL.

That's why tax cuts aren't the answer. Not tax cuts alone anyway. Government spending is the key. It can be targetted, and the entire amount will go to increasing GDP.

 

[wvjules]

Less than that thanks to George Bush.

Wow, so either you're super rich or super poor.

 

[bicker]

I think the point people are trying to make is they could do much more with a lump sum, as opposed to breaking it up into little tiny amounts.

The point other people made in response to that is that when people were given a lump sum, the last time, they saved it, instead of spent it.

 

[ols386]

The point other people made in response to that is that when people were given a lump sum, the last time, they saved it, instead of spent it.

I didn't save mine, I spent it. It was burning a hole in my pocket. I'm much more likely to spend a lump sum amount, rather than a few extra dollars a week in my paycheck.