Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next
Author: FBCinvestor Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: Re: Was the $600 tax rebait a loan? Date: 2/18/2002 6:03 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
The tax rebate from this past fall is a very confusing issue to understand. Since I deal directly with the topic, I hope this explanation simplifies things:

What really happened was that the first $10,000 of income ($20,000 for married) was to be taxed at 10% retroactive to Jan 1, 2001. But, since it was enacted in July, you had already been taxed at 15% on that first income. That is why they owed you $600 back -- the extra 5% you paid already that you no longer owed.

Rather than wait until you filed your tax return to get the refund, congress made a political move to send everyone a check, hoping they would spend it and boost the economy. I think all that did was confuse the issue. Especially for those who end up owing at the end of the year.

Some then ask, why didn't they just modify the tax tables so they took less out from July to December? Well, computer programming for a payroll package is pretty complex. Many still use hard-wired values for the number of tax brackets. While this makes it easy to change the percent and max values, it would require extra programming effort to add the new row. This would be a burden to software companies if they had a short deadline.

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Economic Implications of Cuba
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement