Obama's stimulus plan??

[taxmom34]

as information is being released regarding the Obama stimulus plan, it looks to me like there will not be the release of money from the IRS for taxpayers when they file their returns. so far as i understand what is being presented is the creation of a lot of jobs (which is good). what do you professionals think, and if no money coming (such as last years IRS monies) how do you think the general public will respond ?

[Jiggers]

FDR versus Obama's plan

Obama appears to be modeling his plan after FDR's during the depression. Create jobs.

Any jobs, building dams, roads, etc.

The unemployed were glad to have a job, no matter how hard, and no matter what was paid.

Things have changed.

The unemployed now will not work those type of jobs. There are many jobs available now, not the best, but they are jobs and they refuse to take them. They have lived on welfare for so long, and for so many generations, that they expect it now.

I hope that I am wrong, and I hope that he does well, but that is the way I see it.

They should not have sent out all that money last year. They should have reduced the tax rates and THOSE THAT PAY get the reduction.

They should not have bailed out AIG, Freddie Mac, Fannie Mae, and the automakers.

[JCH]

as information is being released regarding the Obama stimulus plan, it looks to me like there will not be the release of money from the IRS for taxpayers when they file their returns. so far as i understand what is being presented is the creation of a lot of jobs (which is good). what do you professionals think, and if no money coming (such as last years IRS monies) how do you think the general public will respond ?

Why are you trying to determine how the "general public" will react to a plan that hasn't been formally introduced yet? What are "last year's IRS monies"?

[taxmom34]

i read a lot of comments on turbo tax message board last year and people were upset with turbo tax because they were not getting the money they thought they should get from the IRS. and i believe that people reading "stimulus package" will be expecting a lot of money when they file their returns (like last year). even now, they are asking how much they will get and when will it take effect so they can file their tax returns as soon as it is enacted.
last year's monies being the $300 per person and young dependents

[JohnH]

It's very possible that Obama and the new Congress will repeat FDR's mistakes and prolong the rescession into a severe, extended depression by creating massive wasteful & inefficient public works projects. Roosevelt got bailed out of his economic debacle by World War II - hopefully that won't be the solution this time around.

[taxxcpa]

Pave our way to prosperity

The big infrastructure program Obama proposes will be an effort to pave our way to prosperity.
At least that beats bombing our way to prosperity with a third World War.

[JohnH]

Whether or not we find ourselves engaged in a third World War is probably a decision we won't make - it will be made for us by our adversaries. This is partly because much of the US prefers to remain in a state of denial rather than face the facts. We are content to whistle past the graveyard while the forces pushing events in that direction continue to pursue their objectives. Unlike the runup to WWII, when we enjoyed a 6-8 year breather, geography is not our ally this time around.

[JCH]

It's very possible that Obama and the new Congress will repeat FDR's mistakes and prolong the rescession into a severe, extended depression by creating massive wasteful & inefficient public works projects. Roosevelt got bailed out of his economic debacle by World War II - hopefully that won't be the solution this time around.

FDR had to cleanup the mess created by Hoover and his inaction. Obama and his administration will just have to work harder to fix the mess created by Bush and the damage he's done over the last eight years. FDR was elected to FOUR terms, and your views were shared by a small minority of people. It's the same reason Obama was elected, McCain is history, and progressive taxation will rule.

[David1980]

As far as tax prep, I expect everyone will ask "But what about the economic stimulus thing?" I mean I had people calling me up about Bush's plan before I even knew it existed. I just have to figure out a way to tell them "Sorry, they aren't doing it the same way this time" without causing a 10 minute rant from each customer.

[WhiteOleander]

FDR had to cleanup the mess created by Hoover and his inaction. Obama and his administration will just have to work harder to fix the mess created by Bush and the damage he's done over the last eight years. FDR was elected to FOUR terms, and your views were shared by a small minority of people. It's the same reason Obama was elected, McCain is history, and progressive taxation will rule.

Congress controls the economy of this country.
Presidents really have very little control over it.

[JohnH]

FDR had to cleanup the mess created by Hoover and his inaction. Obama and his administration will just have to work harder to fix the mess created by Bush and the damage he's done over the last eight years. FDR was elected to FOUR terms, and your views were shared by a small minority of people. It's the same reason Obama was elected, McCain is history, and progressive taxation will rule.

Yes, I'm aware that what you posted is the conventional wisdom on all points you mentioned. It's also incorrect on most counts, IMO.

Having said that, I do hope whatever actions Obama and his administration undertake will be successful, in spite of my misgivings. Heck, if he can be as successful as George Bush in giving us another 7 years without another terrorist attack on the homeland, I'll probably vote for him next time around.

[Jiggers]

Amen

Having said that, I do hope whatever actions Obama and his administration undertake will be successful, in spite of my misgivings. Heck, if he can be as successful as George Bush in giving us another 7 years without another terrorist attack on the homeland, I'll probably vote for him next time around.

I agree. I wish him well.

He will be our President on January 20th.

My pop taught me that our President IS our President, no matter what party. And I have always believed that. I don't have to vote for him or his re-election, but I support him when he needs support.

[veritas]

From WSJ

http://online.wsj.com/article/SB123111279694652423.html

[taxmandan]

http://online.wsj.com/article/SB123111279694652423.html

I'm waiting for word on what government programs he plans to eliminate to match these tax cuts. Oh wait, he's also going to spend $2 trillion on job creation. Miracle worker, that's our new president.

[Corduroy Frog]

Cowpie Hurling

It's easy to let this thing degenerate into a non-tax partisan hurling contest, but instead lets look at the potential effect on our industry.

Firstly, last year's stimulus was announced in February, and immediately I was barraged with questions I didn't know for about a week. I had customers with $4000 in tax refunds, but for some reason they were more concerned about a $600 stimulus payment. Last I heard was that the congress (Democrat controlled whether you like it or not) was NOT going to have a stimulus package ready by the January 20th inauguration, but is hoping to propose something to be ready by the middle of February (appx same as last year).

So if it happens, expect the same confusion along the same time-lines. One question I have is "Can it even possibly happen?" How can the government keep appropriating hundreds of billions they don't have? How much more good money are the Chinese and Japanese willing to throw after bad? If they quit, how can this much money be appropriated without raising interest rates? And since they can't afford to pay increased rates on the national debt, doesn't that mean they will have to print money??

All of the above points to "How is the govt going to pay with revenue they don't have?" They could move the marginal rate ceiling up to 90% and never pay out this kind of money.

One much more predictable outcome in our current mess is with State taxes. Almost three-fourths of them have balanced budgets written into their state constitutions, and we don't have any state-run currency in this country except for the U S Dollar, so the states can't play games with "funny money."

Expect the states to get tough. Really tough, with emphasis on higher taxes, new taxes, and more compliance measures.

Another thing we will "somewhat" notice. If there are jobs programs, much of the underground economy will disappear. There was a lot of criticism of FDR "make work" programs (one of them, the WPA, was called "we piddle around"), but it was better for the public than welfare, and the people did have to be on the job to get paid whether they got anything done or not. If a similar program is implemented, it will not be possible for someone to be both "on the job" and "working under the table" at the same time as they are drawing disability, unemployment, or welfare.

And the BIGGEST thing that will affect us? It's so simple it is almost miraculous it hasn't been discussed. A JOBS CREDIT. Every tax bill, increase or decrease, seems to have a noble and appealing title. In the 80s we had ERTA (economic recovery tax act) and TEFRA (tax equity and fiscal responsibility act). And likewise, every tax act claims to create jobs. But NONE of these has ever had a special deduction or credit for creating new jobs!!!! All of the noble claims were creating jobs only "indirectly" by tax breaks in other areas (notably capital gains more so than any other).

There was, briefly in the Carter administration, a "New jobs credit", the only time it has ever been tried, for 1978-9. But by 1980 this had been changed to a "Targeted" jobs credit where only the chronically unemployable (prisoners, handicapped, etc.) could qualify.

This time around there is talk about a real "jobs credit" again. Gross pay from employer W-3s would be compared to the same totals from a year ago, and if there is an increase, the employer would be entitled to a real credit. The credit would be recaptured if W-3 totals were not buoyant. I'm assuming this means shutting down a plant in Indiana and laying off 500 people because the plant was relocating to China would thus have its effect on that company's tax return.

This is a long post, and about topics that are not even in existence yet. Probably more effective to revisit these things after they are enacted, if indeed that happens.