President Bush’s proposed tax rebates send the wrong message in my opinion to the American people. The rebates stop if you earn a certain amount of income which might be fine, but the purpose of the rebates is to get people to spend money. Americans already have a negative savings rate and this tax rebate (if it is to work as designed) sends the message that people who get it should spend the money instead of save it. Those who earn less money already have a hard time saving money; something should be done to encourage people to save and use credit wisely.
This poor plan didn’t seem to go over with Wall Street as it is doing too little to late. I think it is a complete waste of $185 billion dollars that our government doesn’t have anyway. While I don’t have a fix for this recession, getting those that can’t afford to spend more money to spend money by giving them a rebate is not helping anyone. This is completely politically motivated and unfortunately, those that fall for it and think that it is going to help, just don’t know any better.
While I’m not a fan of Mike Huckabee, his tax plan is interesting in that it taxes what you spend thereby (in a little way) encouraging people to save. We need more saving and less spending.