Tuesday, January 29, 2008

Many taxpayers fail to understand our tax system

I have heard a lot of Democrats saying that it is ok to issue rebate checks to low income families because those low income families pay payroll taxes. It may be ok to do that; however, it is NOT a rebate check if that family already gets back more from the Federal Government then they paid into the system.

I am going to illustrate this with some undeniable facts on a sample tax return that I will post later.

It is true that the members of these low income families with earned income do pay payroll taxes; however, the very low income families I am referring to in my last post that were included at the last minute by the Democrats in the Economic Stimulus Package get paid back more from the Government through the earned income tax credit then they ever paid into the system.

These families end up getting all of the money withheld from their paychecks back and they then get back as much as $4716 with the Earned Income tax credit. In the cases I am discussing those taxpayers get more back in Earned Income Tax Credit then they paid in payroll taxes...

I think it is ok that people want to issue those rebate checks; I just want to make sure that the readers of this blog understand that in those circumstances it is not a rebate check. A rebate check is what you get when you paid something in and have it rebate to you.

Mike Sylvester

1 comment:

Tim Zank said...

Rebate checks to taxpayers is a colossal waste of time and money.

Rebate checks to poor people that don't even pay taxes is called welfare, and I think we already have a program in place for that, don't we?

sheesh