Free money? If only it were true

As you struggle to prepare your '07 federal income tax return before the April 15 filing deadline, would it surprise you to learn that Congress and the Bush administration are spending $42 million to advise us that we'll soon be receiving "free" money from our beneficent federal government? No? Me neither.

Whenever politicians talk about federal funds, they always make it sound as if this money floats down from the heavens with no strings attached, and they imply that we should be grateful for their largesse. After all, what's better than "free" money? They sound like those sleazy payday loan center pitchmen on TV: "Come on in and get your free money, and a free Coke too." What a deal!

So I wasn't surprised to learn that President Bush and his allies in both major parties are spending $42 million of our hard-earned tax dollars to give us the good news about a tax rebate as part of an election year "economic stimulus plan." We're supposed to be eternally grateful to those who have made this rebate possible. But remember, the politicians are only returning a small portion of what we send to Washington to keep the government running, including the $275 million per day they're spending on a seemingly endless war in Iraq.

According to news reports, IRS is currently sending notices to taxpayers alerting them to expect rebate checks of between $300 and $600 per person. For taxpayers filing jointly, that could mean $1,200 plus $300 per child. Most taxpayers who earn at least $3,000, including Social Security and veterans' benefits, will receive rebate checks. But not everyone is overjoyed by this obvious political ploy.

"There are countless better uses for $42 million than a self-congratulatory mailer that gives the president a pat on the back for an idea that wasn't even his," said Sen. Charles Schumer, D-N.Y., arguing the IRS should instead spend the money to catch tax cheats. I don't often agree with the very liberal Sen. Schumer, but I do on this issue.

Speaking for the president, National Economic Council Director Keith Hennessy said the IRS letters are being sent out to explain the tax rebates. "Any time you do something as a government ... there is ample room for people to get confused," he said. No kidding. Think hanging chads in Florida. But does that mean we should spend $42 million taxpayer dollars to enlighten folks who don't know what to do with a rebate check? I don't think so.

The rebates are scheduled to go out in May, just after National Tax Day in late April, when American workers finally start earning money for themselves. Up until the end of April, you're working to pay your federal, state and local taxes. On average, you work approximately 80 days to pay your federal income taxes and another 40 days to pay state and local taxes. Think about it. So much for "free" money.


Therefore, be very skeptical when politicians brag about how much of our tax money they're going to send back to us in the form of rebates and political "pork." I cringe every time one of our elected representatives congratulates him or herself for securing federal funds for Nevada. Senate Majority Leader Harry Reid has obtained plenty of political pork for Nevada over the years, and I shouldn't complain. But I wonder how he feels about Sen. John McCain's, R-Ariz., proposal to clearly label pork projects and publicize those who sponsor them. Of course one politician's vital project is another's Bridge to Nowhere. Personally, I like McCain's proposal.

Those IRS letters will inform us that the Democrat-controlled Congress passed and President Bush signed into law a plan that will send rebate checks to most taxpayers, and that the rebates are the centerpiece of a $168 billion economic stimulus package. The bipartisan stimulus package is most welcome at a time when mortgage foreclosures are at an all-time high and gas costs nearly $4 per gallon.

But not everyone will be eligible for the rebate checks, including single taxpayers with annual incomes of more than $75,000 and couples earning more than $150,000. So those who pay most of the taxes will receive nothing in return, which isn't fair.

The IRS is already warning taxpayers to beware of identity theft scams tied to the rebates - people calling or e-mailing to ask for your Social Security and/or bank account numbers. While the purpose of the rebates is to stimulate an economy teetering on the brink of recession, some financial advisers are urging consumers to use the rebates to pay down debts or to build up emergency savings funds. Most Americans won't save their checks, however; they'll spend them on "necessities" like monster TVs and fancy cell phones that play the Star Spangled Banner.

God Bless America.

Excuse me if I'm cynical about tax rebate checks in an election year but I've been observing politicians for most of my adult life, and it often turns out that when they talk about serving the taxpayers who pay their salaries, they're actually feathering their own comfortable nests in Washington, D.C. Unfortunately, political life is like that in our great democracy.

•Guy W. Farmer, a semi-retired journalist and former U.S. diplomat, resides in Carson City.


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