Beginning in May, the U.S. Treasury Department will begin sending you (most likely) a check for somewhere between $300 and $1200. It’s the main component of the government’s plan to stimulate the sad economy by providing tax payers, particularly those in low and moderate income brackets, with a little extra cash.
The key words here are “most likely” and “little.”
The problem with “most likely” is that if you are claimed on someone else’s return as a dependent, you don’t get the rebate, even if you had taxable income in 2007. Since a person can be claimed as a dependent by, say, a parent who is paying for them to go to college (full-time students up to age 24), that may be a fair number of people on at CSUN. This is unfortunate because the person who claims you as a dependent doesn’t get any extra money for you either as long as you were over the age of 17 by the end of 2007.
Now let’s look at the word “little.”
I’m guessing that most people reading this article today are either broke college students or underpaid university staff and faculty, so your check, if you are even getting one, will be between $300 and $600. Whoopee!
Let’s see how that money can be used to stimulate the Northridge economy.
You could spring for a parking pass for the fall semester ($144) instead of trolling the side streets between Reseda Boulevard and Etiwanda/University Drive or praying that the parking police don’t cite you for parking on Nordhoff at 6:55 p.m.
That will leave the lower-income folks with $156. Now you have money for gas-a little over 43 gallons, assuming this week’s pump price of $3.59 per gallon. Let’s say your tank holds about 14 gallons; that’s three whole tanks of gas. Go ahead, get crazy and drive all the way out to Malibu for the weekend.
Do you feel stimulated yet?
Or you could spend it on books next semester. According to the CSUN Freshman Year Experience, books can cost up to $1,300 per year. Assuming a full course load is about five classes, with an average of two textbooks per class, that works out to about $130 per book. In my experience that’s a little overstated-most of the classes I’ve taken have required about $100 invested in textbooks or other required materials like clickers-so you might be able to pay for half of the books you need in the fall semester.
But you will probably be like most Americans who, according to a survey by American Century Investments, are more likely to use the money to pay off outstanding loans or credit card balances (36 percent) or save the money (25 percent).
It sounds like the responsible thing to do, but the government (and certainly the credit card companies charging interest rates of up to 33 percent) would prefer you Buy American.
That was the message from Indiana senator Bob Casey who said during a roundtable discussion of economic issues on the Indiana University of Pennsylvania campus in February, “Spend the money. We want them to spend the money as fast as possible,” adding that he “would hope if they’re spending it on goods and services, that they buy American.”
By the way, the word “rebate” is a bit of a misnomer. The checks being sent out are actually an advance on a one-time tax credit that will appear on returns filed in 2008. Good news – it will not be considered taxable income next year.
