$42 million here, $42 million there

and soon we’re talking real money or rather how much the IRS will spend informing taxpayers about their tax rebate checks. From AP

WASHINGTON – At a cost of nearly $42 million, the IRS wants you to know: Your check is almost in the mail.

The Internal Revenue Service is spending the money on letters to alert taxpayers to expect rebate checks as part of the economic stimulus plan.

The notices are going out this month to an estimated 130 million households who filed returns for the 2006 tax year, at a cost $41.8 million, IRS spokesman John Lipold confirmed.

That works out to about 32 cents to print, process and mail each letter. It doesn’t include the tab for another round of mailings planned for those who didn’t file tax returns last year but may still qualify for a rebate.

Democrats accused the Bush administration of wasting time and postage.

I do think it is a waste of money and Dr. Steven Taylor at Poliblog concurs

Stuff like this drives me crazy: there is absolutely no need whatsoever to do this. It is an utter waste of money.


Of course, I find the entire stimulus package to be a bit dubious and fiscally irresponsible.

The stimulus package to me seems like a political ploy that will do little for the economy. Other recent measures, like the Fed cutting interest rates are questionable. I seem to remember something in Economics 101 about you tighten money to fight inflation or when there are inflation worries. Right now there is fear of inflation, rising gas prices causing it, and the Federal Reserve is cutting rates. Anyone else think that is questionable?

Back to wasting money, large corporations have similar practices. Tenet Healthcare sends out notices to patients who are treated at their hospitals, saying their insurance has been billed. I’m sure they are going to bill the insurance, otherwise Tenet won’t get paid. So why waste money on sending out these letters?

Disclosure- I’m a former Tenet Healthcare employee.

Keith Hennessey, director of the president’s National Economic Council, said the letters are being sent to explain how the tax rebates will work.

How these rebates work has confused me from the start. The AP article doesn’t help.

For those people to get a rebate check, they will need to file a tax return if they received at least $3,000 from a combination of certain Social Security benefits, veterans benefits and earned income. The minimum payment for this group will be $300 for an individual and $600 for a couple filing jointly.

Not everyone will be eligible. Singles with income of more than $75,000 and couples with more than $150,000 get only partial rebates, if any.

People who earn less than $3,000, illegal immigrants and anyone who does not file a tax return will miss out. Singles with incomes exceeding $87,000 and couples with incomes exceeding $174,000 also won’t qualify, although those caps rise by $6,000 per child.

Read the parts in bold. Don’t they contradict themselves?

Update- The reporting is confusing. AP should have reported the caps immediately after saying the 75,000 and 150,000 ceilings for full rebates. As a commenter points out, the rebate has a sliding reduction till getting to 87,000 and 174,000.

Have fun with your rebates in May, whatever the total of it is.

Fun with maps
Mandatory helmets for pedestrians?