Don’t move — rebate on the way

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Fri., Jun. 8, 2001

Don’t move — rebate on the way

In a scheme loaded with quirks, here’s the quirkiest thing about the federal government’s great tax rebate plan: If you’ve moved since filing your 2000 tax return and haven’t filed a change of address, you will not get a rebate. If you’ve died since filing your return, you will.

Of course, unless your survivors have a sense of the macabre and a talent for taxidermy, death is often accompanied by a change of address.

No matter. It’s just one of the things that provides evidence that the great tax rebate plan is a dumb idea. It was a dumb idea when Pennsylvania did it, and it’s an even dumber idea now that the federal government is giving it a shot.

Sure, who wouldn’t like to go to the mailbox in the dead of summer and find a government check for $300 or $500 or $600 — free money to pump into the increasingly moribund economy. You’re probably already dreaming up ways to spend that cash — a weekend at the shore, a shopping spree in Hunt Valley, a new toy.

How can it be bad?

Here in Pennsylvania, we know. We’ve had experience with this kind of scheme. Remember? The best word to describe the great Pennsylvania tax rebate plan is “fiasco.” The rebate was supposed to be $100, but in reality, it turned out to be more like $60 after you paid federal income taxes on the money. Stories of screw-ups were abundant.

If the government of a state of 12.3 million people can’t run a rebate program without messing up, how can we expect the government of a nation of 284 million to run such a scheme smoothly?

Especially a government with a track record like our federal government. Just the other day, the Pentagon agency charged with exposing fraud was accused of falsifying documents to cover up fraud. Look up “irony” in the dictionary, and this is the definition.

The way the Internal Revenue Service plans to distribute the rebates contains loads of opportunities for messing up. First, the IRS will send you a letter telling you that you’re eligible for a rebate. Then, the agency will send you a form that you have to fill out and file. And then, you get your check. Every step of the way is a chance for things to go awry.

Just the fact that dead people will get checks and people who moved will not illustrates what’s wrong with this potential debacle. It would have been much easier and more efficient to offer tax relief by lowering the amount that employers withhold from paychecks. The tax break would be gradual and wouldn’t make the kind of splash that a rebate check would. But lowering withholding would virtually eliminate mistakes or fraud.

That aside, the rebate scheme is also bad public policy. The $70 billion in tax cuts would serve a greater good if they were targeted — perhaps offer working families addition assistance with child care or health insurance, or provide adequate prescription drug plans for the elderly, or boost spending for our schools.

That way, the money would stimulate the economy while also serving a higher purpose.

As it is, public policy and prudent governing are not driving the great rebate plan. The power behind the scheme? Politics.

The White House gets some mileage out of sending checks to every American who pays taxes, handing out free money, Christmas in July.

But as the wise among us know, nothing is truly free. And the great tax rebate certainly falls into that category.

http://www.ydr.com/opinion/1edit1.shtml

-- Martin Thompson (mthom1927@aol.com), June 08, 2001


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