FYI: How the 2001 tax "rebates" actually worked.

[Junkdrawer]

Don't go scouring your old tax returns for a line that says "minus rebate check" or some such nonsense. It's not there. Here's how the 2001 rebate actually worked:

Dubya and Congress cut tax rates for the rich BIG TIME. They threw the middle class a bone: they cut the tax rate for the first $6000 of income ($12,000 for couples) from 15% to 10%. That works out to $300 for individuals and $600 for couples. But instead of simply changing the tax tables, they delayed the tax cut and sent out rebate checks instead.

The effect was that instead of your withholding going down by some tiny amount, you got the cut all at once and up front. This was done to make you feel that the massive tax cut for the rich was actually a bonus to you.

So who paid for that massive tax cut? Short answer: they raided the Social Security lock box. When the Boomers try to retire, they will find that the cupboard is bare. It's all actually more complicated than that, but that's the upshot.

What games will be played this time? Stay tuned...

[benld74]

1. You forgot they had to be included in THAT year taxes as Income

[Iwasthere]

2. BOTTOM LINE...

We had to pay 100% of the 2001 $$$ back in 2003. That message seems to be getting muddled

[Junkdrawer]

3. Yep. They delayed the tax cut for a year. So your withholdings were larger...

than they would have been otherwise.