by J David Childs

Created on: March 09, 2009

It is public knowledge that in the year 2008, the federal government received $1.2 trillion (T) in tax revenue from individuals. It is also public knowledge that in 2008, the rebate stimulus package totaled $168 billion (B). Formulas determined the amount rebated to individuals, couples without children, couples with children, low-income persons, and veterans. The result was pocket change for most taxpayers. As designed, and what pocket change is, it was intended to be spent on consumables.

Through the well meaning, but politically motivated concerns of our elected representatives, and their lack of forethought and consideration that the downward turn of events around the globe was real and catastrophic, the tax payers were offered pocket change. This kind of rebate does not sustain a market-driven economy, much less be the driving force behind economic recovery from a recession.

So why consider another rebate when one looks at empirical data, revealing the short-lived impact, if any, on taxpayers' behaviors as unchanged? You shouldn't.

A tax rebate should not be considered unless perspectives are changed. The individual typically thinks of a rebate as some small amount of return for a payment rendered. So, as taxpayers pay income taxes, a rebate of the magnitude that is required to stimulate this economy should be of the value more in the range of current thinking and of which its dissemination is up for debate. Since federal tax revenue from individuals was $1.2T in 2008 and the great minds in Washington are considering a stimulus package of $600B to $700B, half of last year's tax revenue from individuals, the Fed should rebate the $600B to the taxpayers, assuming 2008 tax revenue from individuals is similar.

Please consider recent history for a moment before we return to the future.

The Fed (and the rest of us) has seen the behaviors of the banks when given $300B without accountability or regulations (what were our politicians thinking!). Many banks and lending institutions kept the funds to improve balance sheets, reward executives' failures, or some combination of the two.

As we look into the crystal ball, we consider that bailouts to other companies and industries only prolong the recession because the attempts are surgically specific and do not empower the taxpayers who fuel the market economy that we have come to enjoy. We can enjoy our economy once again, when the power, both democratically and economically, are given to the taxpayer.

Taxpayers are consumers.

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