By 8 states. You gotta love that one!

from CNN:
Tax rebate could fatten a few state coffers
June 6, 2001 Posted: 2:44 PM EDT (1844 GMT)

DES MOINES, Iowa (AP) -- When taxpayers in Iowa and seven other states get their federal rebate checks this summer, they may have to turn around and give some of the money back to the government.

Eight state laws make the rebates subject to state income tax. The laws -- designed to give taxpayers a break -- let people deduct federal tax payments from their state tax liability. So when those payments go down, the liability goes up.

"I'm outraged by it, but I'm not surprised," said Oklahoma City taxpayer David Dank. "The whole state system is totally out of whack."

Oklahoma is one of the other states in question, as are Louisiana, Missouri, Montana, North Dakota, Oregon and Utah, according to the Federation of Tax Administrators. Alabama also was in that group, but thanks to a change made last year its residents won't be taxed on their federal rebates, state tax division director Richard Henninger said Wednesday.

Just how the states would get the money remains unclear.

In Iowa, where the taxpayer would have to pay $14.57 on the average federal rebate of $291, legislative leaders plan to discuss the issue this month during a special legislative session called previously to vote on a redistricting proposal.

Proponents of making the rebate tax-exempt in Iowa say they are simply trying to get more money back to consumers, the sort of economic stimulus envisioned by the tax rebates.

"By allowing people to keep this money, they'll likely spend it, giving Iowa businesses a $400 million shot in the arm," House Speaker Brent Siegrist said.

Iowa Gov. Tom Vilsack said he wants more study before deciding what to do.

Under the $1.35 billion tax cut package President Bush is getting ready to sign, single taxpayers will get a rebate on this year's taxes of up to $300, while couples will get a rebate of up to $600.

The money would help the coffers in the eight states, but that wasn't much consolation to some taxpayers.

"I've given it to them once. I don't think they should give it back to me and then tax me on it," said Kaye Lozier, a secretary from West Des Moines.

Rowena Alexander, who works at a Home Depot home improvement store in Kansas City, was expecting a full $300 rebate.

"It's supposed to be a gift, I would think," she said. "And now they're going to put a tax on it? But I'm not surprised. I figured there had to be a catch somewhere."

"It's not that big a deal," Des Moines secretary Joni Klaasen said of the $14.57 that would go to the state.

But multiply $14.57 by the number of taxpayers in Iowa _ officials estimate the state's taxpayers will get $404.9 million in rebates -- and the state could get a windfall of more than $20.2 million.

Paula Ross of the Oklahoma Tax Commission said the state income tax liability on an average federal rebate will be only about 2 percent or 3 percent.

To Judy Denwalt of Oklahoma City, "it would be minimal compared to the $300."

"I think along the lines of what it means for my children," Denwalt said. "I think it's going to help a lot."

Outside of Iowa, the issue hasn't gotten much attention.

"Maybe politicians are keeping quiet about it because they realize it is a revenue enhancement," said Jim Lopach, a political science professor at the University of Montana. "States were looking at surpluses, but now they're looking at restricted revenues."

Bob Adams, a spokesman for the conservative-leaning American Legislative Council, said he thinks people in some of the other states haven't caught on to what's happening.

"I don't think it's gotten up on the radar screen yet," Adams said.

Ed Renwick of the Loyola Institute of Politics in New Orleans said the effect on taxpayers would be so tiny it made no sense to fight about it.

"They're going to have a big political fight over $12? That's unbelievable," he said.

Some taxpayers just want the checks in the mail.

"I just want my rebate, and I don't care if it's taxed or not," said Des Moines lawyer Joseph Royce.

This had me in stitches:

"The surplus is the people's money," Bush said, "and we ought to trust them with that money."

Uhhh.....$300.00 over a year equals $5.77 a week. Gee, thanks.

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-Curt

"There ought to be limits to Freedom."

http://home.earthlink.net/~fiveofanatic/exmo.jpg

But Curt you forget our taxes are going to go down...until 2011 at least :P

What I am wondering HOW MUCH do I get. It says UP TO 300 dollars. Im thinking I will only get a buck fifty or something then.

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Manu Narayan

Yea he wanted to give you like $350 instead of $300. The best part of the bush tax plan is the Alternative Standard Tax i think its called that wasnt adjusted at all which is set at like 27% and 29% it kicks in for brackets when they start paying less than these percentages. I think something like 14 million families will lose all their benefits from the Bush tax cut to this secondary tax cirteria, which Bush didnt adjust, within a couple years. The best part is they are mostly middle class families making around like $40,000-$50,000 a year.

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"Convictions are more dangerous enemies of truth than lies." -Nietzsche

Again, that 300 rebate was the Dems brilliant idea.
Bush just wanted to cut rates and give several credits.

Posted by Curt:
Wanna "trust me" with my own damn money? Stop taking it. Income tax came about to raise $$ for WWII, here we are 60 years later, still paying it.

I applaud you! That is one of the most brilliant statements you have ever made!
Wow, am I sensing a little, just a tiny wee bit, of conservatism/libertarianism?
What, is the thought of moving to Conservative AZ getting to you already????


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Man — every man — is an end in himself, not the means to the ends of others. He must exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself. The pursuit of his own rational self-interest and of his own happiness is the highest moral purpose of his life.
Ayn Rand

It'd be pretty hard not to get the full amount; most everyone will. But $300 is a drop in the bucket, nothing more.

Wanna "trust me" with my own damn money? Stop taking it. Income tax came about to raise $$ for WWII, here we are 60 years later, still paying it.

Well in Bush's defense, he did want to give us more money.

But yeha 300 is a token gesture, but that 300 will be 300 dollars in 'stuff' I can buy.

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Manu Narayan

Originally posted by CGord:
Wanna "trust me" with my own damn money? Stop taking it. Income tax came about to raise $$ for WWII, here we are 60 years later, still paying it.

Actually, the income tax was ratified in 1913 under the 16th amendment. So, the money was already being sucked in by the Feds, even before we entered World War I in 1917.

I agree. Let me keep my own money and I'll decide how to spend it. Collect a national sales tax (at a reasonable rate) to replace and eliminate the income tax and all of the other federal tax gathering instruments.

Collect a national sales tax

I'd be in favor of that, vs. a flat tax idea. There would be loopholes, (like wholesale exempt stauts) but I do like the sound of it.

Heh! I am not easily fitted to either party in their current state. Libertarianism may suit me, but honestly, I have not dug into them deep enough to make a real decision. I'd say I'm socially liberal & fiscally conservative...which I believe was the stance of the Republican party at its inception. Even then, though, I don't always fit that description.