It looks like we’re going to be getting some of our hard earned money back from the government (subscription):
With unprecedented speed and cooperation, Congress and the White House forged a deal Thursday to begin rushing tax rebates of $600 to $1,200 to most tax filers by spring, hoping they will spend the money just as quickly and jolt the ailing economy to life.
Rebates would be even higher for families with children.
The one-time tax rebates are at the center of a hard-won agreement to pump about $150 billion into the economy this year and perhaps stave off the first recession since 2001. House Speaker Nancy Pelosi, Republican leader John Boehner and Treasury Secretary Henry Paulson worked out the details in negotiations that stretched into Wednesday night at the Capitol.
About two-thirds of the tax relief would go out in rebate checks to 117 million families beginning in May. Businesses would get $50 billion in incentives to invest in new plants and equipment.
The premise behind this is simple. We’ve given people back their money before and had good results. People choosing how to spend their hard earned money, not bigger government, is what can stimulate the economy. So, if we know this, why are Democrats so eager to let the Bush tax cuts sunset in 2011? Instead, they ought to make the tax cuts permanent and sunset government spending.