January
31, 2008
SENATE ACTION WILL NOT DELAY REBATES ONE DAY
By Robert Greenstein
The facts are clear: Senate action on the
stimulus package will not delay the rebates by a single day.
- The earliest that the IRS can begin
to send out rebates is mid-May. No matter how fast Congress enacts the
stimulus package, the IRS cannot start issuing the rebates any sooner because it
must first process the 2007 tax returns.
- The IRS needs 60 days after enactment
to reprogram its computers for the rebates.[1]
- This means that if Congress enacts
stimulus legislation anytime between now and mid-March, the rebates will start
to go out in mid-May. If stimulus legislation still isn’t enacted by mid-March,
then every day Congress takes after that to finish the legislation will
push the rebates back one day.
As a result, current Senate deliberations
on the stimulus package are causing no delay whatsoever in the timing of the
rebate checks.
In fact, the stimulus package the Senate
Finance Committee approved yesterday would accelerate the delivery of
stimulus rather than retard it, because it includes extended unemployment
benefits. Those benefits could begin reaching unemployed workers and being
injected into the economy in 30 days — i.e., by mid-March, some two months
before the first rebate checks would go out.
Put simply, criticism of the Senate for
delaying stimulus makes little sense and is based on a misunderstanding of the
timing of the rebates. The Senate is not delaying the rebates, and it is
considering measures that would inject stimulus into the economy more quickly.
End Notes:
[1] The Joint Tax
Committee explained these issues in its background report on economic
stimulus: Joint Committee on Taxation, “Overview of Past Tax Legislation
Providing Fiscal Stimulus and Issues in Designing and Delivering a Cash
Rebate to Individuals,” JCX-4-08, January 21, 2008,
http://www.house.gov/jct/x-4-08.pdf.
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