The Ranger Online

Issue date: 4/11/08 Section: News

For struggling college students, a little extra cash couldn't hurt to pay down student loans, buy that new laptop or take a much-needed vacation.

This year there is incentive to file a federal income tax return by the deadline Tuesday.

All those who file their federal income tax for the 2007 tax year, have a valid Social Security number and earned at least $3,000 in income will receive an economic stimulus rebate check set to hit mailboxes in May.

Those eligible will receive $300 to $600 for individuals who earned up to $75,000 and $600 to $1,200 for couples who earned up to $150,000. In addition to the base rebate, families with children will receive an additional $300 for each child.

Those who can be claimed as a dependent are not eligible to receive the rebate.

The stimulus plan evolved through the House of Representatives in January, was passed in the Senate with few revisions on Feb. 7 and signed into law Feb. 13 by the president.

"It's neat because it got out so soon. Most people think that fiscal stimulus takes too long, but they did this in one month and the checks will be out in May," economics Chair Bruce Norton said.

House speaker Nancy Pelosi, D-Calif., described the plan as "timely, targeted and temporary" during a capital news conference in January as reported by CNN.

"First and foremost, the stimulus package will put money in the hands of hard-working Americans," she said. "This is a middle class initiative to strengthen the middle-class and those who aspire to be in the middle class . … We need to put money in the hands of those who will spend it right away to inject demand into the economy, to help create jobs, to help turn around the economy."

The idea is to target lower-income families that will reliably spend their checks, Norton explained.

The plan is estimated to send rebates to more than 130 million households putting nearly $168 billion back into the pockets of taxpayers, according to the Los Angeles Times.

President Bush deemed it "a powerful and effective way to help taxpayers and businesses" allowing more people to keep and spend their own money, he said during the January news conference.

The plan will also allow tax breaks to small businesses as they invest in new capital and property, which will produce incentives to create more jobs.

In addition, the plan will increase loan amounts for the Federal Housing Administration's single-family program in an effort to allow homeowners to refinance, stay in their homes and avoid foreclosure.

According to the Congressional Budget Office Cost Estimate, direct spending will increase by $38 billion in 2008 and $42 billion over the 2008-2009 period.

Although the plan will indefinitely increase consumer spending in an immediate way, it also will greatly increase the federal deficit.

The bill will ultimately increase the budget deficits to $152 billion in 2008 and by a net amount of $124 billion over the 2008-2018 period.

Norton believes that to relieve the deficit, tax increases could be in the near future.

President Bush is seeking to sustain tax cuts scheduled to expire in 2010, while presidential hopefuls Sen. Hillary Clinton, D-N.Y., and Barack Obama, D-Ill., seek to raise the tax bracket from 35 percent to 39 percent for those who make more than $300,000, Norton said.

"It is still not enough to make the deficit go away," Norton said. "It seems that we need both to cut taxes to increase consumer spending and cut interest rates in the Federal Reserve."

For more information on the economic stimulus package go to http://www.irs.gov/index.html.

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