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Compugasm · Jan 22, 2008, 03:05 am

Tax cuts or incentives are preferrable to rebates. The idea is, a tax cut encourages saving. Over time, you get more money "in your pocket" through a tax cut. Because it is a permanent benefit you receive every year. An incentive is... well, doing something and getting the reward for the effort.

A rebate is a handout to promote spending. The idea there, is simply to drive up demand for goods (through consumption). It does very little as a long term solution to an empty wallet. A rebate is like a loan, which the government gets back at the end of the year through taxation. Example, as the $1000 you spent passes from hand to hand, each entity which received a portion of those dollars, is taxed. Rebates do not create new jobs or lower prices.

Example, If we get a rebate in 2009, news stories will report the best Christmas season ever, because people will spend the rebate on crap. But that doesn't mean the economy has grown. The "growth" there, is just a spending increased. Does that make sense?

Jan 22, 2008, 03:05 am	#2 (permalink) (top)
Compugasm Son of X51 Location: San Diego Posts: 3,780	Tax cuts or incentives are preferrable to rebates. The idea is, a tax cut encourages saving. Over time, you get more money "in your pocket" through a tax cut. Because it is a permanent benefit you receive every year. An incentive is... well, doing something and getting the reward for the effort. A rebate is a handout to promote spending. The idea there, is simply to drive up demand for goods (through consumption). It does very little as a long term solution to an empty wallet. A rebate is like a loan, which the government gets back at the end of the year through taxation. Example, as the $1000 you spent passes from hand to hand, each entity which received a portion of those dollars, is taxed. Rebates do not create new jobs or lower prices. Example, If we get a rebate in 2009, news stories will report the best Christmas season ever, because people will spend the rebate on crap. But that doesn't mean the economy has grown. The "growth" there, is just a spending increased. Does that make sense? Death to Videodrome! Long live The New flesh! Last edited by Compugasm; Jan 22, 2008 at 04:00 am.