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  • 2016-09-18 (xsd:date)
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  • $42.4 Billion Consumer Rebate Program (en)
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  • For over a year, unscrupulous financial sites (primarily the Oxford Club) have been trying to peddle costly memberships and newsletter subscriptions to consumers by deceptively touting that Congress recently passed a $42.4 billion consumer rebate program entitling taxpaying Americans to a cash rebate on every single purchase — a program that you, too, could cash in on ... if you paid $49 for a subscription to find out how: Such come-ons typically referenced a new or secret law that had been quietly enacted at the end of 2015: All of this was highly misleading. The referenced cash rebate program was actually a decade-old tax deduction provision that applied to a small minority of taxpayers and could not fairly be described as a program to provide consumers with cash rebates on nearly every purchase (at least not without stretching the definition of the word rebate to the breaking point. In general, the U.S. income tax code has long allowed taxpayers who itemize their federal income tax returns to deduct any state and local income taxes they pay during the year. However, some state and local governments don't impose income taxes on residents and instead fund their operations in other ways (such as higher sales or property taxes), so those who live in such states were disadvantaged by not having a federal tax deduction to offset what they paid to keep their local government services running. To make things a little more equitable, for ten years running Congress voted in an exception every year that allowed taxpayers to choose to deduct either state and local income taxes or state and local sales taxes on their federal returns. Finally, at the end of 2015, a bill was passed by Congress and signed by President Obama making this temporary yearly provision a permanent part of the law. So, the minority of taxpayers who live in one of the nine no-income tax states (Alaska, Florida, Nevada, New Hampshire South Dakota, Texas, Tennessee, Washington and Wyoming) and itemize their federal tax returns may see some benefit to this not-new-but-recently-permanent law, as may a few others (such as taxpayers who have relatively low incomes but made large taxable purchases during the course of a given year). But it's a tax deduction rather than a cash rebate program, and it affects only a small percentage of taxpayers and not every taxpaying American. As the Stock Gumshoe site summarized the issue: (en)
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