Cash for Clunkers is so Summer 2009. But the government’s not done dishing out major rebates to stimulate consumer spending.
What’s next on the list? $300 million worth of rebates on dishwashers, refrigerators and washing machines. That’s right, the Maytag Man is back in business.
The choice to include rebates for these specific household appliances is largely based on the fact that sales of the big three are down a collective 25% compared to figures from the last U.S. housing boom.
While the appliance program (part of the Obama administration’s American Recovery and Reinvestment Act) resembles cash for clunkers in the sense that it rewards consumers for spending money on major purchases, Consumer Reports claims there are several differences. Among them:
- Consumers may be entitled to as much as $200 in rebates, provided they purchase prequalified Energy Star models (Energy Star is run by the U.S. Department of Energy and the EPA, and company-made appliances that meet its standards use up to 25% less energy).
- You won’t have to turn in your old appliance to get a rebate.
- While rebates will be paid for by the federal government, the size of the rebate will be decided on a state-by-state basis.
- The overall amount each state receives in rebate money will be based largely on the population of that state.
While the program provides major perks for consumers, this may also be the perfect opportunity to upgrade the appliances in your corporate breakrooms and/or cafeterias. Not only will you save money on appliances, your appliances will be more energy efficient as well, which means lower costs.
What’s your opinion? Are these programs serving their purpose, or are they ultimately just another form of robbing Peter to pay Paul? Let us know in the comments below.
Source: “Cash for Clunkers moves to appliances: Money back for your old Kelvinator?” Consumer Reports, 8/21/09.
BusinessBrief.com delivers the latest business news once a week to the inboxes of over 180,000 executives.
Click here to sign up and start your FREE subscription to BusinessBrief!
advertisement
Tags: appliances, cash for clunkers, consumers, Department of Energy, economy, EPA, housing, Obama, spending, stimulus
August 27th, 2009 at 2:29 pm
WOW WHAT A DEAL!!!!! THANKS BUT NO THANKS. Why aren’t they explaining to “the people” that the money for these rebates that they receive is considered TAXABLE INCOME, and that they will have to claim it as income on their tax returns? Wow, Classic example of the old Bait and Switch.
Give me a break!
August 27th, 2009 at 4:24 pm
Hey, such a deal! The taxpayers giving their taxes to the government, so the government can give them back to us, with strings attached (i.e., paying taxes on the rebates that are generated by tax money paid in by the taxpayers)!!!! What a concept.
August 27th, 2009 at 4:28 pm
The next thing you know Americans are not going to purchase anything unless a government rebate is included. Then the taxpayer will be paying for everyone’s house hold goods. Imagine where that will lead the economy. That will not be sustanable.
August 27th, 2009 at 5:38 pm
I don’t like taxing some just so others who need something, such as an appliance will stimulate one specific sector of the economy. It is counter-intuitive at best, and unfair at the worst.
but referring to Loud’s comment, they make a common mistake in their heartfelt admonition. First this is not being done for no reason. It’s easy to forget that 10% of us are out of work, and that this is stimulus money. It’s the nature of stimulus money to borrow from the future to incite the present markets. If you work at an appliance plant or sell appliances, or frankly even just need a new appliance its not such a bad deal for you. I don’t like it, but that does not mean it is without some merit.
I’ll also add that while it is fun to make the connection between getting taxed later on the stimulus money, one could argue that this position actually has a backwards logic: It is not $200 plus the tax that the government is taking. It is $200 LESS the income tax paid by the recipient, and it is a progressive contribution because the higher your tax bracket the less net rebate you get. Conceivably, the poor would pay no taxes on this rebate money.
This tax collection actually lowers the impact of the stimulus, in terms of the net deficit impact by about 25%. This backwards tax logic is a common and understandable mistake made by most when tallying the real net cost of this type of program. This tax situation is true of virtually everything the government does, because almost all financial activity is taxable. The government always gets a discount on what it returns, knowing it will be taxed again later.
Taxing this in my view is more fair than not, because the recipient of the stimulus benefit will pay some of it back. What it does is STIMULATE the purchase, and then recruits the recipient into financing part of the program. I fail to see a bad guy in that part of the equation. I have not seen any deliberate attempt by the government to hide that fact that this is taxed. I will say I believe firmly that these appliances need to be BUILT IN THE USA. It’s ridiculous to stimulate trade for products made overseas. I would like to see that added to these bills. At worst, the machines should at least be assembled here in the US.
August 27th, 2009 at 5:42 pm
This is just more fascist meddling with the economy under the guise of “helping”. This stupid economic “policy” will undermine the economy and ruin everyone. Of course, ultimately that would mean the Feds would have to step in and save us all just like Hitler and Mussolini saved their populace. My 12 year old nephew has better economic sense than this batch of politicians. Vote out the monkeypunks as soon as possible.
August 27th, 2009 at 5:52 pm
Why are we rewarding these businesses for failing? Oh, thats right, socialism taxes the successful to reward the incompetent. Pretty soon, if they aren’t already, entire industries will be lining up to show how needy they are to get a government-sponsored “stimulus”. Ultimately it won’t make any sense to be efficient or industrious or clever since you only end up getting taxed more. The race to the bottom has begun!
August 27th, 2009 at 7:45 pm
First they complain that the government takes too much in taxes. So to stimulate the economy, the government gives back taxes in the form of rebates that actually stimulates the economy, which ultimately creates demand for goods and services, which will create jobs, which in turn will stimulate the economy more….and what does the Fellowship of the Miserable do? Complain some more, of course.
September 16th, 2009 at 4:16 am
my God, i thought you were going to chip in with some decisive insght at the end there, but I guess I’ll have to check back for some more