The hope is that the Bush administration's recently passed tax cuts, which include rate reductions as well as immediate rebates for families that claim child tax credits, will increase consumer demand for the next six to nine months.
Under the terms of the proposed settlement, merchants could offer consumers an immediate discount or rebate for using a particular type of payment, a particular credit card network (Visa versus American Express), or a low-cost card within that network (a Visa debit card rather than a Visa credit card).
Mr. Obama would provide an immediate tax rebate of $250 to workers and would pay an extra $250 to every person collecting Social Security benefits.
Stuart Schorr, public affairs manager for DaimlerChrysler, said its top lobbying goal was the repeal of the alternative minimum tax, a move that could give the company an immediate $600 million rebate.
Senator Barack Obama of Illinois has a $75 billion plan based largely on immediate tax rebates of $250 to most workers to encourage consumer spending.
The Treasury secretary conspicuously questioned whether the administration's original tax-cut plan gave enough short-term kick to the economy, and he pushed the idea of immediate tax rebates on a reluctant White House.
In addition to that spending, Democrats relished the opportunity to contrast their economic stimulus bill -- which provides jobless benefits and health insurance for the unemployed and immediate tax rebates for low-wage workers -- with a Republican bill passed by the House, which would cut taxes for many large corporations.
Anybody who buys an electric car gets an immediate $5,000 rebate or perhaps a 30% federal tax credit similar to how the government incentivizes solar could apply to electric cars.
Initial proposals for an immediate, across-the-board rebate came from Democrats; the administration finally went along, but tied the rebate to what it really wanted, big tax cuts for the rich in future years (and fudged the accounting to pretend that it could do all this without raiding Social Security).
