Tax Rebate Checks to Pump $43 Billion into Economy

Tax Rebate Checks to Pump $43 Billion into Economy
February 15, 2008

According to a new National Retail Federation (NRF) survey, conducted by BIGresearch, consumers plan to spend 40.6 percent of tax rebate checks when they are distributed later this year, which will provide an immediate $42.9 billion boost to the economy. The survey, which polled 7,977 consumers from Feb. 5-12, also found that the $105.7 billion distributed in tax rebates will be used to pay down debt ($30 billion), saved ($19.8 billion), invested ($4.4 billion) and used to pay down medical bills ($4.6 billion). "Tax rebate checks should have the desired effect of both bolstering the economy in the short-term and putting consumers in a better position to spend for the future," said Tracy Mullin, president and CEO of NRF. "This stimulus package is a crucial component to economic recovery and will provide much-needed relief to American shoppers." The President signed H.R. 5140, the Recovery Rebates and Economic Stimulus for the American People Act of 2008, on Feb. 13. The $152 billion measure will provide tax rebate checks of up to $600 per working individual and $1,200 per married couple, plus $300 per child for families with children and new tax incentives for job-creating business investments. "Many Americans will be wisely using their rebate checks to save, spend and pay down debt, so the overall result will be positive for the U.S. economy," said Phil Rist, vice president of strategy for BIGresearch. "While some will splurge on big-ticket items, many consumers will use the checks for important day-to-day purchases." While women will spend a larger percentage of their rebate check than men (43.6 percent versus 37.3 percent), both genders will plan to set aside the same percentage for savings (18.7 percent). Young adults ages 18-24 will spend more of their checks (46.2 percent) than any other age group.