Tax Rebate Calculator
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Save or Splurge?
Some 130 million taxpayers will receive tax rebates, in amounts ranging from up to $600 for an individual and $1,200 for joint filers - plus an extra $300 for qualified children under the age of 17.
But will these tax rebates boost the economy and help avoid a recession as they were aimed to do when introduced in February of this year?
If prior cash rebates from Washington - in 1975, 2001 and 2003 - are any indication of "if" Americans will spend this unexpected windfall, the answer is probably a resounding, "yes."
Analysis published in the American Economic Review in 2006 found that Americans' spending of the 2001 rebates was "substantial," with two-thirds of the rebate money received spent within the first six months.
Yet, according to a recent survey of taxpayers by H&R Block, 45 percent of the respondents said they would use the rebate to pay bills; 21 percent plan to spend it on something they need like groceries and car repairs; 18 percent said they would invest the money; and only 16 percent said they would use the rebates to splurge on something they want such as jewelry, electronics or vacations. Want to share with us what your plans are for your tax rebate? Blog your plans on "What Will You Do With Your Tax Rebate?"
U.S. retailers certainly hope the rebates will spark spending among consumers, with many retailers offering deals to help stretch these tax rebates and make them go even further by having these consumers by spend their money with them.
For more information on what retailers are offering, check out "Finding Rebate 'Retailer' Deals."