NRF: Tax Rebate Checks to Immediately Pump $43 Billion into Economy

May 5, 2008  by in UnCategorized   

By Home Furnishings Business in on May 2008 According to a new National Retail Federation (NRF) survey conducted by market intelligence firm 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 also found that the $105.7 billion distributed in tax rebate checks 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 NRF President and CEO Tracy Mullin. “This stimulus package is a crucial component to economic recovery and will provide much-needed relief to American shoppers.”

H.R. 5140, the Recovery Rebates and Economic Stimulus for the American People Act of 2008, is a $152 billion measure that 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 (42.2 percent vs. 38.7 percent), both genders will plan to set aside the same percentage for savings (18.7 percent). Young adults 18 to 24 years of age will spend more of their checks (46.2 percent) than any other age group.

The NRF 2008 Tax Rebates Consumer Intentions and Actions Survey was designed to gauge consumer behavior and shopping trends related to the upcoming tax rebates. The survey, which polled 7,977 consumers, was conducted for NRF by BIGresearch from Feb. 5-12. The question asked, “The President and Congress are discussing options for sending families rebate checks ranging from $600 to $1,200. If you get one, what will you do with the money?” The consumer poll has a margin of error of plus or minus 1 percent.