Survey Finds Most Consumers Would Not Spend Tax Rebate

By Paula Cruickshank, Washington Staff Writer

As Congress and the White House have reached a final agreement on an economic stimulus package, nearly half of consumers in a nationwide survey said they would not spend their expected rebate checks, but instead use the money to pay down debt.

According to a survey of 2,020 U.S. adults commissioned by CCH, 47 percent of respondents said they would use the money to pay down debt, 32 percent would save it, and 21 percent would spend the money they received. The survey was conducted online by Harris Interactive from January 30 to February 1, 2008.

"While it may be in the overall economy's best interest for individuals to go out and buy more, when you ask the average person what they would do, they're more focused on their financial well-being than on the health of the economy," said David Bergstein, CPA, a tax analyst for CCH CompleteTax.

Across all income levels, the survey found that paying down debt was the most common response. In terms of employment status, 54 percent of individuals working full-time or self-employed would use a tax rebate to pay down debt, while 29 percent would save it and 17 percent spend it.

Individuals who are unemployed (29 percent) or retired (32 percent) are more likely to indicate they plan to spend a rebate. Individuals living with children are more likely to use their rebate to pay down debt and less likely to spend it than those without children in the household, according to the survey findings.

For more help with the many tax changes that may affect you for the 2007 tax filing season and beyond, take a look at the Toolkit Tax Guide 2008. This easy-to-understand book helps taxpayers--including individuals and entrepreneurs--manage their taxes so they can better prepare their 2007 tax returns, as well as begin planning for 2008. It also includes free income tax preparation of a state and federal return and e-filing with CompleteTax^TM, CCH's easy-to-use online tax return service for individuals. Toolkit Tax Guide 2008 is available in major retail and online bookstores nationwide; via the Business Owner's Toolkit bookstore; or by calling 1-800-248-3248.

Related items:

Economic Stimulus Package Clears Congress

National Economic Stimulus Legislation Agreement Announced

Economic Stimulus Plan: How Might It Work?

Tax Round-Up: A Look Ahead to Changes in 2008

Posted February 12, 2008.