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Sunday, May 28, 2023
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Tax Rebates: A windfall spending spree, or saving for a rainy day

co-sunshine-rebate.gifCongress is opting to put more money in the pockets of taxpayers via tax rebates of $600 to $1,000, a move made in the hopes that taxpayers will quickly funnel that money back into the economy. A worthy goal, I suppose.

I’m sure that electronics showrooms and a host of other retailers are hoping for a spending surge in a few months, but will it happen, and will it be enough to jump start the economy? The jury will be out for a while on that one.

I do know that for me any refund or other form of “windfall” will not quickly refuel the economy. My TV works just fine. I won’t buy a cell phone. My closet is full of clothes. I borrow more DVDs from the library than I will ever buy. A trip to Barnes and Noble could constitute a “weak moment” but since B&N is in Nashville, I’d have to say “not likely.” I’ll just pocket the cash for a rainy day.

Given the rising cost of energy (including gas) and my heartfelt belief that the cost of gas, winter heat, summer air conditioning, and yes, the cost of groceries at the local market, are only going to rise, my refund could be designated for those future costs. My windfalls, in any form, are usually earmarked to prepay things like rent, utilities and internet service. And keeping my pantry stocked. I like the feeling of knowing my housing and basic services are guaranteed, that a shortfall or the unexpected will not leave me on the edge of a nervous breakdown or a financial panic attack.

co-gas-prices.JPGFor many Americans this refund is all or part of one month’s escalating mortgage payment, a boost to pay off credit card debt, or a bit of gas pump relief. Maybe a car or insurance payment. For the insecure or worried, it could likely be a nest egg, a hedge against the unexpected. In fact, it should be a nest egg. It’s not really “found money,” though even if it were, is that a reason to run out and spend it at random or on a whim?

The fact is, for most, the refund is piddling. $600 is one month’s rent for many people. Or a month of groceries. Maybe one or two pricey prescription co-pays. In Mitt Romney’s Tax-achusetts it’s the price of two months of the most minimum mandated health insurance package.

I find myself laughing (ironically) at the speed at which government rushes to fuel money to the people to “shore up the economy” even as that same government is fueled by pork-barrel spending and racking up war debt a billion dollars at a time, mortgaging the future of our children and grandchildren, and indenturing our military to another decade of servitude in the Middle East while our roads crumble, our our families and elderly struggle with housing and medical costs, our housing market crumbles, and our students are encouraged to “pursue higher education” through the vehicle of further indebtedness (college loans).


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