Are tax reabtes good for the economy?

Question

Are tax reabtes good for the economy?

Answer 1

I don't think so because it's a one time deal.  This current rebate will only bump consumer spending so much.  And when it's used, its gone and the economy will return to normal.  A tax rebate is just a temporary fix.

Answer 2

They theoretically should be. The problem is, the United States has too many "unpaid bills" as it is (i.e. thanks to two wars costing over half a trillion dollars), our dollar has been severely weakened, and consumer confidence is relatively low.

Answer 3

ofcourse.  there are many types of tax rebates out there.  Bush administered one after the advent of 9/11 to stimulate the economy..basically in economics, based on a persons income line, greater income induces greater expenditures.  But do people really spend that money?  some people yes, some people no.  it all depends.  but one thing is for certain, people get wealthier as a result of tax rebates.  a negative thing about this is this can cause demand pull inflation.

Answer 4

Every answer so far has been wrong. Every answer has basically said that all your wages for your labor belong to the government and any refund/rebate due to you is not good for the economy. I personally hate working for free. Every answer so far is basically saying that its OK that we are slaves to the government. I for one dont agree with that. Its not what we were founded on.

Answer 5

Yes, but probably not to the level that people have been hoping.  To the extent that our economy is consumption based in the short run, it is important to maintain a smooth path to whatever corrections or adjustments are needed.   A tax rebate can help smooth out a drop in consumption and avoid jolts, but in the end, when you are in a given phase of the economic cycle, you will ultimately have to ride through it and come out the other side.

This is not to say that intelligent and well informed people and organizations have to suffer during a recession.    If your goal is to have minimal disruption in income, you can invest and guide your circumstances to be resistent to recessions.  But that may not be your ultimate goal.  Perhaps you want the highest possible net worth 30 years from now.  You might want to invest and work in a field that will be susceptible to recession, but have confidence that the boom periods will more than make up for the busts.   It's really a matter of what you want.   Overall, we like our economy to grow at a sustainable level each and every year, and avoid wild swings in the economic circumstances of the average citizen.  So our national economic policies are geared toward soft landings, which limits growth in the good times, but avoids some hardship in bad times.

Answer 6

Theoretically they can be. Realistically no, mainly because not everyone will use their rebate as intended. Instead of injecting that money back into the economy they will put it into savings or pay off debt.

Answer 7

Depends on how a so called tax rebate is paid for.

I personally think "tax rebates" are a joke. You see if I go to Best Buy and they offer me a $30 rebate on a $149 iPod, they are in a sense giving me money back from my purchase. Thus selling me a $149 item for $119.

If the government gives you a "tax rebate" they just letting YOU keep YOUR own money. Well if you pay taxes, its YOUR money. If you don't pay taxes, the rebate is SOMEONE else's money.

Anytime people are allowed to spend or save their OWN money. It is good for the economy.