ICSC: International Council of Shopping Centers

Survey: Tax rebates mostly won’t be spent in stores

Tax rebates proposed by Congress won’t spur a surge in retail spending, because Americans likely to receive the rebates will use the money to pay off debt, according to a survey conducted by ICSC and UBS Securities. The U.S. House of Representatives passed legislation that would provide $600 for individuals and $1,200 for couples (single people with income of up to $75,000 and married couples with income of $150,000 or under would qualify). The survey, conducted between January 31 and February 3 asked 1,000 Americans what they would do with the money if the legislation became law: increase spending, increase savings or pay off debt. Forty-six percent of respondents said they would use the money to pay off debt, 28 percent said they would put the money into savings and 26 percent said they would spend it. “Consumers see this tax rebate program similar to earlier ones and will act in a similar fashion, using the lion's share of the rebate money for debt relief," said Michael P. Niemira, ICSC’s chief economist and director of research. “Lenders will see the money before retailers do,” he said. “But still, about $25 billion will head into the spending stream and that is positive for the economy.”