Consumer Response to Tax Rebates / Matthew D. Shapiro, Joel Slemrod.

Format:

Book

Author/Creator:

Shapiro, Matthew D.

Contributor:

National Bureau of Economic Research.

Slemrod, Joel.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8672.

NBER working paper series no. w8672

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Summary:

Many households received income tax rebates in 2001 of $300 or $600. These rebates represented advance payments of the tax cut from the new 10 percent tax bracket. Based on a survey of a representative sample of households, this paper finds that only 22 percent of households receiving the rebate would spent it. Instead, they would either save it or use it to pay off debt. This very low rate of spending represents a striking break with past behavior, which would have suggested a much higher rate of spending. The low spending rate implies that the tax rebate provided a very limited stimulus to aggregate demand.

Notes:

Print version record

December 2001.