Will Tax Rebates Boost Economy? Test Starts Today

The government has begun sending out the first cash
By Peter Fearon,  Newser Staff
Posted Apr 29, 2008 7:58 AM CDT
A shopper reaches for milk at the Acme supermarket in Lawrenceville, N.J. Tax rebates will begin showing up in Americans' bank accounts this week.    (AP Photo/Mel Evans, file)
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(Newser) – The first tax rebates designed to kick-start the economy should begin arriving in bank accounts today. The Treasury Department has begun sending electronic rebates to nearly 8 million people by the end of this week, and some 130 million checks will go out via snail mail in May. President Bush hopes taxpayers will spend the cash—up to $600 for individuals, $1,200 for couples—but economists say many will save it or pay off debts.

“Because it does not get into the economy, it does not increase incomes immediately,” said one economist. “On balance it was a good idea. Even if only modestly, it will lean against the wind.”