Consumers and Retailers Wait on Tax Refunds

Jul 10, 2003
George Anderson

By George Anderson

By the end of this month, refund checks will be sent to taxpayers as part of
the Bush administration’s $350 billion tax-cut package. What they will do with
the windfall is the subject of discussion among many investors and members of
the retail community, says a MSNBC report.

Ed Yardeni, chief investment strategist, Prudential Equity Group is looking
for the refunds to stimulate consumer retail purchases. “That should make a
big difference to income, consumption and GDP in the quarter. But [the effect]
could slow in the fourth quarter, depending on how consumers decide to spend
[the extra income].”

Moderator’s Comment: Will the 2003 tax cut help retailers?

We agree with Joel Slemrod, an economics professor at
the University of Michigan’s business school. He told CNBC. “I think we might
be surprised by how low a fraction of this tax cut will be spent.”

Anderson – Moderator

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