Refundless Recovery?

Saturday, March 06, 2004 | 08:10 AM


We have discussed the jobless recovery ad nauseum. Now comes more disconcerting economic news from Goldman Sachs economist, Edward McKelvey. Based on the IRS early data on tax refunds, the "idyllic picture described by last year's tax-cut legislation, wherein fiscal stimulus boosts refunds 20%, helping to brighten the economy" does not look like it will come to pass:

The IRS is reporting refunds through Feb. 20 have risen only 7.6% from a year earlier, far below Goldman's 20% plus estimates of the likely impact of last year's cuts. McKelvey cites several possible explanations for the tepid pace of refund growth thus far. Those who stand to gain the most from the retroactive part of the tax-cut, namely higher-income taxpayers and those getting large dividend payments or capital gains, tend to file returns later. And, more of those taxpayers may realize the benefit of the cut not in bigger refunds, but in lower final payments.

Still, Goldman's assumptions call for stimulus of $40 billion in the first half, compared with Treasury's recent estimate of $50 billion in total stimulus. But the trend in tax refunds so far hasn't been too encouraging. McKelvey writes that through Feb. 27, Treasury disbursed $70.2 billion in refunds, compared with $65.1 billion in the same period in 2003. The increase was less than half the extra $10.4 billion expected by this time in the filing season.

Though some have argued that the change in taxes on dividends has slowed the pace of filings, McKelvey cites IRS data that show filings have risen 2.6% this year from last . . ."


Refundless Recovery?
So Far, Tax Cuts Add Up to a Great Big Yawner
Edited by Robin Goldwyn Blumenthal,,SB107853338107248129,00.html

Saturday, March 06, 2004 | 08:10 AM | Permalink | Comments (0) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



TrackBack URL for this entry:

Listed below are links to weblogs that reference Refundless Recovery?:


The comments to this entry are closed.

Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      


Complete Archives List



Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:

Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo



Odds & Ends

Site by Moxie Design Studios™