The Tax Man's Bark This Year Seems Worse Than His BiteGene Koretz
While tax hikes at all levels of government are cutting into consumer incomes, there is one trend that is moving the opposite way. Economist John M. Youngdahl of Goldman, Sachs & Co. points out that cumulative personal income-tax refunds mailed out by Uncle Sam so far this year are running about 6% higher than last year, providing taxpayers with $1.8 billion more in cash than they did in the same period in 1990. At last count, the average refund was $ 895, up 5.8% from 1990.
Youngdahl also notes that individuals' estimated tax payments in January were also down 2.6% from 1990, suggesting that the government's tax take in April will prove lower than anticipated. Lower final tax payments and larger refunds, he says, "should enhance the ability of consumers to translate improved confidence into higher spending."