Taxpayers have options to consider with rebate checks

Published 3:43 pm Saturday, May 3, 2008

VIDALIA — Common economic thought says that every dollar consumers spend will turn over several times, and that is the logic behind the stimulus payments, or tax-free tax rebates, Congress recently authorized.

With the economy sluggish, consumers are encouraged to take their tax rebates and spend them on both durable and non-durable goods.

Natchez Ford Owner Brad Yarbrough said he expects to see a good number of stimulus payments work their way into his business.

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“The amounts of the stimulus checks are in line with what a typical down payment for a car is,” Yarbrough said. “Hopefully it will be a boost for the local auto dealers.”

To entice consumers into his business, Yarbrough said the business would be matching the customer’s stimulus payment if they bring it to make a down payment on a new automobile.

At Brakenridge Furniture in Ferriday, Gene Brakenridge said he hopes to see stimulus money come in, but that the store isn’t doing anything special.

At Reynolds Jewelry in Vidalia, Teresa Reynolds said they hope people feel like spending some of that stimulus money on jewelry.

“We haven’t really thought about having a sale to coincide with the stimulus payments, but we always have a sale,” Reynolds said.

But financial planners said that, if their clients asked them what to do with the stimulus payments, they wouldn’t necessarily advise spending it.

Tax manager at The Gillon Group Andy Montgomery said he would advise his clients to put the money into savings or to retire credit card debt or consumer loans.

“If this money is put into savings or pays current debt, it will not have the intended effect, but spending it is not something that I would advise to someone who has existing debt,” Montgomery said.

Dennis Switzer of Switzer, Hopkins and Mange said, though it is not the intended purpose of the stimulus package, he would advise his clients to invest the money.

“Some of these people could put that money into a Roth IRA account and let it accumulate over a period of time and draw it and the interest out tax free,” Switzer said. “Some people may elect to use it to buy consumer goods, but it just makes sense that a little extra money could be used like that.”

As for the taxpayers, their plans to use the money span the spectrum.

Local resident Dwight Cameron said he doesn’t know how he will spend the money yet.

“I’ll probably just use it to pay whatever bill is due at that time,” Cameron said.

But Julia Burns said she plans to use her tax rebate for fun.

“I’ll probably use it for a few little trips, maybe down to Biloxi,” Burns said.

Rebates by direct deposit began Friday. Rebate checks will begin being mailed May 16.