Bush Tax Package Has Led To Average Refund Increases Of Less Than $100
Remember the Bush claim that with his 2003 tax package, the "average" taxpayer would get a $1000 tax break?
Well, it certainly won't be as a result of their refunds. How about $97? That's the average increase in 2003 refunds resulting from the Bush tax package.
The first batch of checks mailed from the Internal Revenue Service this year showed the average tax refund $97 higher than at the same time in 2003.
Refunds mailed so far this year average $2,292, a 4.5 percent increase over payments a year earlier in 2003, the IRS reported Friday. Tax refunds tend to be higher during the first weeks of the tax filing season, when taxpayers expecting checks hurry to file their returns.
"It's significantly higher than it was a year ago, and that's one of the tail winds pushing the economy forward during the first quarter," said Sung Won Sohn, chief economist with Wells Fargo & Co. in Minneapolis.
Last week, the Treasury Department (news - web sites) said, "The president's 2003 tax relief will increase refunds paid this spring by an average of $300."
Two things about this: first, remember to never trust anything Mr. Won Sohn says again. Anyone who thinks $97 is "significantly higher" is either deluded or a whore for the White House, or both. Second, if the first batch of refunds according to the IRS are higher than those later in the filing season, then we have only to go down from here. I am not surprised that the Bush Treasury Department is already terribly wrong about their claim that the average refund will be $300 higher. These are the same lying hacks who came up with the erroneous deceitful claims to date about the tax cuts, so why should accuracy matter to these political spinners now?
But remember this: $97. Of course the Bush folks will say that 1) the amount of folks' refunds is also a function of their withholding; 2) taxpayers have seen weekly tax reductions in their take home pay due to the marginal rate cuts, and 3) these marginal rate reductions may have contributed to the sustained strength in consumer spending over the recovery. All true. But a large part of that sustained spending is also the refinancing boom and resulting mortgage payment reductions, along with the cashing out of equity from the low interest rates and increasing home values. So again, it is still unclear how much the Bush tax package has contributed to the sustainability of consumer spending.
What is clear is that the "average" taxpayer who was supposed to see an "average" benefit from this package of just over $1000, is seeing an "average" refund increase of less that a tenth of that.