Kudlow’s panelists Steve Moore, Kevin Hassett and Steve Forbes react to the president’s planned significant tax increases.
American taxpayers will receive larger benefits on average tax refund A new report from the Bank of America Research Institute finds that, compared to a year ago, most people plan to use that money to pay off debt or save, but fewer people than a year ago plan to invest or shop. It is said that the number of cases is increasing.
internal data from american bank showed that for the average tax refund received through direct deposit through March 31, 2024, the refund for taxpayers earning less than $50,000 per year increased by nearly 9% from a year ago. This outpaced the roughly 6% increase in refunds for taxpayers in the $50,000 to $125,000 range and the roughly 4% increase in refunds received by taxpayers making more than $125,000.
“The average tax refund this year is expected to be about 5% higher than last year,” David Tinsley, senior economist at Bank of America Research Institute, told FOX Business. “So that’s a refund of about $3,000 in dollars.”
According to survey data conducted by Civic Science for the institute’s report, when tax fund recipients were asked how they would use their tax refunds, the majority said they would use it to pay down debt or save money. .
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Americans’ tax refunds are expected to increase by about 5% this year, and the increase for low-income taxpayers is expected to be even larger. (license/image)
About 25% of people said they would pay down their debt, down from just under 30% a year ago, according to the Civic Science survey. About 23% said they would save this year’s tax refund, and just over 25% said they would save their 2023 tax refund.
Approximately 13% of tax refund recipients surveyed said they plan to issue a refund. invest your refund That’s up from about 9% last year. The percentage of people who plan to go shopping after receiving a refund has nearly doubled, from 4% a year ago to 8%.
Other tax refund spending plans, including home improvement projects and vacations, were about 8% and 6%, respectively, about the same as a year ago.
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A study by the Bank of America Research Institute and Civic Science found that the percentage of tax refund recipients who plan to use the money has increased slightly from a year ago. (Photo illustration: Justin Sullivan/Getty Images/Getty Images)
“Generally speaking, about half of Americans say they will pay down their debt or save money, so we don’t expect to see a significant boost in consumer spending on that basis,” Tinsley explained.
“However, our survey found a slight increase in the proportion of people who said they would go to the store if they had money, so the tax rebate could be a modest boost for consumers.”
Tinsley pointed to a Bank of America Research Institute study that found child care costs have increased by about 30% since 2019. car insurance premium With housing rising as well, American households are feeling financially squeezed after receiving tax refunds.
David Tinsley said easing rent inflation and tax rebates would provide some tailwinds for consumers. (Photo by Joe Radle/Getty Images/Getty Images)
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“All kinds of expenses are hitting household budgets, so in that context I think this tax refund increase is very beneficial,” he added. “That’s a significant increase, and it’s not a huge percentage of the household budget.”
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| BAC | bank of america corporation | 35.95 | +0.16 | +0.45% |
Rise in rental housing prices The nearly double-digit increases seen in major metropolitan areas in 2022 and early 2023 have now settled to around 4%.
“Rent inflation has eased considerably,” Tinsley said. “As long as the labor market remains strong, it should be beneficial for renters, because as long as there are reasonable wage increases, increases in rent payments will decline.”
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“This is another beneficial tailwind for spending, similar to tax refunds. Neither of those are big shake-ups in and of themselves, but they are beneficial tailwinds for consumers overall,” he added.
