May 28, 2008
Use Caution And Spend Tax Rebates Wisely
LINCOLN, Neb. — Tax rebates from the U.S. government's economic stimulus plan are in the hands of Nebraskans or are on the way. The question is what to do with them.
Kathy Prochaska-Cue, family economist in University of Nebraska-Lincoln Extension, said most people will choose to spend their rebates in three ways:
– Save it.
– Pay off credit card, utility or phone bills.
– Spend it all on a vacation or a product.
Most individuals will have $600 in rebates while couples should receive $1,200. Prochaska-Cue said those in lower income households or with more members in the family may receive more money from the government.
She said that if people do choose to spend their money on products, they should spend it on American-made products.
"That way it will definitely go back to the economy," Prochaska-Cue said. "That's the whole purpose, to stimulate the economy."
She said spending all the money on a big screen television at a chain store wouldn't necessarily send that money back into the U.S. economy because it could be a foreign product.
Prochaska-Cue also said many individuals should consider paying off credit card bills or putting the rebate money aside for an emergency savings fund.
Scam artists already are trying to take advantage of the situation. Prochaska-Cue said she has heard of people receiving phone calls or e-mails from what looks to be the IRS. These messages ask for bank information. Prochaska-Cue said the IRS is unlikely to ever contact a person without being contacted first.
"Be cautious," she said, "and remember the rule: if you don't initiate the call or e-mail, don't give out your information."
Prochaska-Cue also said people should remember that the rebates are not free money. She said the rebates are a gift from the government, but taxpayers are the ones that fund the government.
"It's ultimately money that we'll be paying for with our future taxes," she said. "It's like getting a loan. There's a danger that we may see an increase in taxes to help fund it in the future."
UNL Extension is part of the university's Institute of Agriculture and Natural Resources.
5/28/08-AB
Kathleen Prochaska-Cue - Ph.D.
Family and Consumer Sciences
Associate Professor
(402) 472-5517
Sandi Alswager Karstens IANR News and Photography (402) 472-3030
Department: Child
; Youth and Family Studies
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