Rebate Checks Could Spark Urge to Splurge

So, is it time to go shopping now? Congress may think so. But I don't.

Rebate checks from the federal government will hit the mailboxes of more than 130 million households this spring, thanks to a $168 billion economic stimulus package passed by Congress and signed by President Bush.

Buying our way out of the present economic slump could mean squandering an opportunity to bolster family finances -- even by a small amount -- at a time when many Americans are surveying the damage from their earlier spending blitz.

Last week's bill, intended to jump-start the economy, includes rebate checks of $600 for individuals with adjusted gross income up to $75,000 and $1,200 for married couples filing jointly who earn up to $150,000. Most taxpayers with higher incomes will still get some cash -- but the amount, in essence, shrinks by $50 for every $1,000 earned beyond the limit (the formula ultimately excludes the nation's highest wage earners).

Rebates of $300 for individuals and $600 for married couples filing jointly are in store for people who don't pay taxes, but whose earned income is at least $3,000. Recipients will also receive a $300 credit for each child.

Confused?

Then restrain yourself from spending until after filing your 2007 tax return, which will determine your eligibility.

Whatever the size of the rebate checks, I'm not sold on the notion that buying a television at Sears is somehow patriotic.

Neither are many Americans.

Only 21% of respondents in a recent survey conducted by CCH, a tax-information provider, said they would actually spend their rebates. Most said they'd pay down debt (47%), while about a third would save the money.