Those people need send their tax break check money back to other’s….
For months, economists have warned that efforts by states to buffer their constituents from rising prices with tax rebates and stimulus checks might, paradoxically, make inflation worse by giving consumers more money to spend.
New income data released Thursday suggests that the state help is, in fact, making a difference to consumers by notably boosting their incomes. That could fan price increases going forward if it helps to fuel continued solid spending.
According to the report, personal income climbed by 0.7 percent in October, notably more than the 0.4 percent the previous month, partly because of increases in government social benefits that “primarily” reflected “one-time refundable tax credits issued by states,” the report said.
Solid income gains — which are also being fueled by higher wages and salaries — could give consumers more confidence to keep opening their wallets as they head into the holiday season. That could in turn give companies the ability to continue charging more for goods and services at a time when inflation is proving stubbornly rapid…
As part of the $1.9 trillion American Rescue Plan that Democrats in Congress passed last year, states, counties and cities were granted $350 billion in stimulus money. Although the law restricted states from using the funds to subsidize tax cuts, the courts have blocked that requirement and many state lawmakers — Republicans and Democrats — have opted to use budget surpluses to cut taxes or grant tax credits.
Economists have been fearful that additional stimulus funds will fan inflation by giving people more money to spend and enabling them to bid up prices for goods and services. Since states have enacted different policies at different times throughout the past year, it is hard to pinpoint the precise impact that local relief efforts are having on the national economy….