Taxpayers on track to get record $180B in refunds

Taxpayers are on track to receive more refunds this year — an estimated $180 billion in total — then they have ever received, according to a report today from BNY ConvergEx Group LLC, an industry consultant. While a portion of these refunds will likely be saved or used to pay down consumer debt, part will also go to incremental spending, and that’s good news for consumer-oriented companies and their first-quarter financial results, said Nicholas Colas, chief market strategist at ConvergEx. “For the last two weeks, refund payments have exceeded the prior year by $3 billion per week,” Mr. Colas said. “That may not sound like a lot in a world where we are accustomed to thinking only trillions of dollars matter, but that is the equivalent of every single American getting an extra $10 in each week.” That so much in refunds is going out to individuals is a bit of a surprise. “At the beginning of the year, we were concerned that tax refunds would disappoint,” Mr. Colas said. “The genesis of our concern was that federal-tax-withholding tables were adjusted last year to increase take-home pay and stimulate the economy. This should have resulted in a lower amount of tax refunds, but in fact, the opposite has proven true.”