Tax rebates go into the gas tank

Posted Jun 1st 2008 11:40AM by Douglas McIntyre
Filed under: Bad News, Consumer Experience, Exxon Mobil (XOM), Economic Data

Most Americans are giving their tax rebate to Exxon Mobil (NYSE: XOM). It should hardly be surprising that with oil at around $130 and the prices of most commodities used to make food doubling over the last year, the the money from Uncle Sam will not go for a new PlayStation.

The tax rebate was meant to stimulate the economy. Instead, it may be going to a fairly narrow group of companies including credit card firms and oil behemoths. That was hardly the plan, but, in an odd way, the government's program to get money to the consumer may be fueling inflation, at least in the energy sector.

The more the consumer spends on gas, the more likely it is that gas prices will stay high.

According to The New York Times, "Recent surveys underscore that many households are now too worried about the rising cost of driving and eating to spend freely, even as cash lands in their laps."

It is the law of unintended consequences at work, meaning that money back from the Treasury may do nothing to make the economy better.

Douglas A. McIntyre is an editor at 247wallst.com.

Tags: Exxon, Exxon Mobil, inthenews, Playstation, tax rebate, XOM

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Reader Comments (Page 1 of 1)

6-01-2008 @ 12:57PM

Glenn said...

That was a good one, give everyone rebate from the I.R.S., where do you think that money would end up. Right in Big Oil. Scamming the I.R.S., now how about sending checks from S.S., where do you think that would go. How many more Governments agency can you do that to. Talk about going public with S.S. this is even better way to take the money out.