Tax refunds will affect retail sales

Your front page article in the business section about February retail sales completely misses the real reason for the increase. As someone who prepares taxes, I believe the increase in sales is due solely to federal income tax refunds, mostly for the working poor.

A couple who files jointly, has two children, and makes $18,000 will receive a federal refund of $7,828 in earned income credit, additional child tax credit and making work pay credit. Plus, any tax withholding will also come back to them since they will have no tax liability.

That refund amounts to over 43 percent of their total annual income. They will receive this money all at once in a two-week period. Pent-up demand for goods will be relieved by the huge intake of cash. Retail sales increase has nothing to do with increased consumer confidence.

To not recognize the effect of federal tax refunds on consumer spending is either a huge oversight or an intentional manipulation of the facts.

Jeanne Ives

Wheaton