Tax rebate could be good for businesses

Colo. shops welcome idea of extra money in buyers' pockets

By Joanne Kelley, Rocky Mountain News (Contact)

Saturday, January 19, 2008

Jacob N. Ware / Special to the Rocky

Randy Schmidt, left, of Centennial, talks with Ultimate Electronics employee Steve Kalinger about plasma TVs on Friday. Congress is discussing giving Americans a rebate of about $800, though no amount has been set.

Local businesses trying to get consumers to open their wallets a little wider hope that a few hundred extra dollars will do the trick.

The possibility of federal tax rebates to help stave off a recession - part of broader discussions in Washington about how to stimulate the economy in short order - could prod more discretionary spending on everything from restaurant meals to vacations to electronics.

"The spending would be a combination of essential living expenses and pleasure spending due to newfound disposable income," said Peter Cobb, co-founder of Denver-based online retailer eBags.com. "And, of course, we believe women would run out and purchase handbags."

Jim Shpall, president of Applejack Wine & Spirits, also predicted a boost for his large wine and liquor store in Wheat Ridge.

"If it's in their pockets, they'll go out and spend it," Shpall said. "But consumers are smart, and the reason why we'll see an uptick is because they'll still see a potentially recessionary economy, so they're not going to a fancy little boutique shop."

On the wish list for Denver's tourism sector: Consumers would use their extra discretionary income for impulsive trips.

"Denver is still a bargain, and we have lots of nonstop flights," said Jayne Buck, vice president of tourism for the Denver Metro Convention & Visitors Bureau.

In trying to persuade consumers to release their grip on their pocketbooks, "this is probably one of the better ways to do it," said Clint Stretch, tax policy director at accounting firm Deloitte & Touche. "It puts money in the hands of people who will buy consumer goods."

Whether they would use extra cash to pay off credit-card debt, pad their savings or buy new stuff remains a question, Stretch said.

The National Retail Federation leaned on Congress and the White House this week to act quickly to pass legislation that would "put dollars back in consumers' pockets." The huge retail lobby described this past season's holiday sales as the weakest in five years.

Stimulus in the form of tax rebates could bring relief for area restaurants facing recent minimum-wage increases, rising commodity prices and changes in customer driving habits because of the high cost of fuel, said Pete Meersman, president of the Colorado Restaurant Association.

"It is tough out there right now," Meersman said. "It's starting to feel like a recession - I think people are taking a look at their spending habits."

kelleyj@RockyMountainNews.com or 303-954-5068

What an extra $800 could buy . . .

* Rockmount signature black leather bomber jacket, $600; vintage western shirt with floral embroidery, $86, and "Wolf Creek" cowboy hat, $40, for a total of $726 (pre-tax)

* Five Colorado Rockies infield box Opening Day-pack tickets at $147 each with fees, $769

* Nonstop flight to Costa Rica on Frontier, $745 after taxes

* One grande latte at Starbucks each weekday for a year, $720

* Gateway Laptop with AMD Turion 64 X2 via Bestbuy.com, $650

* 274 gallons of unleaded gas at a price of $2.913 each

* 97 percent of the average Colorado apartment rent of $821

* One year of RTD local bus passes, $720

* Toshiba 32-inch LCD HDTV at Ultimate Electronics, $729 (pre-tax)