Brian.oco 0 Posting Whiz

It was supposed to be Christmas in May, with technology company executives harboring visions of wallet-waving consumers dancing in their heads.

The reason? The proposed tax rebates coming from Washington that would put up to $1,500 in many Americans back pocket, and hopefully send them out to buy things like computers, cell phones, and Blu-Ray DVD systems.

Every politician from the President on down said the economic stimulus package would spark a spending surge that would keep the Americans economy out of recession and on the road to a strong recovery.

Not so fast.

A new survey of average consumers concludes that Americans may not be as all-consuming as politicians are hoping for when it comes to jump-starting the economy through a broad-based tax rebate. The survey, from the tax-specialist firm CCH CompleteTax survey, canvassed 2,200 Americans and found that politicians may have exaggerated a bit on what Americans would with their tax rebates.

I know, I'm shocked too!

The reality is, according to the CCH study, is that Americans have different priorities than politicians -- shocking, once again. “While it may be in the overall economy’s best interest for individuals to go out and buy more, when you ask the average person what they would do, they’re more focused on their financial well-being than on the health of the economy,” says David Bergstein, CPA, a tax analyst for CCH CompleteTax.

Plain and simple, that means paying down debt or banking the money for a rainy day - and not going shopping.

Here's how the survey broke down. When asked what they would do with their rebates, survey respondents said:

- Pay down debt: 47 percent
- Save it: 32 percent
- Spend it: 21 percent

Keep in mind that no final stimulus package has passed Congress yet. While it’s expected that rebate checks will start arriving sometime mid-year, lawmakers still need to iron out the details. The House of Representatives has passed a package that would provide tax rebate checks of up to $600 for individuals, up to $1,200 for couples filing jointly and an additional $300 per child. It also would provide a minimum of $300 to individuals with at least $3,000 in earned income. The House package would phase out rebates for individual taxpayers with adjusted gross incomes of more than $75,000 and couples with more than $150,000. Meanwhile, the Senate plan still under debate would provide tax rebates of $500 per individual, $1,000 per couple and $300 per child, and extend benefits to low-income individuals living on Social Security benefits as well as veterans depending on government benefits as their primary source of income.

I see a lot of studies on the economy, but this one really has some meat to it. It really offers a pervasive look at Americans' attitudes about "free" money, across all economic and demographic stripes.

Across all income levels, paying down debt was the most common response. Those with household incomes of less than $75,000 before taxes were the most likely to say they would use the rebate to pay off debt, with 52 percent of those with household incomes less than $35,000, 57 percent of those in the $35,000 to less than $50,000 household income level and 50 percent of those with household incomes of $50,000 to less than $75,000 indicating this, according to the CCH CompleteTax survey. Even among households with income of $75,000 or more, 44 percent said they would use a rebate to pay down debt.

In terms of employment status, more than one-half (54 percent) of individuals working full-time or self-employed would use a tax rebate to pay down debt, while 29 percent would save it and 17 percent spend it. Individuals who are unemployed or retired are more likely to indicate they plan to spend a rebate, with 29 percent and 32 percent of these individuals, respectively, saying they’re most likely to spend any tax rebate.

Individuals living with children are more likely to use their rebate to pay down debt and less likely to spend it than those without children in the household, according to the survey findings. Only 16 percent of households with children said they would spend their rebate, while 59 percent said they planned to use the rebate primarily to pay down debt and 25 percent will save it, compared to households with no children where 22 percent said they would spend a rebate, 42 percent would pay down debt and 35 percent would save it.

All in all, not great news for businesses looking for a shot in the arm from consumers. If the CCH study is right, and it's one of the more thorough ones on the subject of Americans and money I've seen in a while, it's more like a shot across the chin.