Nearly half of all Americans (45.7 percent) say they are planning to spend less overall this year, after changes in federal tax law that decreased their take-home pay, according to a new survey by the National Retail Federation.
“A smaller paycheck due to the fiscal cliff deal early last month, higher gas prices, low consumer confidence and ongoing uncertainty about our nation’s fiscal health is negatively impacting consumers and businesses across the country,” says Matthew Shay, president and chief executive officer, NRF.
When asked how the new federal tax laws have affected spending, saving or budgeting of their households, nearly six in 10 (58.2 percent) of those polled said their plans have been either somewhat or greatly impacted. Specifically, 45.7 percent plan to spend less overall, 33.5 percent say they will reduce how much they dine out and 24.5 percent plan to spend less on “little luxuries” such as trips to coffee shops, manicures and high-end cosmetics.
Of those greatly impacted, nearly half (49.2 percent) will delay major purchases, such as a cars, TVs or furniture, while 43.4 percent say they will contribute less to savings.
These spending shifts are expected to trickle over into tax season, with the majority of people who expect a refund planning to use that money to pay down debt (37.2 percent) and add to their savings (44 percent) rather than spending it.