At this point, most firms have likely implemented the lower withholding schedules that have been released by the Treasury, and advance rebates of child tax  2  BIS Review 33/2003  credits are being mailed beginning later this month. The Joint Committee on Taxation estimates that these and other tax changes should increase households’ cash flow in the third quarter by $ billion.
Most mainstream economic models predict that such tax-induced increases in disposable income should produce a prompt and appreciable pickup in consumer spending. Moreover, most models would also project positive follow-on effects on capital spending.