Jenkintown Community Alliance » Blog Archive » Keep Your Money Close to Home

The Jenkintown Community Alliance encourages Jenkintown residents who are receiving the Making Work Pay provision from the Internal Revenue Service (IRS) to spend those few extra dollars per week at locally-owned, independent businesses. During 2009 and 2010, the Making Work Pay provision of the American Recovery and Reinvestment Act (ARRA) will be seen in the form of a refundable tax credit averaging up to $400 for individuals, and up to $800 for married taxpayers filing jointly, according to statistics released by the IRS. The Making Work Pay provision translates to an average increase of $13 per week in take-home pay, per household.

Linda Kligman, executive director of the JCA, said “many people do not realize how positively and significantly spending $13 per week at businesses other than big-box, national chains will affect local economies across the commonwealth.” The JCA estimates that an average central business district has about 5,000 households in its trade area receiving the Making Work Pay tax credit. Therefore, if each household spends just $13 per week at locally-owned, independent businesses, this equates to $65,000 per week in additional sales for the local economy. Over a 52-week period, that dollar amount will grow to more than $3 million dollars.

According to the JCA, the true impact of spending $13 per week locally would be seen in the multiplier effect of local businesses investing their increased revenues back into the community. “There are many statistics out there regarding the ways communities benefit from buying locally,” Kligman said, “but one constant is that independent businesses are more likely to buy their own goods and services locally. So, if 60 percent is a middle of the road figure for revenue remaining in the community through secondary purchases, then the $3 million figure increases to $5 million over the same one-year period.” At a truly local level, Jenkintown’s trade area is estimated at 6000 households. Using the same numbers figures, this would annually translate to more than $5 million dollars worth of sales for local businesses.

This entry was posted on Tuesday, May 5th, 2009 at 12:17 pm and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.