The tax cut that fell in the woods…

In a New York Times/CBS News Poll last month, fewer than one in 10 respondents knew that the Obama administration had lowered taxes for most Americans. Half of those polled said they thought that their taxes had stayed the same, a third thought that their taxes had gone up, and about a tenth said they did not know.

They reasoned that people would be more likely to spend a small, recurring extra bit of money that they might not even notice, and that the quicker the money was spent, the faster it would cycle through the economy.

Economists are still measuring how stimulative the tax cut was. But the hard-to-notice part has succeeded wildly. In a recent interview, President Obama said that structuring the tax cuts so that a little more money showed up regularly in people’s paychecks “was the right thing to do economically, but politically it meant that nobody knew that they were getting a tax cut.”

 

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2 Responses

  1. I wonder if enough people will actually notice to create a significant effect. You can try to make the donkey move with the good old carrot, string and stick. But will the donkey actually move forward if you put it behind its ear?

  2. Funny, I was about to say it is kind of like holding a bunch of baby carrots and slowly dropping them in the front of the donkey’s mouth under its eye line. It’s going to keep going forward but it isn’t going to see why.

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