Filed under: News, The Economy
The Obama stimulus Tax cuts are so subtle, that no one has noticed. These tax cuts were distributed with the hope that some measure of relief would be provided to families, and that the additional money would also be used by recipients to help stimulate the economy. Based on evidence from a 2008 survey that people were more likely to save lump sum payments than to spend their rebates, the administration doled out the money incrementally and in the form of tax cuts.
In contrast to the lump sums provided under Bush, Obama arranged for less tax money to be withheld from people's paychecks, effectively giving them a small "rebate" in every paycheck, rather than in a lump sum. Unfortunately, many didn't notice the giveback. As Thom Tillis, a Republican state representative said, "This was the tax cut that fell in the woods - nobody heard it." Yet, taxes had been cut.
The cuts gave typical families an extra $65 per month. Over the past two years the tax cuts decreased income taxes by up to $400 a year for individuals and $800 for married couples. But, recipients of the slightly bigger paychecks may not have noticed this increase in their paychecks. This is because despite their taxes being lower, living expenses may have risen during the same period. Additionally, very few people have fine tuned budgets or pay attention to their paychecks. Otherwise they may have noticed the Obama rebate.
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Sadly, many people having a higher cost of living are of the impression that their taxes had been raised, rather than cut. "And in fact what ended up happening was six months into it, or nine months into it," the President said, "people had thought we had raised their taxes instead of cutting their taxes." In fact, a provision of the stimulus bill had cut taxes for 95 percent of working families by changing withholding rates. While economists are still measuring how stimulative the tax cut was, that perception could hurt the administration. A friendly reminder that a third of the $787 billion was in the form of tax cuts.
Read the rest of this stimulating revelation on The Atlanta Post.
BV -- Talk Back!
Questions:
-Did you know that President Obama lowered your taxes?
-If so, did you consciously spend the extra cash to stimulate the economy, just out of necessity or did you save it?
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