From Obama, the 116 billion dollar Tax Cut Nobody Heard Of

Discussion in 'Politics & Religion' started by Range Rover, Oct 19, 2010.

  1. http://www.nytimes.com/2010/10/19/us/politics/19taxes.html?no_interstitial

    From Obama, the Tax Cut Nobody Heard Of
    By MICHAEL COOPER
    HUNTERSVILLE, N.C. —

    What if a president cut Americans’ income taxes by $116 billion and nobody noticed?

    It is not a rhetorical question. At Pig Pickin’ and Politickin’, a barbecue-fed rally organized here last week by a Republican women’s club, a half-dozen guests were asked by a reporter what had happened to their taxes since President Obama took office.

    “Federal and state have both gone up,” said Bob Paratore, 59, from nearby Charlotte, echoing the comments of others.

    After further prodding — including a reminder that a provision of the stimulus bill had cut taxes for 95 percent of working families by changing withholding rates — Mr. Paratore’s memory was jogged.

    “You’re right, you’re right,” he said. “I’ll be honest with you: it was so subtle that personally, I didn’t notice it.”

    Few people apparently did.

    In a troubling sign for Democrats as they head into the midterm elections, their signature tax cut of the past two years, which decreased income taxes by up to $400 a year for individuals and $800 for married couples, has gone largely unnoticed.

    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. As Thom Tillis, a Republican state representative, put it as the dinner wound down here, “This was the tax cut that fell in the woods — nobody heard it.”

    Actually, the tax cut was, by design, hard to notice. Faced with evidence that people were more likely to save than spend the tax rebate checks they received during the Bush administration, the Obama administration decided to take a different tack: it arranged for less tax money to be withheld from people’s paychecks.

    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.”

    “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.”

    There are plenty of explanations as to why many taxpayers did not feel richer when the cuts kicked in, giving typical families an extra $65 a month. Some people were making less money to begin with, as businesses cut back. Others saw their take-home pay shrink as the amounts deducted for health insurance rose.

    And taxpayers in more than 30 states saw their state taxes rise, according to the Center on Budget and Policy Priorities.

    That is what happened here in North Carolina. The Treasury Department estimated that the federal tax cut would put $1.7 billion back in the hands of North Carolina taxpayers this year. Last year, though, North Carolina, facing a large budget shortfall, raised a variety of state taxes by roughly a billion dollars.

    “It was a wash,” said Mr. Tillis, the state representative.

    The guests at the Pig Pickin’ rally here could rattle off the names of the House speaker and the Senate majority leader with ease, if with disdain, and were up on many of the political controversies of the day. They studied the campaign fliers at their tables, and pocketed the 1.5-ounce jars of strawberry preserves with special labels urging them to vote for Judge Bill Constangy for Superior Court (“Preserving Justice,” the labels read).

    Many volunteered that they thought the Bush tax cuts should be extended for all taxpayers, even for the wealthy ones whom Mr. Obama would like to exclude. But few had heard that there had also been Obama tax cuts — which will also expire next year unless extended, but have generated far less public debate.

    Bob Deaton, 73, who wore a “Fair Tax” baseball cap, was surprised to hear that there were tax cuts in the $787 billion stimulus bill, which was wildly unpopular with many at the rally even though roughly a third of it was in the form of tax cuts.

    “Tax cuts?” he asked. “Where were the tax cuts?”

    Ron Julian, 50, a Huntersville town commissioner, said he thought his taxes had gone up under Mr. Obama. And Mr. Paratore, a former Hearst executive, said he might have noticed the tax cuts if his paycheck had jumped more in the weeks before he retired last year: “I couldn’t even tell you what it was, to be honest with you.”

    The Obama administration wants to extend the little-noticed tax cut next year. Jason Furman, the deputy director of the National Economic Council, said the administration still believes that changing the withholdings was a more effective form of stimulus than sending out rebate checks would have been.

    “In retrospect, we think that judgment was right,” he said. “It’s harder to predict what’s good for politics. Ultimately, the best thing for politics is going to be helping the economy.”

    But at least one prominent economist is questioning whether the method really was more effective. Joel B. Slemrod, a professor of economics at the University of Michigan, analyzed consumer surveys after the last rebate checks were sent out in 2008 by the Bush administration, and after this tax cut, called Making Work Pay, went into effect under the Obama administration.

    After the 2008 rebates, he found that about a quarter of the households surveyed said they would use the money primarily to increase their spending. After the Obama tax cut took effect, he said, only 13 percent said they would use the money primarily to increase their spending. The Obama administration believes that people did spend the money, and cites analyses calling the cut one of the more effective forms of stimulus.

    Mr. Slemrod said it was not unheard of for voters to miss tax cuts. Just a few years after a 1986 overhaul of the tax system made significant cuts to most people’s taxes, he said, a survey asked people what had happened to their taxes. “Most people didn’t answer that they went down,” he said.

    Peter Baker contributed reporting from Washington.
     
  2. Arnie

    Arnie

    Obama just doesn't get it. This is the height of hypocricy. They (we) might not spend the tax cut, so lets give it to them in a way they won't notice so they (we) SPEND it. God help us if we saved it or used it for something else.

    Part of cutting taxes has to do with changing peoples attitude so they feel better about their situtation, THEN maybe they start spending.

    Clinton did something similar. Remember the promised tax cut that never was? He said (paraphrasing)..."we tried as hard as we could to cut taxes, but we just couldn't...besides, you wouldn't have spent it the right way"

    And the reporter is too dense to see the hypocrocy. Classic Gray Lady reporting.

    Fucking liberals. :D
     
  3. 116 billion in tax cuts

    237 billion in total tax incentives for individuals

    51 billion in tax incentives for companies


    100,000 troops pulled from Iraq

    Less then 30 dead from terrorist attacks(compared to his predecessor's 3,000 in his second year)


    38 % Gain in the stock market


    Unemployment didn't go as high as Reagen's 10.8 %


    Stopped numerous bank and credit card abuses

    Health Insurance companies will no longer be able to deny people health ins coverage.

    Health Insurance companies will no longer be able to drop coverage when you get sick.

    Health Insurance companies will no longer be able to deny legitimate claims

    Parents can keep thier kids on their health ins until they are 26


    Prevented the US auto and banking industry from collapsing

    Increased college pell grants from 4,700 to 5,500 per year



    Democrats should be on the offensive screaming these accomplishments from the top of their lungs rather then being on the defensive from tea party nuts and conservative radio hosts
     
  4. But he's a damn negro.



    Harriet Johnson: WE

    [Everyone jumps in shock]

    Harriet Johnson: THE WHITE, GODFEARING CITIZENS OF ROCK RIDGE wish to express our extreme displeasure with your choice of <s>sherriff.</s> president.
     
  5. Tsing Tao

    Tsing Tao

    you're not serious - you're blaming 9/11 on Bush?


    only idiocy would claim this a success - as it has had nothing to do with fundamentals and everything to do with the printing of money by the Fed. lets see where it is in 2012. likely you will have run and hidden by then.

    yet.



    did he? or did he merely paint over the larger problems? i assure you, banks are still pulling their old tricks.

    this is correct. and as a result, they will charge the rest of us much, much higher premiums. a tax if ever there was one.


    no they won't. only the government will be able to do that.


    postponed is a better verb than prevented. see bac news today. this isn't over yet BY FAR and Obama squandered the one opportunity to actually right the wrongs and instead papered over it with more of the same.

    the reason they arent is because they, unlike your uninformed self, actually know better. they know if they call this stuff out, the people who DO know better are waiting to tell the truth, just like i have done on your quotes.

    they don't feel like being called out on the truth. they KNOW better. you don't.