Making Work Pay: The No-Impact Tax Rebate Program
The “tax-rebate” component of the White House’s economic recovery plan appears to have had almost no impact at all.
Under last year’s “stimulus” bill, tax credits were not issued via a lump-sum check from the Treasury. Rather, the IRS reduced withholding from paychecks. “Making Work Pay,” they called it.
Research indicated people would deposit their lump-sum rebate checks into savings. And what good would that do for consumer spending numbers? But, the geniuses who created the program, thought if paychecks were a bit bigger – $16 whole US dollars for a single taxpayer paid every two weeks – Americans were more likely to go out and spend, spend, spend it away.
Oops. More than half of the people surveyed by the University of Michigan had no idea their paychecks had grown at all. And now many of them are failing to claim the tax credit on their 1040s – forking over $400 more than they owe, or giving up $400 of their refund.
“Making Work Pay.” Yeah. Enjoy your Tax Day.