Check out this article over on CNN Money. Details are still a little unclear, but it looks as though Obama is planning a tax cut for the first half of the year. It will supposedly decrease your taxes by around $83 to $166 per paycheck.
This credit, dubbed the “Make Work Pay Credit”, could help get more money into the hands of consumers, thus increasing spending. The credit would essentially work as a payroll tax credit equal to $500 a year for individuals and $1,000 for couples. The money would be available before you file your taxes. This is due to the fact that your employers will just withhold less from your paycheck. Since Obama planned this credit for the middle class, it begins to be phased out for individuals making $75,000 or more ($150,000 for couples).
In my opinion, this is good thing. However, I’m not real sure if it is being executed properly. I think that if taxpayers were to receive this credit in a lump sum they would be more likely to spend it. If they just get a few more dollars on their paycheck each week, they will be more likely to not notice the increase in pay.
How would you like to receive you money, lump sum or on each paycheck?