I Told You So (Payroll Tax Holiday Expiry)
It seems like a representative sample of the US population feels the same way I do about the expiration of the payroll tax holiday. USA Today and other outlets are all reporting a big hit to consumer confidence as a result of this hit to their paychecks.
Consumer confidence plunged in January to its lowest level in more than a year, reflecting higher Social Security taxes that left Americans with less take-home pay.
The Conference Board said Tuesday that its consumer confidence index dropped to 58.6 in January. That’s down from 66.7 in December and the lowest since November 2011.
Conference Board economist Lynn Franco said the tax increase was a key reason confidence tumbled and made Americans less optimistic about the next six months.
To that I say a big fat DUH!
What did you think would happen when you take a fragile economy with so many middle class workers just getting by and you cut their paychecks? And let me tell you that a recovery in real estate prices will not bring me or anyone else not planning to sell their house anytime in the near future much solace. In the meantime, I and just about everyone else am having to adjust to living off of only 98% of what we had become accustomed to over the last 2 years.
I don’t have a recommendation on how to fix it. It just kind of sucks.