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Ernie Tedeschi Apr 2
I'm not surprised people haven't been noticing the TCJA in their paychecks. Even if everyone adjusted their withholding perfectly, more than half (56%) of families would see a tax change of $20 or less (including a tax hike) per two-week period. 75% would see <$50.
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Ernie Tedeschi Apr 2
Replying to @ernietedeschi
Obviously over a whole year, even small changes can add up. But small changes are harder to notice in real time.
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Ernie Tedeschi Apr 2
Replying to @ernietedeschi
(Just ask the Obama Administration about the Making Work Pay tax credit)
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Ernie Tedeschi Apr 2
Replying to @ernietedeschi
And sorry, I cut off the y-axes intentionally at -$50 and +$50 to show the relevant detail, but those should be labeled "-$50 or less" and "$50 or more"
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Ernie Tedeschi Apr 3
Replying to @ernietedeschi
Here's a simpler, better-labeled chart making the same point.
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Ernie Tedeschi
Two further quick points 1. Even this may overstate the salience of tax cuts, b/c it looks at how each **family's** taxes change in 2018 from the TCJA. But if this change is split across, say, 2 working spouses, then each spouse is less likely to notice in their own paycheck.
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Ernie Tedeschi Apr 4
Replying to @ernietedeschi
2. Most economists agree that corporate tax cuts *eventually* have a nonzero effect on wages, though there is fierce debate over what the magnitude of that effect is. Moreover, this is a long-term effect, whereas I'm just asking a very short-term question about tax salience.
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Ernie Tedeschi Apr 4
Replying to @ernietedeschi
Therefore, I didn't include any corporate tax cut effects for this analysis.
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