It appears that even the New York Times can see that the recent payroll tax increases have been bad for the economy. In an article entitled “Restored Payroll Tax Pinches Those Who Earn the Least” they highlight the pinch that payroll tax increases, effective January 1st, are having both on individuals and the economy as a whole.
There are growing signs that the broader economy is suffering, too.
Chain-store sales have weakened over the course of the month. And two surveys released last week suggested that consumer confidence was eroding, especially among lower-income Americans.
The piece goes on,
“There is something going on,” said Chris G. Christopher Jr., senior principal economist at IHS Global Insight. “The payroll tax seems to be cutting into things.”
Yes, it is undoubtedly cutting into things. When people bring home less cash, they can’t spend as much on anything – food, televisions, cars, kitchen remodeling. And all of that means that every other industry suffers. If your customers are pinching pennies, it’s pretty hard for your company to thrive.
A shame no one thought of this before the new year…