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Politics

You own this tax bill, Republicans. Good luck.

Catherine Rampell on

Consider previous tax reductions.

The 2009 Recovery Act -- the economic stimulus passed under President Barack Obama, in response to the Great Recession -- cut taxes for 96 percent of households, according the Tax Policy Center. Incidentally, it also gave bigger benefits to families in the middle (and also bottom) of the income distribution than the Trump tax law will next year.

And yet, despite the magnitude and near-universality of those Recovery Act tax cuts, virtually no one noticed them.

A year later, just 12 percent of Americans knew that Obama had cut taxes for most people.

The 2001 and 2003 George W. Bush tax cuts tell a similar story. These cuts benefited about three-quarters of households, and also gave a bigger bump in after-tax income to those in the middle quintile than the Trump tax plan will next year.

And yet in 2004, just 19 percent said that Bush had reduced their taxes.

 

Why is it so hard to recognize a tax cut when you, and almost everyone else, have gotten one?

When it primarily appears in dribs and drabs over the course of the year through paycheck withholding, it's just not that salient. Especially given all the other variables that can cause one's take-home pay to fluctuate from year to year or week to week, such as changes in wages, hours and benefits.

Let's say, though, that Republicans are right, and people do notice their taxes falling in 2018. Even then it's not clear they'll sweeten on the Trump plan.

In fact, they may sour on it further.

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