If you dread April 15th, this blog means very little to you. If you look forward to January 31st, the date that companies are required to send out W-2s, it takes on a whole different meaning. Either way, I think it looks good for Obama and the economy.
My Dad worked at a big tax firm for years and passed much of his knowledge down to me. So I do taxes for friends and relatives who cannot afford to pay to have it done. Before I come off as some kind of altruistic hero, most of them use the standard deduction, so it's not that difficult.
Now, most of these folks will get their W-2s in mid January. Most of them will also get a refund, some in the hundreds others in the thousands, in early to mid February.
The big question is how they use the refund. In a normal economy, paying down debt is the last thing you want these folks to do. You want them to take a vacation and/or buy a new big screen and/or remodel their kitchen.
This is a different time. Paying down debt will ease the banking and insurance crisis. Catching up on your house payment will ease the mortgage crisis. And if you have some disposable income left to splurge on a GI Joe action figure with a Kung Fu grip, all the better.
My point is that by Spring the effects on the economy could be huge. Obama could ride in on a wave of those on the margin of foreclosure and repossession who finally get themselves caught up.
As this happens, more capital is injected into the overall economy and while things will still sting, it may take some of the pain away while simultanesouly giving Obama some breathing room.
By next year this time Obama's tax plan will be in place. My assumption is that this plan will include increased revenue from corporations and the wealthy with refunds for the lower and middle class who hopefully by then will be caught up on their debts and can spend this money on goods and services.
Of course anything could happen between now and then that makes this diary moot. But as things stand right now, I am cautiously optimistic. Personally, I tend to break even at tax time. But there will be a lot of people spending a lot of money in the next few months, and for once any way they spend it helps.