We agree with President-elect Barack Obama that a particularly fruitful means of stimulating the economy is to provide tax relief for American workers. But the devil is in the details, and we wonder whether the Obama plan will provide the immediate jump-start the economy needs.
Obama met last week with House Speaker Nancy Pelosi, D-Calif., to discuss his stimulus program. It is to include as much as $300 billion in tax cuts, with some going to businesses and the remainder earmarked for working men and women. Individual workers would receive $500 and couples would get $1,000.
But reports on the plan are that the tax relief would be granted by reducing the amounts withheld from workers' paychecks by their employers. If that is done over a period of several months, it would be unlikely to have much impact on the economy. It also would be a burden on employers who would have to process the changes.
If Obama and Pelosi mean to proceed with tax cuts for working people, we encourage them to provide lump-sum payments - to get money pumped into the economy, either through purchases or debt paydowns by families, as soon as possible.