Payroll Tax Whacks Spending

Firms Adjust as Resumption of Levy, Expensive Gas, Stagnant Wages Bite Consumers

Wal-Mart Stores Inc. WMT +1.52% on Thursday joined a parade of retailers, restaurants and consumer-goods companies worried about the economic impact of the recently restored federal payroll tax that has left Americans with less money to spend.

Now, Wal-Mart is stocking more of its shelves with cheaper products, and smaller-size packages of diapers, toilet paper and snacks. Burger King is cutting its Whopper Jr. sandwich to $1.29 from about $2, and focusing advertising on its value menu items rather than higher-price salads or smoothies.

Kraft and meat supplier Tyson Foods Inc. TSN -0.68% are introducing more lower-priced products to help restaurants and supermarkets adapt to the consumer spending downshift.

These companies say the changes could be long-lasting and are revamping operations to better cater to consumers pinched by higher taxes, stagnant wage growth and rising gasoline prices, which jumped nearly 50 cents a gallon in the past month alone.

Less take-home pay is causing 45.7% of consumers to curtail spending, according to a survey released on Thursday by the National Retail Federation, a trade group. A quarter of consumers are delaying big-ticket purchases, a third are reducing restaurant visits, and about a fifth of shoppers are spending less on groceries, it said.

U.S. retail sales in January rose at their smallest rate in three months, estimates the U.S. Commerce Department, a result said analysts of the effect the higher payroll tax was having on consumer spending.

Two years ago, when the payroll tax was reduced as a stimulus to a weak economy, restaurants reported that the extra cash in consumers' pockets was giving a boost to their business. Food chains now worry that the absence of that cash will halt those visits or encourage diners to spend less on every trip.

http://professional.wsj.com/article/SB10..._LEFTTopStories

I do not think it is just the payroll, we have been going down hill since the election. I am sure it is slower today than anytime since housing collapsed.
and I for one do not intend to do one thing to help and improve things, I will sit on my wallet and plan on reducing my income mid year, I am sick and tired
of paying taxes and illegals medical bills. I will not be screwed anymore.
heck I may even lie and get an obama phone. LOL

Quote: nerd wrote in post #2

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I do not think it is just the payroll, we have been going down hill since the election. I am sure it is slower today than anytime since housing collapsed.
and I for one do not intend to do one thing to help and improve things, I will sit on my wallet and plan on reducing my income mid year, I am sick and tired
of paying taxes and illegals medical bills. I will not be screwed anymore.
heck I may even lie and get an obama phone. LOL

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Quote: W-Girl wrote in post #3

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Quote: nerd wrote in post #2

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I do not think it is just the payroll, we have been going down hill since the election. I am sure it is slower today than anytime since housing collapsed.
and I for one do not intend to do one thing to help and improve things, I will sit on my wallet and plan on reducing my income mid year, I am sick and tired
of paying taxes and illegals medical bills. I will not be screwed anymore.
heck I may even lie and get an obama phone. LOL

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I am pessimistic about the whole economy and think we are headed for another nose dive and financial crisis. Obama et al was brilliant in hiding the true state of the economy to get reelected. The market will soon correct. The Fed policy cannot be sustained and has created more problems for us down the road. If we think big banks were too big to fail in 2008 .....we ain't seen nothing yet !! Insiders tell me the banks have created all these "off the books" entities to hide losses on bad loans and mortgages. Junk bonds are now back in play and small investors have loaded themselves up for a few extra bucks in interest. They will soon learn the risk vs reward theory all over again. And when it all comes to a screeching halt, Obama will be right there with his coward theme........"blame the Republicans" !!

The free phone crowd will learn a valuable lesson ....."trickle down free" ain't free forever !!

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It is a perfect storm. Weak economy, tax increase, more folks going Galt and the Fed running out of ideas and options for stimulus. My non-gun/sporting businesses are very slow. Slow as 2009 which was our worst year. Thank goodness I started some new stuff for guns/sporting last year. It is off the hook.

Quote: FP123 wrote in post #4

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You may have already seen these videos, I may have even posted the links here before. But if you haven't, it worth taking some time to watch all 8 of them. Ann can be a bit "intense" for some and I'm not sure that she has all of this 100% correct, at least in the sense of timing, but IMO she is definitely worth listening to and drawing your own conclusions: http://www.youtube.com/watch?v=7dFVFJ0iRRA

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Quote: The_Nevadan wrote in post #5

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It is a perfect storm. Weak economy, tax increase, more folks going Galt and the Fed running out of ideas and options for stimulus. My non-gun/sporting businesses are very slow. Slow as 2009 which was our worst year. Thank goodness I started some new stuff for guns/sporting last year. It is off the hook.

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Quote: W-Girl wrote in post #7

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Quote: The_Nevadan wrote in post #5

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It is a perfect storm. Weak economy, tax increase, more folks going Galt and the Fed running out of ideas and options for stimulus. My non-gun/sporting businesses are very slow. Slow as 2009 which was our worst year. Thank goodness I started some new stuff for guns/sporting last year. It is off the hook.

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Wise planning on your part ....Good Luck. NOT EASY for the small biz guy these days. My biz is service so I don't feel the pinch as much but my clients suffer and I feel their pain. I try to help as best as I can ....not easy sometimes !!

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Quote: The_Nevadan wrote in post #8

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Thank you for your good thoughts. Back at ya.

Actually it was an easy choice. After Obama's first four years of record gun sales and the fact that I had manufacturing time available it was a no brainer. Good news is that that operation is very a very low people count process. Set the machines up and they run all night with no one there.

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Quote: The_Nevadan wrote in post #8

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Quote: W-Girl wrote in post #7

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Quote: The_Nevadan wrote in post #5

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It is a perfect storm. Weak economy, tax increase, more folks going Galt and the Fed running out of ideas and options for stimulus. My non-gun/sporting businesses are very slow. Slow as 2009 which was our worst year. Thank goodness I started some new stuff for guns/sporting last year. It is off the hook.

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Wise planning on your part ....Good Luck. NOT EASY for the small biz guy these days. My biz is service so I don't feel the pinch as much but my clients suffer and I feel their pain. I try to help as best as I can ....not easy sometimes !!

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Thank you for your good thoughts. Back at ya.

Actually it was an easy choice. After Obama's first four years of record gun sales and the fact that I had manufacturing time available it was a no brainer. Good news is that that operation is very a very low people count process. Set the machines up and they run all night with no one there.

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Quote: nerd wrote in post #10

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Quote: The_Nevadan wrote in post #8

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Quote: W-Girl wrote in post #7

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Quote: The_Nevadan wrote in post #5

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It is a perfect storm. Weak economy, tax increase, more folks going Galt and the Fed running out of ideas and options for stimulus. My non-gun/sporting businesses are very slow. Slow as 2009 which was our worst year. Thank goodness I started some new stuff for guns/sporting last year. It is off the hook.

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Wise planning on your part ....Good Luck. NOT EASY for the small biz guy these days. My biz is service so I don't feel the pinch as much but my clients suffer and I feel their pain. I try to help as best as I can ....not easy sometimes !!

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Thank you for your good thoughts. Back at ya.

Actually it was an easy choice. After Obama's first four years of record gun sales and the fact that I had manufacturing time available it was a no brainer. Good news is that that operation is very a very low people count process. Set the machines up and they run all night with no one there.

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Ok, what are you making with the machines, I need an ak 74 gun barrel.

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