… We examine low-to-middle income individuals’ responses to the 2013 payroll tax
increase and their 2012 tax refund and find that consumption declines … In addition, since
we compare planned spending responses to two events occurring in early 2013–the 2013
payroll tax increase and 2012 tax refund received in 2013–the underlying macroeconomic
and household conditions are roughly the same. Households’ responses are also not
memory-based, in contrast to existing studies. …