President Bush's new policy on including more money in employee paychecks garnered mixed reviews from the local business and working community.

The policy, announced in Bush's State of the Union address Tuesday night, calls for an average of about $300 more annually in employee paychecks because of the decrease in the amount of taxes taken from the checks.

Those who fall under the new policy are married people making less than $78,700 and single people making less than $47,450 annually, according to a spokesman at the Internal Revenue Service's taxpayer service division in Pittsburgh.

Singles who fall into this category can expect about $172 more per year, which equals about $3.30 per weekly paycheck, said Bob Bloskis of the Internal Revenue Service. Married people can expect about $345 more per year.

But the plan is optional, he added. The IRS will automatically institute the policy unless people who wish to withhold the amount say so by writing the amount on line six of a W-4 form, Bloskis said.

The plan does not change the tax rate, but decreases the amount of money withheld from a paycheck, which means that a person who chooses the more-money-per-paycheck route may have to pay taxes at the end of next year, he said.

Thomas Fox, professor of economics, said he could not say whether the policy is good or bad but admitted that it may have the desired short-term effect that Bush expects.

"The (result) of increasing disposable personal income is that people will spend more," Fox said. "This will generally increase the demand in the economy over the short term."

People employed downtown who fall into that tax bracket had mixed reactions to the new policy.

"My question would be, 'What's the point?' . . . It really doesn't do anything," said Mike Birdsell, manager of New Age Sports, 232A W. College Ave. He said he would still take the increased paycheck and possibly pay more taxes at the end of the year.

But one shop manager disagreed.

"I'd rather have it in one lump sum at the end of the year," said Doug Byler, manager of Mike's Video I, 228 W. College Ave., adding that if he received more money, he would not save it.

John Hyland, owner of Candy Express, 202 W. College Ave., said that if the government follows through on tax reform, then he would consider the increase beneficial.

But he added: "It may be counterproductive because come tax time, I may have to pay a penalty. It is a smokescreen because it allows you to keep more money, but you'll have to pay later."

Norm Brown, president of the Downtown Business Association, said Bush aims to spur short-term spending, but downtown businesses must take the speech and the state of the economy as a cue to change practices and improve customer service.

Just because economics experts call the State College area "recession proof," businesses should not consider themselves immune to the pitfalls of a slow economy, Brown added.

"We can't have that fat cat attitude anymore . . . consumers are much more wary and price-conscious. We've got to make sure that what they take out of our stores are what (the customer) pays for," Brown said.

Businesses must become aware of consumer wariness by increasing customer service, he added.

Fox added that a short-term spurring of the economy is all Bush could do without the advice and consent of Congress. A long-term policy would require new legislation, Fox said.

Increased investment and government programs that would emphasize civil improvements such as building roads would spur long-term economic growth, Fox said.