Monday, November 24, 2008

"FaITH in America" Plan: Let's try a Federal Income Tax Holiday instead of bailouts

Here’s a radical idea… since we are dealing with such astronomically ginormous numbers in the ongoing rolling bailout … why not simply declare an individual and corporate federal income tax holiday for the 2009 tax year?

According the U.S. Census’ 2008 Statistical Abstract, individual income taxpayers paid about $1.1688 trillion in 2007 while corporations paid about $342.1 billion… that means annual federal income tax receipts are in the neighborhood of $1.5 trillion.

Instead of building enormous new bureaucracies and trusting our betters to allocate all of the taxpayer’s bailout money in the most efficient ways, let’s not collect the tax in the first place and let the bailout/stimulus package be a $1.5 billion tax holiday? If we are going to “put it on a credit card” anyway, why not keep future federal spending in a somewhat recognizable state so the taxpayer can better track it and judge its worthiness?

Just let us keep our own money instead of picking winners and losers and expanding the size and scope of federal government power. Maybe include a capital gains tax moratorium too?

Would all the economic activity spurred by a Federal Income Tax Holiday in America (“FaITH in America) plan be enough to end the recession/depression and get our economy moving again? I don’t know. I’m a liberal arts guy and not an economist. But if it could be "sold" as good economics to the financial markets, it would be easy for us regular folks to understand and embrace.

If the FaITH in America plan doesn’t work, at least we will not be saddled with exotic new bureaucracies with far-reaching powers eager to double down on their failed prescriptions. At worst, the taxpayer keeps their own money while increasing the collective public debt rather than paying their full tax bill and still increasing the collective public debt.
It’s easy to administer and we won’t have to turn over (more of) our economy to the central planners.

Though I’m half kidding about my FaITH in America plan, in some respects I’m not. I wish one of our leaders would encourage the Washington political and New York financial crowds to go through the intellectual exercise of how such a plan might actually work before we sign over another $300 billion guarantee to a bank “to big to fail.”

Imagine the popular outpouring of approval (and career advancing love) for the first politician to propose a workable FaITH in America plan.

Who knows, maybe we’re ready for radical ideas like a federal income tax holiday. We won’t know until someone asks.

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