It’s the end of the year, and many of us are starting to think about tax preparation. As soon as the new year hits, it’s tax season (my mom worked for H&R Block, so I know all about this). But what if we didn’t have to pay taxes?
What if we got an income tax holiday?
One of the Representatives in the House, Louie Gohmert (R.-Tex.) is introducing legislation that gives everyone a break from income tax and FICA tax for two months (January and February). This is an interesting piece of legislation. The idea is that we will all go out and spend that money, and that will stimulate the economy.
The government is always using my tax dollars irresponsibly, so I do see the appeal in a plan that allows me to keep more of my money. However, in my opinion, there are some problems with this idea:
- Isn’t Social Security already in trouble? Wouldn’t no FICA for a couple of months make things worse? It’s not as if we’re actually reforming anything here.
- What are “we the people” going to do in March when we have to start paying taxes again? It won’t be pretty. Although this might be a way to transition away from the progressive income tax we have now to something more regressive, like a national sales tax or a VAT.
- The money is coming from the last $350 billion of the last bailout package. Which means its really more like a loan — since the government has to borrow to get that cash. At some point it will have to be paid back with interest. And guess who pays? We do.
- It’s probably not going to stimulate the economy. Remember the stimulus checks? They didn’t really help the economy. Because instead of spending the money and helping the economy, people paid off debt and put the money in savings. I’m thinking that, with the current climate, even more people would be inclined to use the money (wisely) in a way the government doesn’t intend.
Here are some other thoughts on an income tax holiday:
Watch the video of Rep. Gohmert on Fox Business. (No embedding allowed, unfortunately.)
What do you think of an income tax holiday?