As our representatives in Washington prepare to spend our children and grandchildren's money on yet another bail out, the question has arisen as to why they just don't declare a tax holiday. Good question, especially if you think that simplicity has elegance. The size of the current stimulus plan would mean a tax holiday of over 6 months could be enacted. Can you imagine how much you could stimulate the economy if there were no federal withholdings from Jan. through August?
There are 2 main reasons that such a logical step will never be taken.
- Because money is power to those in Congress. It doesn't matter if they are Repucblican or Democrat, Conservative or Liberal, Red or Blue, they will never stop collecting that which brings them power; your tax dollars. If money stopped flowing into Washington, Congress would have no other options but to print more. Today they operate under the illusion that only they can intelligently spend the Federal budget.
- It would lead to rebellion. Many people do not understand how much they pay out of each paycheck to the Feds. Some still believe that a tax refund is a gift from the Federal Government, and not a refund of overpaid taxes. If there were a tax holiday, it would become immediately apparent to all workers just how much they fund our government. When that tax holiday expired, many would start to question whether they want their taxes spent on abortion, or other special interests.
- Here is a new one. Because it's too easy and makes a lot of sense. The dollars would have already hit the economy, as opposed to the 10% that has been spent so far.
So even if a tax holiday were proposed as the best way to stimulate the economy, it will never happen. And it didn't. Maybe next year? No, never.
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