President-elect Barack Obama is making the same noises about the economy that George Bush made. He believes that the way to fix the economy is that we should all spend our way out of recession. He believes that the Federal Government must do something to bring the economy back from recession.
The Congress of the United States has already committed to overspend their income this year by over $500 Billion dollars. Now, it is seriously considering adding hundreds of billions of dollars more to their profligate spending.
Obama is proposing a tax break of about $300 Billion, and a total package of about $800 Billion.
But does this make any sense?
You know from past experience that Congress will add much more spending to any bill that passes a vote. Look at what Congress did recently in the $700 Billion bailout of the financial companies. They added on another $150 Billion in pork-barrel spending to the total amount. Much of this extra $150 Billion was, in essence, extortion money. Congressmen would exchange their vote on the bailout for a small concession to be added to the main bill.
If you think that Congress won’t do the same in this stimulus package, you are naïve. However, even if they did not add more, it’s still $800 Billion in new spending, and they already know that they don’t have that amount in the Treasury. They’re just going to print up the money and flood the economy with worthless money. That will eventually cause inflation.
How about a solution to the problem that will actually help the entire economy from top to bottom, and does not cost the American taxpayers or the Congress ONE DOLLAR to administer? How about a solution that helps every American worker, from the minimum wage kid flipping burgers to the most wealthy individuals?
The solution is to abolish the income tax.
IRS Statistics of Income Bulletin, Fall 2008, states that the total amount of income tax collected in 2006 (the most recent year reported) was $1,023,920,000,000. That is a little over one trillion dollars. But with the recession, income tax revenue has plummeted.
Congress is already beginning negotiations to give tax breaks of $300 Billion, and more stimulus checks sent from the Treasury, for that total of $800 Billion. If Congress simply abolished the income tax, no processing costs for the stimulus would occur. No checks would have to be written. No tax breaks would have to be calculated by taxpayers. The Treasury would incur no costs whatsoever in collecting income taxes and then issuing stimulus checks. The Internal Revenue Service could be dissolved, further saving billions from its operating budget.
In addition, vast amounts of tax preparation time, already required by individuals and businesses, would vanish. The employers of America would no longer be required to act as the collections agent for the IRS by withholding income taxes.
Can you imagine what a lift to the American people it would be for the income tax to be repealed? Obama would instantly become the most popular president in the last 100 years.
So, the solution is simply this: Instead of collecting the tax and then giving back some of it to American taxpayers, stop collecting it altogether. The numbers just about balance out, and liberty and freedom get one in the Win column.