Taxpayer Jubilee?

Taxpayer Jubilee? December 1, 2008

Here is a bailout we could all get behind. In the words of Jonah Goldberg:

But rather than blow money on a lavish reenactment of the New Deal, or continue bailing out undeserving corporations, why not really think outside the box? Rep. Louie Gohmert (R., Texas) suggests an across-the-board reprieve on paying 2008 income taxes. This would leave an extra $1.2 trillion in the hands of Americans, who are the best stewards of their own money. Nobel Prize-winning economist Robert Mundell proposes a one-year moratorium on corporate income taxes in order to stimulate investment, job creation and the like. That wouldn’t be as popular, for understandable reasons.

The details can be negotiated, but this sort of approach would certainly create more jobs and spur more consumer demand than paying for a lot of asphalt. It would buy a lot more prosperity than any corporate bailout. Politically, it could buy Obama and Congress a year to formulate a serious tax-reform proposal. And — here’s the amazing part — it would be much cheaper than what we’ve spent already.

Think about that! A tax jubilee would put big chunks of cash back in peoples’ hands. In many cases, it would be enough for a down payment on a house or new car. Or people could save it or pay down debt or invest it. That would bailout the housing industry, the automobile industry, the banks, and the stockmarket. And think what this would do to the national mood.

Barack Obama is promising something dramatic to deal with the economic downturn, so who knows? If he forgave all income taxes for a year, his popularity would be off the charts, even with conservatives.

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  • Fat chance.

    Democrats never met a tax they didn’t like.

  • Joe

    This is a great idea. One that everyone should be able to get behind.

  • Steve Rowe

    Hello Glen

    I found you’re Blog about a year ago when I was looking for info on the Issues ect Controversy. I stayed because I found your idiosyncratic Lutheran take on culture (both high and low) to be refreshing and informative. I have however noticed that in the last few months I have been visiting your blog less and less. I think it has to do with the recent shift away from culture and theology to more conventional politics. You are of course free to blog about what ever you want but I miss your cultural commentary. The web is full of right wing political blogs we don’t need another one.

    God Bless

    Steve in Toronto

  • Awful idea. You see, we still take the money out of the economy in the form of debt, and quite frankly, economic progress thrives as much on consistency as it does on low tax rates. (keep in mind that the effective tax rate is the SPENDING rate….all that money needs to come from somewhere!)

    Simplify the tax code? Great idea, unlikely with Obama. Reduce taxes? Great idea, not going to happen if Obama keeps his pledge to repeal the Bush tax cuts. (families will get hit HARD by that one) Tax holiday? Awful idea.

  • Don S

    Bike Bubba @ 4: I think the point was that it’s a better idea than blowing $1.2 trillion on bailouts, as we are presently doing. In that context, if the choice is either A or B, then B (tax holiday) is a much better option than A (bailouts). The nicest thing about it is that it stimulates the economy by rebating the producers, rather than taking money from the producers (or rather, from the producers’ children, grandchildren, etc.) and giving it to the deadbeats (Wall Street brokerage firms, banks holding subprime mortgages, etc.)

    Of course, in a vacuum, a tax holiday without offsetting spending cuts is an awful idea, as you suggest. My solution — bring on the spending cuts!

  • Don S

    Steve Rowe @ 3: Who’s Glen? By the way, if you read this blog regularly, you will note that there are still plenty of posts on Lutheran issues and cultural issues. We just came through a very intense political campaign, as well as a historic economic crisis, so obviously those deserve attention as well.

  • Is this post supposed to be serious? I know, why doesn’t the government just print a whole lot of new money and mail $1000 in cash to every man, woman and child in America. That’s a promise we haven’t heard, since, well, Jesse Ventura. I guess our military will continue to run free of charge like it always has.

    Sorry for the sarcastic tone, but I’m still kind of reeling from the sheer half-bakedness of this idea. I had thought this blog was a cut above.

  • Don, it goes farther than that. I’m saying that a “holiday” from taxes, even offset by spending cuts (and dream on for that one with Obama!), is a horrible idea because it sets the precedent that the tax code can be modified in real time for political expediency.

    In other words, it tells people and businesses that the way to make ends meet is to get 51 Senators and 418 Congressmen to suspend taxes. That wreaks havoc on economic calculation–it’s a bitter poison pill for the rest of us.

    Simple taxes, yes. Low taxes, yes. Dropping taxes when it seems expedient, NO.

  • Will

    I agree – this is a horrible idea. Now, I prefer this to bailout checks, but our deficit is HUGE.

    It’s plainly irresponsible to do such a thing – our government’s budget is 90% devoted to things that no one wants to cut.

    Printing money is not a solution.

  • Printing money is no solution.

    If they print me up $500,000 in $20 denominations and mail it to me (and hurry). I will attempt to prove that point.

  • kerner

    “our government’s budget is 90% devoted to things no one wants to cut.”

    Will @ 9:

    Right, and they should ALL be cut anyway. Simply freezing compensation for Government employees (yes, even the military) for 2 years, and I mean EVERYBODY, would do wonders. Plus, reduce the compensation of all federal employees making over $150,000.00 by 5%, all making over $200,000.00 by 7.5% All making over 250,000.00 by 10%, and so on. OOOOOHHHH, but a lot of “quality people would quit their govt. jobs :~(. So the hell what! 1) I don’t believe that that many would leave, and 2) somebody would take those jobs and do them just as well, trust me. And of course, we could freeze hiring for a year or two. Cut Govt. employee’s vacation time (e.g. nobody working for the taxpayers gets more than 3 weeks vacation; why should we pay these people for not working?), and eliminate a couple of holidays. Get rid of all that vacation time and holiday time, and more could get done with fewer people.

    Freezing all entitlements at current levels for 2 years (no COLAs, we are in a recession, so the cost of living is going down) would help alot too.

    Government waste is alot easier to find than you think, too. People say earmarks are not much of the budget, but I think there may be more than is aknowledged. In Milwaukee, we recently passed a measure to spend over $600,000.00 (95% of which was federal highway money) to buy bike racks for our busses. The theory being that cyclists will ride their bikes to the bus stop, hook their bikes to the bike rack, ride the bus for a while, remove their bikes, and pedal away. The chances of anybody doing this are very slim, but we spent the money anyway. It came out that many smaller transit systems in Wisconsin have already done this (and [SURPRISE!!] nobody is using them). So here’s what’s happening. Somebody who manufactures bike racks has contributed to the campaign of a congressman. And that congressman has made highway funds available to every county transit system from Maine to San Diego to buy these things. The local counties think they’re getting a great deal because they only have to put 5% of the cost into it, and presto! Hundreds of millions, maybe billions, of tax dollars disappear into the pocket of a guy who makes useless objects. And this kind of thing is all over the federal budget. It’s not just obvious things like “bridges to nowhere”.

  • A part of me really likes this idea. We pay about $30K in taxes every year and could really use that for a downpayment on a new home in Grove City, PA. I think that is an amazing amount of money for folks in the middle class. Heck, we could support a struggling family with that money!

    “Get rid of all that vacation time and holiday time, and more could get done with fewer people.” The last thing we need are fewer vacation days. Americans are among the most stressed out people in the world. Government workers are not treated well and we don’t want to encounter cranky stressed out, overworked government employees after standing in line for 3 hours at the DMV.

  • RhetoricProf

    Brilliant! You’re illustrating absurdity by being absurd!

  • kerner

    Sarah @12

    Government workers are treated better than private industry workers. They get more vacation time (often up to 5 weeks paid), more paid holidays, sick time they can save up and cash in when they retire (this can give a retiring govt. worker the equivalent of several months pay when he cashes it in), better health benefits, and often a much better retirement program. They also get raises every year whether they produce any more or not.

    And there are way too many of them. If there exists an OVERworked government worker in this country, I have not encountered him/her.

    And, once hired, they are almost impossible to fire.

    Trust me, if you got to keep the $30k, encountering a DMV worker (who is having to shoulder the additional stress made necessary by having to work on Presidents’ Day) would be a small price to pay.

  • Kerner (@14), I’m sorry that you have only encountered lousy private-sector jobs and/or lazy government workers.

    But your broad smear of an entire class of vocation doesn’t exactly ring of love in the 8th commandment sense.

    My mom’s a government worker, and I doubt you’d make the same claim about how much she works to my face.

  • kerner


    My wife, my sister, my brother-in-law and my son-in-law are government workers, and I would say it to THEIR faces. Their benefit package IS better than you can get in the private sector. So is their vacation pacage and their number of paid holidays (well, my wife is hourly only, so this part is too much of a generalization).

    More importantly, read what I wrote. I didn’t say government workers were lazy. I said they were well treated (better than private sector workers) and not overworked. In my opinion, a great many are less productive than they could be if they were not given so much time off with pay (which I would think is pretty obvious).

    Nor did I say that private sector jobs are “lousy”. I am self employed, which is the ultimate in the private sector. Nobody EVER pays me for not working. But employees of private sector jobs have to compete in the marketplace, and I believe, generally, that puts more pressure on them to be productive. I have to admit that a problem with many government jobs is difficulty coming up with a way to objectively measure productivity. Say you work at the window of the DMV. You have no control over who comes to your window or what their problems are, or whose fault it is if you can’t solve them.

    But whatever the measure may be, any government worker is likely to produce more if he gets 3 weeks of paid vacation instead of 5, and 6 paid holidays instead of 12.

  • Don S

    I was a government (federal) worker for 8 years, and at the time, I would have said it to my own face. 🙂 Government unions discourage productivity, and discourage any one employee from standing out. They hate merit-based compensation. We started with 13 days of paid vacation, and received 20 days (4 weeks) of paid vacation after only three years of service. The maximum was 26 days, which I believe was earned with 10 years of service. We also received 13 sick days each year, and 10 paid holidays.

    The real problem with the government is that everything they do is either a monopoly or coercive. I laugh when they call their constituents “customers”. Do you feel like a “customer” in the DMV? Would you choose to utilize the services of the DMV if you had a choice? How about the IRS? Because the people they work for are very unexcited to be “customers”, government workers tend to be very unexcited to serve them. Sometimes it feels backwards (the customer is “serving” the employee).

  • I think rather than cutting their vacation time, we ought to put more energy in increasing everyone else’s. TO quote my Norwegian friend, “Two weeks? What can you do in two weeks? No wonder Americans have so many heart attacks.”

    My dad worked for the postal service and it was an enormously stressful job. He said that he understands why people go nuts.

    I thin we need to be more compassionate. I’d want to kill myself if I had to work at the DMV.

  • Kerner, I was replying to your saying (@14) “If there exists an OVERworked government worker in this country, I have not encountered him/her.” In defending that comment, you said (@16), “I didn’t say government workers were lazy.” I suppose that’s technically true.

    But if I met your family and later remarked to you that “If there is an attractive woman in your family, I didn’t meet her,” defending that remark by saying, “Hey, I didn’t say your wife was ugly,” I think you’d still have reason to be upset. The obvious reading of your statement (@14) was that government workers do not work hard. Even if I assume, as you insist, that you meant only that they all work the exact right amount (neither “OVERworked”, nor “lazy”), it still sounds like you’re calling most of them lazy.

    You also said (@16) “Nor did I say that private sector jobs are ‘lousy’.” Indeed, what you said (@14) was that “Government workers are treated better than private industry workers.” Period. No qualifiers. Which means that you have never encountered any private sector employee with better benefits than any government worker. Which caused me to infer (@15), logically, that you had “only encountered lousy private-sector jobs”.

    “Nobody EVER pays me for not working.” Depends how honest you are in billing. I’ll assume you’re fine, but don’t fool yourself into thinking that the self-employed don’t get paid for not working. The IT contractor we pay gets billed in increments sometimes much longer than the actual work he does, which is a style of getting paid for not working. And as anyone with an internet connection knows, those in the private sector are very adept at getting paid for not working.

    “Any government worker is likely to produce more if he gets 3 weeks of paid vacation instead of 5.” By that logic, the most productive person would get no vacation whatsoever.

    Do you think that there is no value in vacation? What are the three most productive countries in terms of value added per hour worked? In order, they are Norway, the U.S., and France (the latter two being close). Are those the three countries that work the most per year? No. Respectively, they are the #22, #7, and #21 countries in terms of annual work hours. Longest-working does not mean most productive or most efficient.

  • kerner

    tODD, I don’t want to belabor this, but I want to be clearer than I apparently have been. I wrote OVERworked, with the over in caps. I meant to convey that Government workers may work hard, or they may be lazy, but I do not believe that government workers are overworked. This is not to say that none of them are hard workers. My son-in-law, for example, is always happy to take overtime when it’s available. There can be job pressures not related to workload or productivity, such as politics, that cause stress in government work. But the compensation package government workers get can hardly be translated into being treated badly.

    A few years ago in my community the county board passed a retirement package that got no attention from the voters until it was too late. Under it, long term board members were entitled to retire with lump sum retirement packages of $500,000.00 or more PLUS $40,000.00/year pensions PLUS health care. To vote themselves this, the board had to come up with a retirement formula that would apply to all county workers, so all higher level long term county workers were becoming millionaires upon retirement. It was a huge scandal, and a lot of board members were voted out, but once given, the retirement benefits could not be taken back, so every so often we still hear of a payroll accountant or something retiring as a millionaire at public expense (while all the while the county is crying that it can’t meet its budget and that they have to raise our already high taxes to make up the shortfall).

    I don’t mean to insult you or your family, tODD. And I may have used a little hyperbole in my earlier comments. But, You just aren’t going to get me feeling sorry for the poor mistreated government workers of America. I think that the great majority of them have it pretty good.

  • Sarah’s comment #12 illustrates well why this is a bad idea. In one year of being tax-free, things might look pretty good.

    Now, consider a church looking to hire her for a sculpture wondering what next year’s re-imposition of taxes is going to do to offering revenues. The uncertainty of what will happen with taxes would wreak havoc on discretionary spending.

    Like offerings, purchases of art, and so on. It would be a huge blow to our cultural institutions, to put it mildly.

  • Don S

    Interesting point, Bike Bubba. If folks had no tax liability, and thus no tax advantage for their charitable giving, would giving decrease, even though they are actually wealthier? Sad to think that it could be so.

  • Pete

    Kerner, every man and woman in uniform killed since the Revolutionary War was a government worker. Were they overworked?

  • kerner


    No, they were killed, as they heroically gave their lives for their country. And this includes my father’s cousin and my younger brother. And it could someday include some of my children, so don’t think I take this lightly.

    But if you want to discuss the efficiency of the military bureaucracy, you won’t find them much different from any other government workers.