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“The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.”     Milton Friedman

December 3, 2008

Gohmert’s Bailout Alternative: Convert Paulson’s Last $350 Billion into Tax Holiday

by Stephen Littau

From Congressman Louie Gohmert’s (R-TX) November 28, 2008 press release:

Gohmert is currently preparing a bill to declare the tax holiday for January and February of 2009 and is also gathering support at the same time. He said, “We can save more home mortgages, increase employment, and boost economic growth for a lower price tag with this plan than with any centralized bureaucratic program, all by giving the power back to the taxpayers. I am demanding that not another penny goes to executive bailouts, but these billions of taxpayer dollars should go to the taxpayers who earned them.”

According to American Solutions, a conservative think tank founded by former Speaker of the House Newt Gingrich, Americans pay $101.6 billion per month in personal income tax and $65.6 billion per month in FICA tax. Under Gohmert’s proposed plan, all of these taxes would not be paid during January and February of 2009, and the money would stay in the hands of American taxpayers – the ones who best know where economic stimulus should be targeted. Gohmert’s two month tax holiday would stimulate the economy while costing less than the remainder of the Paulson-Pelosi bailout plan.

Rep. Louie Gohmert (TX-01) has also recently proposed returning all 2008 income taxes to American taxpayers as a solution to boost the ailing economy, as he believes taxpayers, rather than the government, should be using their hard-earned money to choose the economy’s winners and losers.

Gohmert’s proposal may not solve all of our economic woes but I’ve got to say, I don’t hate it! Rather than the federal government write stimulus checks wealth redistribution checks, why not give the taxpayer a two month break from paying all federal taxes? It’s not as if the congress and the Bush/Obama Administrations are going to spend this money responsibly!

Radio talk show host Neal Boortz makes the following observation of the Gohmert plan:

Now this is a statistic that should shock you … Americans pay over $101 billion in income taxes and $66 billion in FICA taxes every single month. That means that if Gohmert’s plan went into effect, there would be over $330 billion in American pockets. That is money that you have earned and money that you can decide where it is spent or saved. You pick the economic winners and losers with your money – the government doesn’t get to do the choosing for you. The government can’t use it to pay executive salaries for failing companies or subsidize failing UAW contracts. The government won’t spend $50 million just to send every American a letter saying that their pithy “stimulus” check is on the way. That’s it … you just stop all federal taxes for two months.

Will it cost us anything? Well, no more than has already been pledged in the bailout bill. There’s $350 billion left there … this would eat up most of it.

Of course, the only way the Gohmert plan will ever see the light of day is if we, the people demand it.

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7 Comments

  1. Time to write a letter and fax it over to John Campbell (R-CA), my Congressman.

    I highly recommend that anyone who wants to send a letter actually type out (or hand write) and fax it to your representative. Emails are not nearly as widely scrutinized, and with all the federal postal inspection of letters sent to Congressmen, there’s no telling how quickly they’ll actually receive something you send in the mail.

    So fax it over if you want it be read and understood.

    I’m sure I’ll post my letter when I send it.

    Comment by Brad Warbiany — December 3, 2008 @ 9:09 am
  2. I am not impressed by this plan: without a reduction in government spending, it really won’t improve matters.

    On the other hand, I love the idea of returning taxes back to the people. Despite it being ineffective, I support it.

    Comment by tarran — December 3, 2008 @ 11:50 am
  3. How would a plan like this effect someone who files quarterly because they are self-employed? At the end of the year do you get like 1/6 of your taxes off as a credit or something.

    Comment by TerryP — December 3, 2008 @ 1:15 pm
  4. Despite it being ineffective, I support it.

    I usually don’t support bailouts that will be ineffective in solving the problem. But when it’s coming my way, I’ll take it. Especially when it’s my own money anyway.

    Comment by Brad Warbiany — December 3, 2008 @ 3:10 pm
  5. Tarran, I don’t think this will be effective economic stimulus either. I’d be willing to bet Gohmert doesn’t either. However, two whole months of no tax withholding will create one hell of a tax revolt in the third month.

    One of the biggest problems with tax withholding is it anesthetizes the taxpaying public to what they’re really paying in taxes. While ending withholding permanently is a non-starter, we might just be able to sneak a two months break past the taxaholics on Capitol Hill. It’s subversive. I like it.

    Comment by Quincy — December 3, 2008 @ 5:38 pm
  6. [...] this morning, Stephen Littau posted a novel idea by Rep. Louie Gohmert (R-TX) to use the $350B set aside for the 2nd half of the TARP program for a [...]

    Pingback by The Liberty Papers »Blog Archive » Gohmert’s Bailout Alternative: My Letter To John Campbell (R-CA) — December 3, 2008 @ 8:40 pm
  7. However, two whole months of no tax withholding will create one hell of a tax revolt in the third month.

    This is exactly why this will never see the light of day. When you’re strangling someone, you don’t loosen the grip.

    Comment by thomasblair — December 4, 2008 @ 9:54 am

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