By Willis Cook
While working on my income tax return (a Byzantine experience, by the way), I suddenly had an inspiration: how to fund the government and do away with income taxes altogether. And no, I’m not advocating a national sales tax.
Consider: the government is pretty experienced in stimulus programs. We have had three already. Here’s my idea: instead of the government providing stimulus money for states, businesses and corporations, why doesn’t it simply stimulate itself? Huh? Well, consider how stimulus works.
We sometimes speak in an off-hand way of stimulus programs being nothing but printing money. The government’s stimulus programs don’t print any money. Instead, the Federal Reserve allocates funds electronically to the various Federal Reserve banks across the country. Those banks in turn provide the money at reduced or no interest to the various banks in its region. Those banks then make the money available in the form of loans to businesses, municipals and individuals who will spend it, thus stimulating the economy.
So — just let the Fed put the money directly into the U.S. Treasury account — the account your income tax payments go to. According to the IRS the government took in $2.774 trillion in income taxes during fiscal 2013 and spent $3.454 trillion. Let’s not quibble about nickels and dimes and allow the Fed to stimulate the Treasury to the tune of, say, $4 trillion, which is probably more than it will get this year in income taxes.
Now, the government already has the money it would receive in taxes throughout the year, so it can just give back whatever tax money it has already collected. Stop all withholding and return any withholding already collected. In short, discontinue the income tax immediately. The government has already got its money by way of the stimulus, everybody in the country gets back any taxes they have paid and doesn’t have to pay any more. Talk about a win-win situation! And, as a bonus, the government can save whatever it costs to operate the IRS, which can be eliminated.
Well, you might ask, where does that stimulus money come from? Why it comes from the exact same place the other stimulus money came from — right out of [anatomical reference deleted by author’s wife], uh, let’s just say it’s an accounting entry. But wait, you continue, is this real money? Why, certainly it is. The previous two stimulus programs were real money, weren’t they? The government spent $152 billion in the 2008 stimulus, $787 billion in the 2009 stimulus and so far $1.19 trillion in QE3. Sounds like real money to me. Besides, if it is good enough for us, it should be good enough for the government itself. But what about the national debt? Look, did Obama mention the national debt even once in the State of the Union message? Debt is a non-entity
I know...I know: it just doesn’t sound right, does it? Sounds like money coming out of thin air That’s simply because you and I don’t understand national and international finance. This technique is firmly established both here and in Europe. It has a good track record, and has been applied quite a few times. I say let’s just ratchet up the program to the max. You know, sometimes I amaze even myself.
Willis Cook is a retired electrical engineer who was born in New Orleans and grew up in the Mississippi Delta. He lives in Franklin County.