A Stimulating Alternative to Bailouts
by Tax credits as the best means to stimulate the economy, especially where the economy relies on capitalism.
In this scenario, the government is not involved in owning businesses but in helping businesses get what they need, namely, demand for their products. The best thing about this type of stimulus package is that specific industries can be targeted and different amounts of tax credits could be offered. Right now the auto industry is looking for their handout which would not result in the movement of inventory or the creation of jobs and instead the money goes to paying expenses. This is not only wrong it’s STUPID.
Under my stimulus alternative, there could be a tax credit of $5000.00 or more for the purchase of an American made car and for solar panels, house purchases, equipment, braces, dentures, durable goods, hardwood flooring, vacations, roofs, windows, electronics, furniture, 2nd homes, exercise equipment, hot tubs, additions, televisions, patios, siding, you name it. What’s more, you could implement it right away, perhaps this December and make it deductible this year, just in time to make the Christmas season, merry for everyone. And revenues to the government coffers which come in from sales, income and payroll taxes from this proposed stimulus package might be up enough to compensate for the decrease in revenues from the lack of sales, increasing unemployment, sitting inventories and business failures that we now face.
Wondering how it would work? Well, a tax credit goes right to the bottom line, so if after you fill out your tax return, you owe say $10,000.00 in taxes and you took advantage of the one-time tax credit for a vacation of $5,000.00, your tax liability would be only $5000.00 for 2008 or if you were filing as a couple and had a $10,000.00 tax liability and qualified for $15,000.00 in tax credits, then the government would owe you $5000.00.
One thing is certain, if we keep going the way were going, were going to see more businesses fail as the people continue to spend less and less which causes more unemployment and a greater constriction of the economy. Tax credits are a stimulating alternative to bailouts because they would cause a tremendous influx of cash to the economy at large and end the recession we are now living through.
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