Tax Credits for Troubled Times

If anything is certain after the death of a Walmart employee in New York City on Black Friday by crazed shoppers trying to save a buck, it’s the need for tax credits. If the government gave us a $5000.00 tax credit towards the purchase of electronics this Christmas, chances are people wouldn’t have needed to scramble or in this case, trample another human being, to save that extra hundred or so. The versatility of a tax credit is that it can be targeted to have the greatest impact, and as I explained in “A Stimulating Alternative to Bailouts” which can be viewed at www.courierpostonline.com specifically in their blog section, it gets people off the fence and into the stores. Let’s face it folks, the oil of Capitalism is spending and not saving and as soon as our government realizes this, it will stop providing a bailout and begin the 2008 Tax Credit program.

If there was one thing that Senator Obama learned, it was that he needed people to win and in this dragging economy, people again are the answer, but people are not spending you say and people are unemployed. Other than the unexpectedly high purchases this Black Friday holiday, people are not spending because there is no incentive to spend in this economy and the tax credit provides the incentive. The beauty of the credit is that it provides the fuel or the reason for people to spend, because for every dollar of qualifying tax credit they accrue, they will save the same on their tax liability. In essence, people will be spending their way to pay lower taxes come tax time. Right now we have the month of December to get people off of the fence and buying everything which could be tied to a credit, be it a new car by the big 3, furniture, carpeting, electronics, home purchases, durable goods, flooring, etc. The government could decide how much of a tax credit to give and where to direct these credits to have the greatest impact on the economy.

Remember, Senator Obama said he was in favor of helping out the tax payer rather than Wall Street and what better way to help the tax payer than to give them a reason to save money on their taxes. Since Senator Obama said the stimulus package he is going to propose is big, why not give us, the American taxpayer a big tax credit like up to $15,000.00 per household and $5,000.00 or more per individual this year. And, because the majority of Americans are against bailouts, the tax credit program should receive high accolades from both the people and the government. If you’re wondering why this is more beneficial than bailouts, I’ll tell you. The bailout gives the money to companies to squander; the tax credit gives the people, the consumer, the ability to spend money and receive a benefit for doing so in the form of a tax credit. It’s effect could be felt immediately, because it can be implemented right now, probably for the month of December and if it really works, could be extended for as long as possible. The ramifications can be easily tracked and benefits assessed on a monthly basis by monitoring sales and employment figures among other things.