Listening to WOAI this morning on my way to take Bobbie to school, once again someone floated the economy-stimulating idea that we should take a year-long income tax holiday (usually this is floated as a withholding tax holiday, from what I have seen).
My thoughts on this are the obvious ones: 1) It would probably work and 2) It'll never happen.
I'm a huge supporter of the FairTax. I have been since I first heard about it on Boortz's show years ago--in fact, the only autographed book I own is the original FairTax book. It's fair. It's a truly progressive tax.
One of the chapters in the FairTax book is on the history of withholding. The authors make an excellent point in that chapter. Most Americans have no real concept of how much money the government skims off the top of their paychecks every week or two. Even if they look at the gross and then at the net & notice the discrepancy, it doesn't seem to incite much feeling. We accept these off-the-top taxes as par for the course. Because they are. Gross pay is a nice concept, but it's merely a concept. What we actually take home is what matters.
Of course, we actually work for and earn that gross amount. But we don't get it. We have no real expectation of getting it, so we have accepted the current system as inevitable. It seems as if it has always been that way, just as it seems as if Social Security has always been here, and Medicare, and television, and the polio vaccine. None of these things have even a century's worth of existence behind them, but we accept them as unchanging facts of life. Pillars of our society.
And that is why we will never have a tax holiday. Not even an income tax holiday, and certainly not one from all withholding. Because once the American people get the experience of getting their entire paycheck, they're likely to get attached to it. And maybe, just maybe, wake up enough to demand change. Not Hope'n'change™. Real, actual, substantive change.