2009-04-01 / Editorials

Cut Taxes To Boost Economy

Editorial

The scandals concerning bonus packages awarded to the financial product departments of insurance companies and executive "rest and recuperation" sessions at expensive resorts paid for with money freshly printed from the U.S. Treasury have given the bailout concept a bad name. We would like to suggest a modest proposal for the revitalizing of the economy of New York City and the nation at large that will put money back into the hands and wallets of consumers and the small businesses who serve them and will give the nation's economy a welcome and much needed boost.

We propose that all taxes on all levels— local, state and federal—be suspended for one year. For one year, gross paychecks for every worker in every industry will become net paychecks. That means: no withholding, no Social Security, no Medicare, no New York state, no New York City—no tax, period—will be taken out of any and every worker's paycheck. It would cost less than all these bailout schemes and would save us the damage being done to our economy. This measure would put money into the hands of people who can spend it. It will help everyone and will restore the economy faster than any stimulus package.

This sounds on its face a radical step, but we can think of few better measures to jump-start the nation's economy. One reason there is less money in circulation now is that most of the population is watching its spending. Eliminating taxes, in contrast, will encourage the average American to spend more than the bare minimum on more than just necessities. Spending will bring about increased demand, which will lead to reopening the factories and restarting the assembly lines where many of these goods are produced—often by American workers—generating jobs and, in turn, increasing spending, without doubt a desired result.

A year of relief from taxation at all levels would do more to stimulate the economy than any number of bailouts to specific industries and institutions. Judicious spending by consumers who have a lot more in their paychecks will lead to more jobs being created and more money in circulation. The economy of the United States can only benefit from such a move. The sooner a tax relaxation program can be put into effect, the brighter the economic picture will become. We urge governments on all levels to give this idea very serious thought as soon as possible.

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