Source: The Wall Street Journal (behind paywall).
Economist Stephen Moore floats a proposal today that makes a lot of sense:
“Before President Trump suspended negotiations Tuesday, he and Congress were homing in on an economic stimulus plan that would cost some $2 trillion. That money would fund schools and hospitals, a bailout of mostly Democratic states and cities that have amassed large budget deficits, small-business loans, airline and Postal Service bailouts and $1,000-a-person payments to households. It’s a mishmash of spending that aims to inflate the economy for a few months.
“There’s a better way. Instead of spending the money, why not cut out the government middleman and not collect the taxes? In 2020 the personal income tax was expected to raise $1.81 trillion and the corporate income tax $260 billion, for a total of $2.07 trillion. For a little more than $2 trillion, Congress could suspend the personal and corporate income tax for a year.”
I doubt there is anyone in Congress willing to consider giving up control over federal cash flows for a year. But they wouldn’t have to. Congress was going to borrow the $2 trillion anyway.
Tidewater News and Opinion Forum 
“Congress was going to borrow the $2 trillion anyway.”
Funny, when Obama was President and the Congress was Republican it was Obama who was doing the borrowing.
A better idea than another massive tax break favoring the wealthiest people, why not try UBI instead? We might as well. The Trump economy has wrecked so many people that all the dog’s breakfast of programs designed to help are going to be busting at the seams anyway.
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RE: “why not try UBI instead?”
Because UBI is stupid economics. UBI is stupid economics because it severs the linkage between production (work) and consumption (pay). That linkage has always existed, and it works well to generate the greatest good for the greatest number.
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UBI does not cut the linkage between work and pay any more than stimulus checks, food stamps, rent subsidies, “Obamaphones”, farm subsidies, Medicaid, health insurance subsidies, TANF, EITC, school lunches, etc.
UBI is simply a more rational and less expensive way to ensure that every American has a roof over their head and food to eat. People would still be well-motivated to work for pay beyond the UBI in order to enjoy the better things in life.
And as for as what is “stupid economics”, that would be yet another massive tax cut for the wealthy when we have learned the hard way that such cuts do very little for the economy.
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RE: “And as for as what is ‘stupid economics’, that would be yet another massive tax cut for the wealthy when we have learned the hard way that such cuts do very little for the economy.”
How is the proposal a tax cut for the wealthy? Every worker has federal income tax witheld. The proposal would merely cancel the witholding.
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I cannot read the WSJ article but I assume your headline was accurate. The proposal is for 0% income tax for a year. Right? If it is, the bulk of this giveaway would go to the people at the top. That is the simple fact of the matter. As a reminder you people constantly point out that the richest people pay most of the income tax and call everyone else “free loaders.”
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RE: “The proposal is for 0% income tax for a year. Right?”
Nope. As stated in the quotation I shared, the proposal is for simply not collecting the tax. That would affect every taxpayer, not just taxpayers in the higher brackets.
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“Nope?”
You have totally lost me.
What is the difference between “simply not collecting the tax” and a “0% Tax rate.”
Of course it would affect everyone whose taxes are not zero already. But my characterization is accurate. The overwhelming bulk of this giveaway would go to the wealthiest. The people that need help the most would get nothing. It is a really dumb idea like most of the ideas this fellow floats. Or maybe it was a lame attempt at a joke? Let’s hope.
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RE: “The overwhelming bulk of this giveaway would go to the wealthiest.”
So, semantics aside, your beef is that the wealthiest would get a bigger benefit from the tax holiday than the poorest? Your beef is that the prgressive income tax is unfair?
I never figured you for a flat-tax advocate, but as it happens Moore does address your concern: “Liberals will complain that the benefit would disproportionately go to the wealthy. But the people who pay the most income tax are those who own and operate the businesses that employ tens of millions of Americans.”
Personally, I don’t care about the “fairness” of the benefit. If the proposed tax holiday helps business owners stay in operation, I’m all for it.
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Semantics aside?
You could answer the question or apologize for wasting effort and time with your knee-jerk obtuseness.
If there was ANY evidence in support of the so-called “supply side economics” that Moore has been pushing for decades there would be something to discuss. There isn’t.
Relief from the ravages of the Trump economy is not a question of “fairness.” It is a question of who needs help and who doesn’t. And who is going to use that help to kick-start the economy. Every economy requires people with money to spend and needs to satisfy. The rich already have money and ALL their needs are already satisfied. Giving them more has proven time and time again to be a feckless way to increase economic growth.
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When using a tax cut as a stimulus, you have to consider what impact that cut has on the taxpayer and what he will likely do with the boon.
An athlete or entertainer who pays $5million a year in taxes on his $15million income could have really scraped by OK on the $10million anyway. He might get a new yacht with the boon. or new airplane.
But a guy who makes $750K from his family HVAC company who gets to keep $250K more of that is impacted a lot more. It makes a BIG difference to him, and he will likely pay off debt or expand his business.
By comparison, stimulus checks given to everyone equally will not grow that business, and will most liley be spent on some imported consumer good.
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In the real world, evidence matters. We have tried the trickle down approach that you prefer – probably because it helps “starve the beast” – time and time again without significant success.
https://en.wikipedia.org/wiki/Starve_the_beast
These reports from your imagination are not evidence of anything except for the fact that you have a vivid imagination.
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Sounds like Stephen Moore is auditioning, AGAIN, for a job in the second term. The first audition fell flat. This one is even worse.
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“But a guy who makes $750K from his family HVAC company who gets to keep $250K more of that is impacted a lot more.”
Maybe so, but he won’t see much business if the unemployed aren’t buying his services anyway. The idea is to get money in the hands of consumers. If the middle and working classes are flush, then business owners do well.
The whole point of injecting money by either a tax cut or stimulus or UBI is to generate consumption from those most likely economically hurt. Tax cuts for the unemployed is fruitless.
Remember, these ideas are for a pandemic caused recession. People have to make the best of what they have if they are in the upper tiers. Expanding business is not going to happen if the customers are broke.
The service workers and others who are low income, often multiple jobs, dependent need the money just to eat and keep a roof over their heads. The HVAC owner will benefit if the worker can now afford repairs or products.
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Quit your job, invest $500,000 in mutual funds that return capital gains and dividends, the so-called “income” funds and enjoy nearly $80,000 in tax free (0%) money. Oh, and be prepared to eat peanut butter if Trump gets four more.
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