Rep. Louie Gohmert (R.-Tex.) has proposed a very important tax-cut alternative to the Pelosi-Paulson big-government bailout plan.
Where the Pelosi-Paulson plan takes the taxpayers’ money and puts it under the government’s thumb so that predatory politicians and micromanaging bureaucrats have more and more control over the American economy, Congressman Gohmert’s plan puts the money back into the pockets of the American people and allows them to choose.
In the Pelosi-Obama model, Washington politicians and Washington bureaucrats decide which auto companies to save and with how much money in huge taxpayer-funded checks (bringing with them politician oversight and bureaucratic micromanagement in a manner guaranteed to kill entrepreneurial innovation and market-oriented flexibility).
In the Gohmert model of empowering the American people, you — not some bureaucrat — decide which auto companies ought to prosper by your decision about which cars you want to buy. If Washington wants to develop a better energy-environment strategy by having a tax credit for buying electric cars or hybrids or flex fuel cars, that changes the incentives for both customers and manufacturers but keeps the playing field fair and market oriented by letting you decide which product you want to buy.
In this citizen-empowerment model, you the customer pick the winners and losers and you have the power to decide where to spend your money and which innovations fit your values the most.
And there’s more: Under Gohmert’s idea, you don’t have to buy a car. If you need the money for your mortgage, a child’s college tuition or maybe even to save for a rainy day you can do it.
Rep. Gohmert figured out that the volume of money being thrown around by the U.S. Treasury, Congress and the Federal Reserve is so massive that it would finance a tax holiday for every working American.
Think of the scale of spending we are facing.
For the $350 billion second bailout installment Treasury Secretary Henry Paulson is going to request, every American taxpayer could have a two-month tax holiday from both income tax and the Social Security-Medicare (FICA) tax.
That means that for all of January and all of February you would pay no federal income tax and no FICA tax, which — for most Americans — amounts to about 33 percent of your gross income.
Furthermore, House Speaker Nancy Pelosi has proposed an additional $700 billion as a stimulus package.
That would pay for an additional four months of a tax holiday.
Thus, if you combined the Pelosi and Paulson proposals, you could create a tax holiday through June.
That would mean no working American would pay a penny in income tax or a penny in FICA tax for the first six months of the year.
And that would mean no business would pay a penny in matching FICA tax for the first six months of the year.
As a pro-small business, pro-jobs creation, pro-market stimulation measure, imagine the power of that much extra money in the hands of the American workers and the American entrepreneur.
Imagine how many more people could afford to keep their homes, how many people could pay down some of their debt, how many will be able to rebuild some of their retirement funds, how many people might find the extra resources to start a new business or expand their existing business.
Now that would be a stimulus plan that stimulates the American people. That is quite a change from the big business, big bureaucracy, big politician model we have seen in Washington recently.
Where Pelosi and Paulson would stimulate bureaucrats and politicians, Gohmert would stimulate American workers, American businesses and American productivity.
In the long run, we will get more economic growth and more revenue for federal, state and local governments from a growing economy with more creative businesses, more productive private markets, and more incentivized workers.
The Gohmert plan is a plan to get America growing again. It is not a bailout plan. It is an economic growth plan.
As speaker of the House, I helped balance the federal budget for four consecutive years and to pay off $405 billion in federal debt.
That was the first time since the later 1920s (70 years) that the federal government had four consecutive years of a balanced budget.
We balanced the budget by controlling spending, reforming welfare and trimming bureaucracies while cutting taxes for the first time in 16 years to increase economic growth and therefore increase government revenues from a bigger economy with lower taxes rather than weakening growth by trying to get more revenues through higher taxes in a smaller economy.
As a fiscal conservative committed to balancing the federal budget, I would not normally recommend a tax holiday on this scale.
However, when the alternative is a Pelosi-Paulson spending increase that is Washington-centered, politician-controlled, and bureaucratically micromanaged, the Gohmert plan is a dramatically better approach that will produce far more freedom, much less corruption, and return power and control back to the American worker.
Call your congressman and senators (202-224-3121) and urge them to sign on to the Gohmert plan for economic growth, smaller government, and greater freedom. You can also sign this petition in support of Gohmert’s plan.