5 Simple Ways to Jumpstart the Economy
Posted by Michael Kleen
By Michael Kleen
Martin Van Buren, our 8th president, once remarked, “The less government interferes with private pursuits, the better for general prosperity.” Those words were no truer when they were spoken than they are today. It is time for government to get out of the way and let us do our jobs. In that spirit, here is a list of five simple things government and we the people can do to put our country back on the path to prosperity.
1. Sales Tax Holiday. Suspending the state sales tax would immediately boost consumer spending. A sales tax holiday puts money directly into the hands of consumers and does it in a way that requires that they spend money to save money. According to the Peoria Journal Star, when Illinois suspended the state sales tax on basic school supplies for two weeks last August, consumers spent $323 million and saved $16 million. This year, citing the state government’s inability to stop its out of control spending, Governor Quinn cancelled a repeat of the holiday.
Sales taxes hurt low income families and, ideally, should be dramatically reduced or eliminated altogether. According to the Institute on Taxation and Economic Policy, a 6 percent sales tax amounts to roughly a 1 percent income tax rate for families in the highest income brackets, a 3 percent tax on middle-income families and a 4.5 percent tax on the poorest families. That is because, generally, wealthier families spend only one-sixth of their income on items that are subject to sales taxes, while low-income families spend three-quarters of their income on taxable purchases. Suspending the sales tax on food, clothing, and other essential items would bring much needed relief to consumers.
About Michael KleenMichael Kleen is an author, raconteur, and freelance columnist. He has a M.A. in History and M.S. in Education. He lives in Rockford, Illinois, where he was the 2013 Republican candidate for mayor.
Posted on August 15, 2011, in Columns and tagged Blue Laws, Buying Locally, Consumer Spending, Housing Bubble, Payroll Tax, Prosperity, Sales Tax, Tax Holiday, taxes. Bookmark the permalink. Leave a comment.