(Tax) Holiday anyone?

Consider these statistics:

• If you are an average American, you will work roughly 4 months in 2009 just to meet your federal, state and local taxation obligations for this next year. If you work a 9-to-5 job, it will be noonish before you start putting money in your pocket for today's work.
• The federal government has already guaranteed $8.4 trillion in support to prevent major American companies and institutions (and the economy) from collapsing. That's $8,400,000,000,000. That's over $27,000 for every man, woman, and child in the U.S.
• The $8.4 trillion already guaranteed does not include the stimulus package that Obama is rumored to be concocting, along with (now-)fellow Congressmen and women. Estimates put this stimulus package in the neighborhood of $500-700 billion.
• It is likely that the federal deficit will approach $1 trillion in fiscal 2009, nearly doubling its current levels.

Add that all together, and that's a lot of outlay in the next 12-16 months from the government. Prior to this current crisis, the federal debt stood at about $10.4 trillion. Add the current guarantees, the stimulus plan, and 2009's deficit to that, and $20 trillion flies by as if it were standing still. Compare that with the roughly $5.5 trillion mark that the debt stood at when Bush took office. A quadrupling in ten years.

So what does any of this have to do with holidays? Beside making one feel like taking a long and sunny one, free from the cares of the world, it refers to a unique idea put forth by Congressman Louie Gohmert (R-TX). Mr. Gohmert has proposed a two-month income tax holiday for American families.

Gohmert has noticed, as have many others that, while $350 billion of the original $700 billion economic stimulus package (Troubled Asset Relief Program--TARP) has already been doled out to ailing financial institutions, the original problem is still present.

The TARP legislation was supposed to free up credit and get the stuck wheels of our debt-based economy moving again by taking bad loans off the books of large banks. With no more bad debt weighing down their balance sheets, these banks could feel better about making loans to needy businesses again.

Unfortunately, that has not happened. Credit is not flowing. Banks that have received support have either held onto it to mend their own fiscal situations, or used it to purchase other banks either to position themselves to benefit in an upturn or to hedge against their ailing portfolios.

So here we are with $350 billion left, having already spent the same with little to show for it in terms of an economic quickening. Should we stay the course and send the remaining billions to the financial institutions? It has been said that the definition of insanity is doing the same thing again and again, expecting a different result.

Why not try something new? We've pumped $350 billion into these private, for-profit institutions. Why not pump the rest directly back into the economy, via the American taxpayer?

Would you not welcome a two month holiday from paying income taxes? For the average taxpayer, that would equate to about $2000 in their pockets over the January-February timeframe. Could you use $2000, tax free?

What would it cost the government? $350 billion is a drop in the bucket compared with what they've spent already. Plus, it's already been appropriated.

What would the gains be? Legion. Two months without having to pay income taxes would, among other things:

• Alleviate much of the paycheck-to-paycheck burden for those families that are feeling a pinch right now.
• Convince people to open up their wallets for this holiday spending season (if the promise of such a move is communicated quickly enough).
  
• Allow people who are on the borderline to catch up on a few of those delinquent bills and get the collectors off their backs.
• Allow people that are on more solid ground to commit to that big-ticket purchase, or return to dining out, or continue whatever spending habits they have put on hold.
• Allow people to put some money into savings, which will help to steady the teetering banks who desperately need something in the asset column.
• Allow people to put money into the stock market and position themselves for a long-term gain (despite what anti-free marketeers are trying to scare you with, the stock market will return to higher ground, as it always has).

Private business and banks have received well enough of their due when it comes to handouts from the federal government. It's high time Congress put this recovery in the hands of the people.

If you like the idea of a tax holiday for yourself, I encourage you to contact your Congressman or Congresswoman and ask them to take a considerate look at Mr. Gohmert's idea.