Both the Congressional Budget Office and the Heritage Foundation have recently documented how ineffective President Obama's proposed $900 billion and growing "Porkulus" political spoils spending bill will be at improving the economy. In a column today, Charles Krauthammer provided the "coup de grace" by decimating the fear promoting "urgency for pork now" arguments of the President.
As co-founder of Top Conservatives on Twitter, I am today proposing "The #TCOT Plan" as a far superior plan that will immediately revive the economy. I am laying out the key component of the plan here, and am asking members of #TCOT to provide their input on additional components of the plan in comments here on this blog and at The TCOT Report.
The plan is simple:
1. Immediately cut all personal and corporate income taxes in half for all 12 months of 2009.
This plan could be implemented immediately as follows:
1. All employers would be instructed to immediately cut the amount of Federal Income Tax withholdings in half, beginning in next pay cycle beginning March 1.
2. Corporations that pay income taxes quarterly would pay half their corporate taxes in their next quarterly filing, for the period ending March 31.
Lost revenue over the 2009 Calendar year would be approximately $800 billion (A full $900 billion less than the current version of PORKULUS floating through the Senate). This is based on 2007 Federal personal income tax receipts of approximately 1.2 trillion, and Corporate income tax receipts of approximately $345 billion.
The estimated $1.6 trillion of personal and corporate income tax receipts for 2009 under this plan would, on initial review, be cut to $800 billion. However, given the economic stimulative effect that tax reductions would have on the economy (as the famous Laffer Curve demonstrated), actual receipts under this plan would probably exceed $800 billion, though by how much we'll leave for Dr. Laffer and his colleagues to calculate.
Assuming about $3 trillion in actual Federal spending for 2009, set against about $2.7 trillion in projected receipts, we could anticipate the federal deficit under this plan would increase from about $300 billion to something less than $1.1 trillion.
The questions for #TCOT members to comment on are as follows:
1. How would you use the extra cash you received under this plan during 2009, and would it, in your opinion, improve the economy more than PORKULUS ?
2. What would be the best way to deal with the increased federal deficit envisioned under this plan ?
a. Cut spending across the board
b. Borrow the difference, just as President Obama would have us do with PORKULUS
c. Cut spending some, and borrow some
Please comment here directly. All comments will be posted in the comment section at The TCOT Report
I would also ask that you send a link with this plan to every Economist, Radio Talk Show Host, and member of Congress you know, and ask them the same, simple question:
Which plan will help the economy more ?
2. The #TCOT Plan