Focus Point - Holiday Tax BreakCommentary by Pete du Pont
December 12, 2001
I'm Pete du Pont with the National Center for Policy Analysis. Politicians love to come up with feel-good ideas that spread more good will than do actual good. A perfect example is a plan that's drawn some favorable attention in Washington to give Americans a one-month holiday from paying payroll taxes. The plan would suspend the 12.4 percent social security payroll tax that's split between employers and employees.
Sounds good, but it doesn't really do anything. The NCPA's Bruce Bartlett points out consumers aren't going to spend us out of this slump, because they didn't get us into it. Our problem isn't a drop in consumer spending, it's a drop in investment, and a temporary payroll tax break isn't going to fix that.
What will are long-term changes that increase the rate of growth in the economy, and that means lower personal and corporate taxes and less costly federal government regulation. People and corporations keeping more of their money and investing some of it will get us back on track. Of course, that's hard to do politically, and it doesn't have a smiley face. But it's what we need.
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont. Next time, beautiful music.