Submitted for your approval...

AuH2O's Stimulus Plan: Triple the Personal Exemption

by AuH2O, Editorial Board Member, The Rapier.

We hear a great deal about Obama's plan to stimulate the economy out of rescession with a $850+ billion plan full of new federal spending, a great deal of which is grants to state governments. (More info on all that here).

This writer disagrees and proposes a far simpler stimulus: Immediately TRIPLE the current $3,650 per-family-member "personal exemption" in the tax code, and eliminate the phase-out on high income individuals. Change payroll withholdings on paychecks immediately. This requires NO new federal bureaucracy, and would immediately inject cash directly into consumers' pocketbooks.

A family of 4 currently gets to "exempt" (not count) $14,600 in income ($3,650 x 4). Under the AUH2O plan, that family would instead exempt $43,800 ($10,950 x 4). Working backward, that is something like an immediate $4,380 tax cut at a 15% marginal rate -- putting $365 per month back into the economy for each family. And this author hasn't done all the calculations, but Lord knows it couldn't hurt the deficit more than what's being proposed (not to mention TARP).

Because it is an exemption of earnings PER FAMILY MEMBER, it would help larger families more help, and presumably they are hurting more in this rescession. But with a direct flow of cash and no "phase out," it would immediately help those paying for groceries, college, mortgaqes, and those owners of independent businesses without anyone in Congress trying to decide how it should be spent.

Oh, and make it permanent, thank you very much, not just a temporary thing.

No this isn't as good as a flat tax, or even as good as an across-the-board cut in marginal rates for those on the right, and it doesn't directly help those who have no income which will disappoint the left, but liberals should like it because it helps families who breed with great frequency, and conservatives should like it because it takes the decisionmaking away from Nancy Pelosi, Harry Reid, and The One.

So there. Discuss amongst yourselves...

Respectfully submitted,

AuH2O