Civil disobedience anyone?

[DoubleD]

Hypothetically speaking (of course - don't call the IRS)...what if there were a grass-roots movement by everyone...to stop paying taxes and stimulate the economy through OUR spending...not government spending. I am not talking permanently. Just over the course of one year to demonstrate to government that they just get in the way more often than not.

How would that affect the economy?

[cgcg]

It would revive it and bring it back to life, while offending Obama and liberals everywhere.

[Chief]

Obama's entire existence is based on spending YOUR money... what will the messiah do if the worshipers stop putting money in the plate?

[djdastin]

For the amount of money allocated to the current "stimulus" spending bill, Congress could allow every single US citizen to pay zero payroll and income tax for the next seven months.

[cgcg]

Wouldn't work. The reason is that the economy and government spending/programs are so fully entwined that you cannot simply separate them. To end government expenditures which are funded by income taxes would not only do away with social security and medicare, harming the oldest and most vulnerable members of society, but would also take paychecks away from members of the military, stop road and bridge projects, federal school funding, etc. The contractors whose businesses support federal projects would lose money, and they would lay off tremendous numbers of workers, causing further damage to our already fragile economy.

The reason the government funds these projects is because the private market fails to do so. There is no profit incentive to build a national security force or an interstate highway system. It would be a double-whammy, to lose the social benefits of the spending programs and also to lose the jobs that are associated with those programs.

Everyone hates paying income taxes. But we would hate even more if we lost the benefits we've come to expect from a functioning federal government. Maybe if we could go back in time and prevent the 16th amendment from ever being ratified.... but we can't. The question that stymies legislators and academic economists is not "should there be an income tax," but rather, "what tax level would maximize tax revenues?" (Sometimes a lower tax level paradoxically increases tax revenues. this is called a Laffer curve, if you want to look it up.) If you can answer this question, or provide a general solution to the problem, you will certainly win a Nobel prize.

[djdastin]

If people would actually go shopping and spend the money it would be the best policy and the government would do it so there would be no need for civil disobedience,. But income taxes are mostly paid by people who already have extra money and are the least likely to spend. Last spring when they sent everyone a check only about 1/3 of the money was spent and 2/3 was saved so it did not do very much to improve the economy. One of the proposals to stimulate the economy is to do away with payroll taxes for a year which would "cost" the government about 850 billion dollars. but even more effective would be to increase benefits for people who lose their jobs because they would spend the extra money

[snookumsnort]

I think people are overly cautious these days and holding on to their money. Even if we got a reprieve from paying taxes, I don't think anyone is going to increase their spending or spend on major purchases. The government has a lot of work to do with regaining the people's confidence back.

[Binkleywalker]

I just think its rather sad that now that things are affordable, no one can afford them

But you're right, it all boils down to confidence with everyone. Because if the banks aren't confident, and Wall Street isn't confident, consumers sure as hell won't be.