Here's a Crazy Idea

There is a lovely little economic cycle that goes as follows:

1. Signs of bad economy leads to economic fear. This fear leads to lack of spending, as people save in anticipation of a potential rainy day. 2. This lack of spending causes the economy to grow even worse, as businesses go out of business, causing people to lose jobs. As the economy grows even worse, people spend even less, which then causes more businesses to go out of business, which causes the economy to grow even worse, as even more people lose jobs. 3. The cycle continues.

Here's a crazy idea: Give everyone who pays 1,000 dollars or more in taxes a 200 dollar tax credit, where if they submit receipts proving they spent up to 200 dollars on anything other than groceries or medical expenses (the two things people are most likely to spend on even during economic hardship, and thus that they would be most likely to spend on sans tax credit), in a retail establishment or restaurant anyplace within their zipcode or up to two zipcodes over in any direction, then they get to pay 200 dollars less in taxes. This might not seem like a lot, but 200 dollars from each tax-paying household in the area would probably add up for the businesses in question, helping them to stay afloat. If each household spent 200 dollars more - yes, cummulatively that would probably have a slight positive effect on the economy.

The only thing is, the money might add up for the government as well and cut into its coffers. In that case, why not make the money tax-deductible, as opposed to giving an actual tax-credit? This would be similar to donations, which are currently tax-deductible, up to a certain amount of money. This would be less expensive for the government - it is not giving people back 200 dollars; rather, when it calculates their income, it is calculating it as if they earned 200 dollars less - so if you income is 5,000 dollars, now you will only be taxed on 4,8000 of those dollars (in reality, if you earn 5,000 dollars you probably won't pay any income tax).

Our country faces tough problems and needs creative solutions. Unfortunately, given today's political climate, it is hard for such solutions to become laws.