Would This Stimulus Idea Kill Charities?
This sounds like a genuinely new idea: stimulate the economy by multiplying the standard deduction by ten. Karl Smith explains (via Kevin Drum)
This accomplishes several goals.
First, it gets money into the hands of consumers. Its our helicopter drop.
Second, it avoids any debate later over whether this should be the new tax structure. No one is going to suggest that a standard deduction of 100K should last forever.
Predictable objections might include: (1) This is expensive; (2) In a balance-sheet recession, a lot of this cash will be saved rather than spent, especially since the gambit is so obviously short-term; (3) Tax cuts tend to be sticky, and this might create an expectation that we return in 2012 or 2013 with a historically high standard deduction; (4) Would this kill charities? The cool thing about donating money to charities (besides basking in the altruistic glow) is that you can itemize the deduction to shrink your tax bill. With a gargantuan standard deduction, there's less need to itemize, which means less incentive to donate. Other thoughts?