Shadegg’s grand plan: Suspend income taxes

Give Rep. John Shadegg (R-AZ 3) credit, at least, for thinking big.

Shadegg wants nothing to do with an auto industry bailout, but he has a grand plan for bringing the economy around.

He wants to eliminate most income taxes, at least temporarily. “While I would favor permanent tax relief, I also believe a substantial tax holiday will do more to stimulate our economy than another taxpayer-funded bailout,” said today in a press release.

Under legislation he proposed Wednesday, individuals making less than $125,000, or couples making up to $250,000, in 2008 would owe no income taxes. Those making more would be a 5% tax break.

Naturally, Shadegg doesn’t say how much this taxpayer bailout would cost, but he asserts that his plan or an alternative proposal to suspend both payroll and income taxes for the first six months of 2009 “would cost dramatically less than the bloated $7 trillion bailout packages peddled by congressional Democrats and the Bush Administration.”

The idea is to let taxpayers decide, through their spending, which business live and which die. His press release doesn’t say which government services and departments must die when hundreds of billions in income tax revenue is jettisoned.

Nor did he adequately explain why he voted against the auto bailout bill when, just a month ago, he explained his vote for the Emergency Economic Stabilization Act, by citing auto industry jobs, among others:

“Make no mistake, the vote today was about Arizonans losing their jobs,” Shadegg said on Oct. 3. “I have spoken with small business owners throughout our state, and they are deeply worried. Several have told me that they cannot currently get credit and they do not believe they will be able to pay their employees next week. Automobile sales plummeted by 27% last month and the drop will be double next month—salesmen and mechanics will lose their jobs. Manufacturers cannot get the materials they need unless they pay in cash.”

This Shadegg plan to save jobs is a grand-but-harebrained plan which has no chance of adoption. Memo to the Rep: Come back to reality and get the hell back to work on realistic ways to shore up the economy.

Shadegg has a blue-sky buddy in Rep. Jeff Flake (R-AZ 6), who also opposed the auto bailout, calling it “simply a very expensive way of delaying the inevitable.”

"With the appointment of a 'car czar,' this legislation is a perfect example of what Friedrich Hayek called the 'fatal conceit' -- the belief that elected officials and bureaucrats can outguess millions of decisions made by independent actors in the marketplace," Flake's post-vote press release said.

Bottom line on Shadegg and Flake: They’re all for letting the market decide. I wonder if their faith is based on the relatively regulation-free environment of market decisions in recent years. Permit me pause before genuflecting to their tainted god of unfettered, crap-shooting capitalism.