Wednesday, November 11, 2009

Tax Break

So, we've tried Cash for Clunkers.  And we've given free money to new home buyers.  I have another idea to stimulate the economy...

Let's enact a tax break whereby recent graduates, now claiming themselves independent, can get a one year tax break while they get off their feet and on their own.

I was not naive.  When I got my first job after graduation and began calculating my budget I adjusted for taxes upwards of 25% of my salary.  I knew what kind of lifestyle I would be able to afford.  Still, it was a shock to see nearly 30% of my salary (apparently I underestimated my taxes originally) gone before it hit my bank account.

Today, most graduates have to pay rent, car insurance, gas and electric, groceries, cable and internet, and student loans. Let us also not forget about gas to and from work, as well as set-up costs (like furniture and kitchen accessories).  Additionally, none of this includes extraneous expenses like movies or traveling to stay in touch with friends from college who moved to wherever. The life of a college graduate is very expensive.
A tax break for graduates not only allows our young work force a chance to get off their feet, but it should greatly stimulate the economy.  Unlike older Americans who tend to be established and more focused on long-term financial well-being, graduates are more likely to spend (to pay off student loans, buy furniture for his/her new place, dinner and dates, etc.) rather than save excess money, thus reinvesting it into the economy. 
 
 
This may be a side-note, and I'll probably vent about this later, but let's not forget that the young workforce of American is investing in a social security program that they may never benefit from.  Maybe that one-year tax break will allow those new graduates to start saving for their uncertain future.

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