As Congress and Joe Biden slide toward another confrontation over the debt limit, Republicans again find themselves perplexed by the relative lack of public support to restrain public spending. Where you stand, they say, depends on where you sit. For most Americans, the taxpayer day of reckoning for the monstrous debt applies to other people. More Americans benefit from public expenditures than pay income taxes. That’s been true for several years, but the response to COVID-19 accelerated the trend.
The debt is the symptom of the real national emergency. Our system encourages people to underachieve and indulge indolence. As of April, more than 21 million Americans between the ages of 25 and 54 do not have a job because they do not want a job. An astonishing one in four working-age adults has now secured Social Security disability benefits instead of finding a job. Young taxpayers, with their low starting salaries, pay an insignificant share of income taxes. The social consequences of constricting opportunities for young people far outweigh the negligible benefit of the collected revenue.
The low-achievement youth culture explains delayed marriage, delayed childbearing, and millions opting out of both. Young people have increasingly drifted away from the workforce. And more troubling still, young people do not feel they have anything at risk if the country were to turn to communism.
The first decade of adulthood is too precious to be thrown away on victim culture, useless degrees, and video games. Studies have shown that what a worker earns in his 20s predicts his salary for the rest of his career. “Across the board, the bulk of earnings growth happens during the first decade,” write authors of a New York Federal Reserve study. The authors further note, “The plateau [in income growth after the initial gains] is profound: For the median group of lifetime earners, the average earnings increase from age 35 to 55 is zero. This makes the 20s look even more crucial than before.”
It is critical to our national survival to cultivate the next generation of entrepreneurs, tradesmen, and professionals. We need to create career momentum for these young people before it’s too late. We all know this to be true. A 25-year-old slacker quickly turns into a 40-year-old slacker.
This simple plan would supercharge the careers and businesses of young people with virtually no loss of taxpayer revenue. Even under the plan, working is still voluntary. A young person is still free to continue slacking during their youth. But peer pressure can be a powerful force for good. As their friends and peers earn and save tax-free, “fear of missing out” will quickly supplant victim culture.
Imagine an entire generation reaching their early 30s with entrepreneurial momentum instead of socialist envy. And these success stories would inform their children of the fruits of economic freedom. Success breeds success and undermines victim narratives. We need successful young parents raising children to restore a self-sustaining cycle of capitalists making more capitalists.
It’s a solution that’s staring us in the face, and it’s a two-for-one. First, it counters the popularity of socialism by increasing the number of living billboards for capitalism. Second, it reduces the demand on the social safety net while bending the revenue curve up. Whatever taxes are lost on the front end will be more than recuperated as the young people age out of the tax holiday into their peak earning years.
One might think that a young, successful entrepreneur might continue to vote for higher taxes and lavish public spending during his decade holiday from taxes. But this assumes that a young person who tastes success and prosperity in their 20s will plan to rejoin the ranks of the idle once taxes kick in on his 30th birthday. But this is not what will happen. These young people will soon realize that the elections of today will have consequences in their thirties. Their good habits and achievements will be worth protecting.
We will also hear that such a tax holiday will aggravate income and wealth inequalities. The opposite is true. High income taxes make income mobility more difficult as high earners find they receive less and less of each additional earned dollar. When you put the government in charge of deciding who gets rich, the same connected players always win the game.
If you’re a young person who feels boxed out of the benefits of a free market, why should you support the system? If you want young people to support the system, make the benefits of a free market accessible and tangible. And when their tax holidays end, they will no longer consider wasteful government spending to be an abstract problem that doesn’t affect their lives.
If only 10 percent of the idled youth rejoined the workforce to take advantage of the decade of no taxes, the program would soon pay for itself many times over. People who might have made a career out of bong hits and social justice suddenly learn how to make enough money to support a family and save for retirement. No taxes are collected unless the slacker gets off the couch. So let’s create an incentive.
It’s difficult to imagine a rational argument in opposition to the proposal. The only people who could possibly oppose such a commonsense solution to our crisis are those that want or benefit from disaffected dependants. Such people enjoy watching footage of riots in other people’s neighborhoods.
Unfortunately, these people hold much power over legacy media, so we can anticipate some logic pretzel claiming such a plan would somehow harm minorities. Such people are already passing on their wealth without taxation through trusts and gifts and do not want their private clubs and luxury retreats polluted by unwashed new rich. We should not be setting policies to please those cynical vultures.