There are plenty of income streams we could tax in theory but don’t, usually for good reason. We don’t tax welfare benefits, for instance, even though they are technically income, because it would be pointless to give support to the poor with one hand and take it away with the other.
Stimulus relief falls into this category. Last August, Utah’s legislature wisely decided not to tax federal stimulus checks given to individuals. It would have been a bit circular after all to tax relief that originates from the government, sort of like charging your child rent if she comes home on the weekends — when you’re the one paying for her room and board at school in the first place. It’s just inefficient.
Troy Keller, author of the DNews OPED joins Rod at 4:20 to discuss the tax.
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