The Homa Files

I often remind my students of “Homa’s Rule of 3”.

Simply stated, if you can get somebody to do something – practically any thing – 3 times … then, you got ‘em.  Their behavior becomes – more or less – habitual.

Get hen to eat at your restaurant 3 times.

Get them to use your credit card 3 times.

Bam.  You got ‘em. You’ve got a (loyal) customer with a habitual behavior.

How does that apply to the payroll tax holiday that causing such a fuss in Washington these days?

Easy.

2011 was the first time.

2012 will be the 2nd time … mark my words.

Then what will the 2012 electees do – “raise taxes on 150 Americans”?

I’ll take the under on that bet.

So, the payroll tax holiday will be continued for a 3rd year  … Homa’s Rule of 3 kicks in and it’ll be extended to a 4th … and so on.

So what?

Zero evidence that a payroll tax holiday stimulates the economy.

But, for sure it makes Social Security’s “unfunded obligations” go up and up … year after year.

That’s a problem.

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Tags: Homa's Rule of 3, payroll tax

This entry was posted on December 22, 2011 at 6:43 am and is filed under Taxes. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.