Friday, May 22, 2009

Grayson Again

Reason (via Instapundit) alerts us that Rep. Alan Grayson (D-FL) has returned to the spotlight with a bill that would institute mandatory vacation time: the Paid Vacation Act. Here's a rundown of the particulars:
The bill would require companies with more than 100 employees to offer a week of paid vacation for both full-time and part-time employees after they've put in a year on the job. Three years after the effective date of the law, those same companies would be required to provide two weeks of paid vacation, and companies with 50 or more employees would have to provide one week.

The idea: More vacation will stimulate the economy through fewer sick days, better productivity and happier employees.
As Reason points out it's a dumb bill. I'll add that "the idea" that it will stimulate the economy is pure claptrap. Stimulating the economy is what we have greenbacks for and with employees being compensated with more vacation time they will necessarily receive lower pay than they otherwise would have. In other words, vacationing employees will have fewer greenbacks with which to stimulate the economy. With less money to spend "getting away" these vacationing employees may take up gardening so they can not stimulate the economy by eating produce they've grown themselves.

While I think Grayson's bill is nanny state silliness, I have to admit that I'm a little conflicted about it. You see, I advocated something very similar when I wrote about going Galt:
have you ever wondered why it is that Europeans take so much vacation time? Part of the reason is that time-off is taxed at 0%. If you're negotiating your compensation then you should not only consider asking for more vacation time, but also a shorter work week—a four day work week is like a 20% raise.
Grayson's proposal is essentially a 2% raise, but it's a raise in untaxed compensation. If his bill becomes law, then companies would consider the government required vacation part of their employee's compensation and reduce employ monetary compensation by 2%. In practice, an employee slated for an 8% raise at the one year mark would get a 6% raise and a week of vacation. This means that tax revenue that would otherwise be collected at our vactioning employee's marginal rate, wont be. Sure, it's a small hit to income tax revenue—about $500 for someone making $50k.

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