I don’t write a lot of diaries, but I’ve had a lot of ideas running around my head the last couple weeks about how to help put the economy and job creation right overall for the country.
I really have two main interests outside of politics. I enjoy reading about and discussing economic issues and education issues. I’ll save the education ones for another day, but I wanted to kind of have an open discussion about some of the ideas I had and maybe fine tune them or throw them out completely.
So, as much as I appreciate pure opinion I would appreciate a more constructive approach to this diary. If you don’t think it’s a good idea of course say so, but please say why and I’m hoping you would have some links to back it up.
If you do like the ideas, I would love to hear that as well and if you have some additional resources that would reinforce the idea I would love that too.
Some of the ideas aren’t complete either so if you know how to connect the remaining dots I look forward to that too.
So, to get started I don’t think you can talk about jobs and the economy without talking about tax policy.
I think our current tax system is definitely broken as most of those here do. Currently, we have the following tax brackets (I’m just going to list single):
Up to $8,500 — 10%
$8,501-34,500 — 15%
$34,501-83,600 — 25%
$83,601-174,400 — 28%
$174,401-379,150 — 33%
Over $379,150 — 35%
Standard Deduction is currently $3,700. Then there is also the option to itemize with many, many different things that can be deducted or receive a tax credit.
I would change it in the following way:
Up to $15,000 – 0%
$15,001-45,000 – 15%
$45,001-85,000 – 25%
$85,001-200,000 – 28%
$200,001-400,000 – 33%
$400,001-1,000,000 – 35%
$1,000,001-4,000,000 – 37%
$4,000,001-10,000,000 – 40%
Over $10,000,000 – 45%
I would also increase the standard deduction to $8,000; and only have 3 itemized opportunities. Everyone would get the standard deduction because there wouldn’t be itemizing anymore, the ones below would be in addition to the standard deduction.
Housing Deduction (one per household): $8,000
Education Deduction (per person – for post secondary educational cost and/or non-reimbursed expenses for teachers): Up to $7,000
Business Expenses (non-reimbursed expenses for work – such has union/professional dues or travel): Up to $4,000
All these numbers could use some tweaking based on tax receipts.
Our current corporate tax rates are:
Taxable Income ($) Tax Rate
0 to 50,000 15%
50,000 to 75,000 $7,500 + 25% Of the amount over 50,000
75,000 to 100,000 $13,750 + 34% Of the amount over 75,000
100,000 to 335,000 $22,250 + 39% Of the amount over 100,000
335,000 to 10,000,000 $113,900 + 34% Of the amount over 335,000
10,000,000 to 15,000,000 $3,400,000 + 35% Of over 10,000,000
15,000,000 to 18,333,333 $5,150,000 + 38% Of over 15,000,000
18,333,333 and up 35%
I would change it to a similar setup to what individual tax rates work to simpify it:
Taxable Income ($) Tax Rate
0 to 50,000 15%
50,000 to 75,000 25%
75,000 to 100,000 29%
100,000 to 335,000 30%
335,000 to 10,000,000 32%
10,000,000 to 15,000,000 33%
15,000,000 to 18,333,333 34%
18,333,333 and up 35%
The main difference I would say is that if a company’s revenue (in total or any individual subsidiary) exceeds 50% from activities in the United States they would pay taxes on all reported profits. All loses must be reconciled in the year that they occurred and cannot be carried over to future years.
Capital Gains Taxes
Current capital gains taxes are not fair to every day workers. I would change it if your combined income (all sources) is under $250,000 your capital tax rate would be 15%. Any above $250,00 combined income, capital gains would be taxed at ordinary income tax rates.
Now I want to get into some ideas that I have no idea if they would work or not.
Total CEO compensation as it relates to average worker compensation is currently about 500 to 1.
I would propose if a company’s revenue (in total or any individual subsidiary) exceeds 50% from activities in the United States they would have to not exceed a 100 to 1 chief executive to average worker compensation ratio.
I would do this instead of pay caps because first of all I’m uncomfortable with the governemnt setting pay for private sector businesses and secondly I think this would be easier to manage at the federal level.
This is the one thing I have the most concern about right now. I know we have trade agreements that right now feel like they are hurting us, but I feel like there’s got to be a way to make these trade agreements work in our favor.
There’s a couple things about the jobs we’ve lost, not all of them have been to off-shoring. I hear a lot that we don’t make anything anymore, but we all know that’s not true. We make about the same amount of stuff here, we just do it with less workers. Plus, during our heyday 1950s-1960s we were pretty much the only game in town for manufacturing after the fallout from WW2.
The only idea I’ve come up with is that if a company’s revenue (in total or any individual subsidiary) exceed 50% from activities in the United States, then any worker that is employed overseas would have to pay a foreign worker fee of $75,000 per worker per year.
The main problem I have with this is that I think they’ll just outsource instead of off-shore and buy what they need from foreign companies if that’s an option for them. I’m really looking either for a better idea here or a way to make this one work better.
So, where did this 50% of revenue thing come from? Well, I was thinking that there needs to be something that triggers some of these things, especially when talking about multinational corporations and their ability right now to avoid. First, I thought the easiest thing would be to say US base
d companies, but then I figured they would just move their corporation off shore. Then, I thought what if it’s just be based on where they sell the products and services and if you sell more than half of your stuff here then you should abide by our tax laws and be a US company. So, that’s where that came from, if someone has a better idea I would love to hear it.
Lastly, I had one last thought about Social Security. I know the easiest solution is to eliminate the cap. I’ve talked to some small business owners I know and they said it would really hurt them because they often have sales people who make over the cap. They are usually are commission based so there is no real way to keep them under the cap, especially since sales people drive their revenue. Since, businesses make Social Security contributions as well; I would propose that there would be no increase in contributions for the employee or businesses for wages between $106,800 and $300,000 then for every dollar over $300,000 normal contributions would begin. I was told this would exempt everyone except C-level executives and owners, which is basically what we want.
Again, I’m not locked into these positions but I want to see what everyone thought and if I’m completely out of my mind.