Motley Moose – Archive

Since 2008 – Progress Through Politics

Jobs, Jobs, Jobs

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.

Corporate Taxes

Our current corporate tax rates are:

Taxable Income ($)       Tax Rate[21]

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[21]

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.  

Income Inequality

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.


  1. I think we should lower the top corporate tax rate to 25% and then apply that rate to all income, foreign or domestic. A company could deduct foreign taxes on foreign income. So if they pay 20% to another government they only owe 5% to the US government. This would eliminate any incentive to offshore profits. There are trillions of dollars held overseas to avoid US corporate taxes. Those dollars would come home where they belong.

  2. o Ideally corporate tax rates are just low enough to provide at least a neutral factor in companies deciding to do business here.

    – You cannot tax what does not happen locally, so taxes which act as a disincentive to companies doing business can lower tax revenues directly and lower related economic activity. The inverse is also true.

    – Tax rates do not need to be the same as other jurisdictions to meet that bar. Higher taxes in Silicon Valley than in Karachi do not in themselves necessarily lower tax revenue due to the other values of being in Silicon Valley (or DC, or LA…).

    o I am not a big fan of leaving large portions of the population off the tax base. More than taxing the poor or catching rich loophole-experts, there seems an intrinsic value in everyone at least nominally sharing in the national burden.

    – perhaps very-low rates for very low income and an unavoidable base level regardless of write-offs…

    o Our national and local need for tax revenues seems to be beyond our current ability to generate it. More economic activity creates more tax revenue, and higher tax rates create higher revenue. Too much of the latter restricts the amount available for the former.

    I honestly do not know enough about the intricacies of tax policy to have a really strong opinion about the impacts of changes to taxes. Despite it’s Teh Crazy-ness, the basic Tea Party argument of freeing up capital from taxes to promote economic activity (and therefore, perhaps counter-intuitively, increasing tax revenues) is fundamentally sound. The devil is in the details, and neither I nor the average Tea Partier are not qualified to give a strong opinion as to where to place the bets.

    Because they are all just bets.

    Perhaps a slight raise in tax rates in appropriate places will provide enough tax revenue to address the needs of the government without having any negative impact on the overall economy. Perhaps this would help the economy by providing specific supports to it in appropriate places.

    – Perhaps this would cause businesses to hold back on local growth, make international businesses tend to execute less slowly in the US or put efforts elsewhere, lowering tax revenues and the ability to generate them.

    Perhaps a strategic lowering in tax rates in particular cases would provide an impetus for business creation and growth, creating jobs and international competitiveness and increasing tax revenues.

    – Perhaps this would impoverish the social framework in key ways and lead to a collapse that stifles the economic benefits and further lowers tax revenues, leading to an unrecoverable spiral.

    Being intrinsically pro-business I lean away from tax increases. But the real answer to all of this is so much more detailed (unless the Forbes Flat Tax was an actually an option, and actually worked) than I am qualified to comment on. Both the Tea Party “Lower Taxes are Good!”  and the Left’s ((yes, I actually can criticize the man)and Obama’s: (yes, I actually can criticize the man) “Rich People are Greedy!” mantras strike me as at best remarkably simplistic positions

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