Posted 10 years ago on Dec. 13, 2011, 3:02 a.m. EST by Wulfe
from Redmond, WA
This content is user submitted and not an official statement
I have been considering the root cause of our current economic imbalance. Of course the answer is greed, but what are the solutions? You can't change greed, especially in a corporate entity who answers only to shareholders, who are only shareholders for the profit potential. So given this, how would the government influence corporate policy?
Make it more profitable to have employees and make it even more profitable to treat them equitably. A major expense of any company is taxes, especially employment taxes. Even small businesses are penalized by the current tax structure for having an employee by paying more taxes on top of the wages and any benefits they provide. Why not turn that around? Raise corporate taxes on assets and income, and provide tax deductions and credits for having employees, and additional tax benefits for providing retirement funds, medical benefits, and child care proportional to the value of these benefits. I'm sure the IRS could come up with a tax schedule that would ensure corporate entities and small businesses alike would actually benefit from maintaining quality employees and providing for them.
Scaling the deductions to provide the best benefit for jobs that provide between 50K and 100K would provide a "target income bracket" to businesses. Reducing the deduction for larger salaries or removing it altogether after a certain point, and excluding the rediculously large bonuses some CEOs get would give Corporations a reason to reduce the pay inequality that is creating an steep and aristocratic class gap. These deductions could also scale for the size of business based on income so that small businesses can compete without being penalized for being small.
The IRS already uses tax advantages to socially engineer America. We are provided deductions for being married and having dependends because the government wants us to be in neat little family units that it feels are healthy for society. We are provided with educational deductions because it wants our country to be capable and respected. The government taxes imports and exports at different levels to engineer what comes into and leaves the country. Why not use this same social lever to help alleviate the burden of welfare, medicaid and social security by making it easy for businesses large and small to provide jobs and benefits?
I don't have access to all the relevant numbers required to galvanize a tax reform of this scope, but someone does. Working with the government to present these kinds of solutions is the only way to make real change.