(1) Let's Solve Problems Rather Than Spout Rhetoric
As the President proposed in his speech to the United Auto Workers Union and as Warren Buffet and George Soros agree with, the upper echelon of earners pay taxes at a lower rate than the average middle class person, which is an extremely unfair position to be in that needs to be rectified.
On the other hand, the counter argument has been that increasing taxes on the wealthy will discourage job creation.
The problem has been that a blanket lowering of taxes on the well-to-do does not in general promote the trickle down economic theorem first proposed by Reagan. Instead, we see the wealth going overseas in the form of outsourcing or being hoarded and not being allowed to "trickle".
We suggest that indeed taxes do need to be increased on the upper class to be in align with what the rest of us have to pay, but to alleviate the trickle plug in the form of a dose of tax write-off "Flomax". Allow corporate elites who increase domestic employment to take write-offs that lower their taxes. Effectively they then offset their own taxes by bringing more domestic tax payers into the fold as domestic employment is increased.
As we now should have more domestically employed we will have increased revenue going into Social Security thru FICA, thus making it solvent again as well as alleviating Medicare concerns.
For the nonbusiness owning elite (movie and football stars, second
generation wealth inheritors, etc.) encourage foundations, mutual funds and LLCs to be developed which in turn invest in companies to increase domestic employment, then pass the write-offs through to their members.
With the write-off proviso we can encourage the upper class to do what is in their own interest to do, which is to lower their own taxes by increasing the domestic workforce, effectively shifting the extra taxes to those who are hired. This I view as good government influence.
(2) Let's Solve Problems Rather than Spout Rhetoric.
We need to remove the incentives for offshoring jobs so tax that advantage away and put it towards the deficit as described below.
Investing in Our Future PROPOSED: - Economic regulative legislation to ease domestic job issues, reduce the deficit and the Social Security shortfall.
Implement this as another tool of the Fed, to be administered impartially using row economics, just as interest rates are. That provides a means to regulate money flow to and from the national economy. Remember we are not doing outright protections (as in tarriffs), but setting windows within which free trade flows as normal. But this way we protect domestic businesses from being overwhelmed while still forcing them to be efficient, we remove the advantages of offshoring and maintain good standards of domestic living rather than letting it be "watered down". And so here is another source of revenue other than direct taxation we need to use which no one seems to want to talk about. In short:
o Use carefully placed and actively monitored surcharges on foreign products to negate labor cost advantages and bring the labor costs of imports that could be made here near what it would cost to make those products here. This is an economic regulatory mechanism, NOT protectionism, that should be another impartially administered tool of an independent body such as the Fed.
o Apply the revenue of said surcharges towards the national deficit, then when that is low enough towards the general revenue, thereby lowering taxes for all citizens.
o Exclude products made here by foreign companies who choose to locate plants here, hire domestic labor and abide by our nation's labor laws. (We may import products but not labor needs.)
o Do not exclude domestic companies which export their labor needs outside this country then bring their products made there back here to sell. (We may export products but not labor needs.)
o Provide tax credits to those companies which increase domestic employment, impose additional tax on those who outsource.
As we now should have more domestically employed we should see more revenue going into Social Security thru FICA, thus making it solvent again :-). After all, Social Security as originally conceived is the minimal level income safety net for the old and disabled paid by domestic labor thru the good faith contract of the active generation helping take care of the retired and disabled. So if we keep letting our jobs go overseas who will pay YOUR Social Security? Exporting jobs short circuits this mechanism, requiring alternative funding sources like what we're proposing.
This will maintain a good standard of living within our country. It might encourage other countries to establish and maintain equally good standards of living for their citizens as well, since the cheap labor and subsidy advantage will be removed. What could be better?
That's the answer to our dilemma, keeping existing jobs here by removing the incentive to go outside the country while preserving our nation's standard of living. This ought to have bilateral support, when it is pointed out that with this mechanism local businesses large and small would not be driven out of business by subsidized or lower cost labor overseas. With that level playing field then it is the quality of their services and products that will dictate whether they survive or fail.
It is most important when deciding how to implement this mechanism to insure that the so-called "free trade" windows are set as impartially and independently as possible according to market conditions thru an agency not particularly holding to political influence (no "favored nation" or lobbying special treatments, marketing costs independently derived at via market monitoring and reporting), e.g., the FED, using input from another independent accounting agency such as the GAO. Otherwise it would be but one more source of political controversy.
It also is just as important that revenue from such a surcharge NOT be used for new spending, but 1) to lower the deficit, then 2) to lower the general taxes on everyone by funneling into the general revenue pool, out of which all back owed IOUs to Social Security should be paid as soon as possible.
One more remark before we go modifying the Social Security retirement age, in addition to a "means" test it needs to take in the type of activities one was engaged in while productive. Generally speaking, while desk or nonphysical intensive careers might be worked at into your 70s (providing dementia does not set in) if you worked at a physically hard job such as a coal miner, mill worker or general laborer you might well be worn out by the time you hit your 60s due to joint deterioration and arthritis. So maybe some justice to this: work at a physically hard job at lower pay but retire early or at a higher paying less physical job but retire later. It keeps the higher wage earners paying longer.