Tonight is President Obama’s Job Speech(tm).<\/p>\n
I have a counter-proposal that is so “out of the box” thinking it might work.<\/p>\n
It’s simple.\u00a0\u00a0\u00a0 Today, the Employer and Employee each pay 7.65% half of the payments into Social Security (self-employed pay both parts – 15.3%)<\/p>\n
My idea:\u00a0\u00a0 End the the employee contribution to Social Security, and shift that to the employer AND <\/strong>make 100% of the employer Social Security taxes paid as a NON-REFUNDABLE CORPORATE INCOME TAX CREDIT.<\/span><\/strong><\/span><\/p>\n Things this would do:<\/span><\/p>\n So an example:<\/p>\n Company “W” <\/strong>(a retailer) employs 2.1 million people and has sales of $421 billion.\u00a0 They have a payroll of $60 billion (guestimate), which means today they pay about\u00a0 $4.5 billion in Social Security and Medicare.\u00a0\u00a0 Under my play they now pay $9 billion – but that entire $9 billion is a direct write off against their corporate income tax.\u00a0 Today, they make about $23 million a year and pay $7 billion in corporate income tax.<\/p>\n So they pay $9 billion in Social Security ($4.5 billion more than they are now).\u00a0\u00a0\u00a0\u00a0 The entire $7 billion they pay today in corporate income taxes would go away, increasing their after tax profits by $2.5 billion.\u00a0\u00a0 Not only that, they have a $2 billion buffer during which they can hire more people and not pay any social security tax on them.<\/p>\n Company “G” <\/strong>is a domestic car maker.\u00a0\u00a0\u00a0 They employ lots of union members, but have little of no chance of making a profit.\u00a0\u00a0 Their Social Security taxes double with no tax benefit<\/p>\n Company “T of America”<\/strong> is a car maker from Japan that makes cars in America – They get a tax credit for their employee wages inside the United States, but derive no benefit from it because they tax shift the corporate income back to Japan, so their tax benefits Double<\/p>\n Company “GS” <\/strong>is a global investment banking company.\u00a0\u00a0\u00a0 Their employees are mostly “partners” who evade paying FICA because they are above the income cap or they don’t work in the United States.\u00a0\u00a0\u00a0 They employ relative few Americans and are aggressively working to move those jobs to other countries. \u00a0 They would see a doubling of their Social Security taxes with minimal effect on their overall taxes. \u00a0 \u00a0 This would encourage GS to completely leave the country and detach itself from the Obama White House Nipple<\/p>\n I’m sure this idea has lots of unintended consequences, but the underlying principle is sound – to quote Ronald Reagan (which I rarely do)<\/p>\n “When you tax something, you get less of it – when you subsidize something you get more of it”.<\/p>\n So the underlying principle is that we want more companies with employees in America making a healthy profit.<\/strong> The marketplace will work out the details of the winners and the losers.<\/p>\n There is no doubt that this will be wildly supported by most Americans – they’ll see their take home go up 7.65% (at least at first),\u00a0 “good” corporations will see their taxes drop, social security tax revenue will increase without raising rates (as part of the 20% functionally unemployed go back to work),\u00a0 Democrats will support it because they think they’re sticking it to corporations and discouraging outsourcing.<\/p>\n","protected":false},"excerpt":{"rendered":" Tonight is President Obama’s Job Speech(tm). I have a counter-proposal that is so “out of the box” thinking it might work. It’s simple.\u00a0\u00a0\u00a0 Today, the Employer and Employee each pay 7.65% half of the payments into Social Security (self-employed pay … Continue reading \n
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