If I hear another Republican say “We can’t tax the job creators” or “Tax cuts for the rich create jobs” one more time, I think my head may explode. Anyone who has passed Intro to Economics in College understands that this concept is on par with Greek mythology; unfortunately to the corporate puppets it has become their religion.
Progressives need to challenge them to put the tax money where their mouth is. We need reform the tax code to penalize those who benefited from the Bush tax-cuts but did nothing to create jobs for American Citizens. The following is a general frame work to achieve this goal.
Tax Reforms for Unemployment Elimination
ELIMINATE direct taxes on Corporations; replace it with a Pre-Dividend Assessment. The assessment is due when profits are realized prior to quarterly dividend/profit dispersal to shareholders. For Corporations headquartered in the United States the base assessment is 20% and the base assessment on Foreign Corporations is 30% on the dividends/profits dispersed to US Citizens.
ESTABLISH an Unemployment Surcharge Adjustment indexed to the unemployment rate as follows:
A target unemployment rate is set at 6%. Each quarter, the target unemployment rate is subtracted from the unemployment rate for that quarter then multiplied by 5. When the unemployment rate is high, say 9.4%, the Unemployment Surcharge Adjustment would be 17% (9.4% – 6% = 3.4%; 3.4% x 5 = 17%). When unemployment is below 6%, the difference is negative and the adjustment becomes a cut. If unemployment is at 5.5% the adjustment results in a 2.5% tax reduction. (5.5% - 6% = -0.5%; -0.5% x 5 = -2.5%)
The Unemployment Surcharge Adjustment is added to the Corporate Pre-Dividend Assessment, all Capital Gains and regular income over $500,000 for individuals; payment is due with quarterly estimate filings.
REDUCE the total FICA rate to 4% and eliminate the requirement for the employer’s contribution. Individuals pay 4% on ALL income earned; regardless of source. 10% of the Pre-Dividend Assessment and Unemployment Surcharge Adjustment are allocated to Social Security, Medicare and Medicaid.
Johnny Tanman and Yertle McC its time to put up or shut up...