pan6467

So, I'm at work last night smoking a cancer stick, thinking about the raise I just got when it dawned on me.......... the perfect tax system that would not only boost workers morale, production and company loyalty.

What if the government were to simply say, "look, no more tax cuts. Instead what we propose is this: anyone making less than $100,000 a year every raise you get, all the overtime you get is non taxable. No FICA, no federal, no state or local. For the next 10 years that money is untouchable."

As for the companies to promote raises, the government offers tax credits to make sure companies aren't hurt by raises and offer a definitive structure of raises.... not guaranteed but based on performance. As for overtime, again tax credits are offered to companies but they must show that they are trying to fill positions so that overtime is not needed.

Now, if you leave the job voluntarily, you are taxed at your new job until you recieve wages equal to those you just left (so raises would be taxed if you left a decent waged job to work at Mccy D's).

If you left because of a layoff or a company closing, then your raises at the next job will not be taxed.

Now, if you make over $100,000 your raises are taxed, however, they are taxed at a lower rate. So if you make $100,000 and your tax rate is 25% and next year your recieve a $10,000 raise, the $100,000 is still taxed at 25% but that 10,000 is taxed at 15%.

Now, if you make over $1 million, any raise is taxed at same rate as before.

This punishes noone, inspires people to work harder and be more loyal. It allows companies breathing room as they don't have to match more FICA and so on and they recieve tax credits when they give merit raises.

This would be a definite boom to the economy and people maybe able to save their raises, invest them or use them to buy more.

This would help the people on the lesser end of the pay scales to catch up and maybe move upward. It would induce company loyalty and hard work because if you knew every 6 months you would get a 50 cent raise (which is what I get) every year I'm making $1 more an hour and it isn't taxed. Granted $40 a week may not seem like much but you save it every week it's $2,000+ more a year (tax free) and in 10 years it's $400 more a week tax free, $20,000 a year and you save that increase or part of it every year.... you're going to have a nice chunk of change for retirement or the kids to go to college, or a vacation home or whatever.

I feel that is a proposal everyone can live with.

__________________
I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

jimbob

my personal experience is that loyalty is not rewarded - it's only when you leave that you get offered more - and i don't think that will change whatever the tex system. If they think you're going to work for them forever they won't try to encourage you to stay. and what's wrong with a taxable raise as a form of encouragement? you still get more money! anyway, the tax regime is already factored into the labor market - if we currently accept a raise of $100 after tax then the market will support a raise of $100 whatever the rate of tax. so you'll be unlikely to get more but your employer will benefit by the amount of the tax reduction.

by the way, there's no need for tax at all in an economy where the state rather than the banks creates the money.
naff looking website but the ideas in it are pretty good.
http://www.xat.org/

The Truth

Uhh, what was it you were smoking again?

You haven't addressed how that would help the self-employed.

Or how this wouldn't wind up like the alternative minimum tax, which will soon ensnare 10 million people, when its intent was to tax three or four hundred of the wealthiest.

pan6467

If you have legitimate questions that's cool. If you are going to start your reply by belittleing me, YOU are trolling.

__________________
I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

pan6467

There used to be company loyalty, the problem is companies don't show loyalty to their workers ("Everyone is replaceable" and/or threatening to close) and workers are always looking for someplace better.

If you offer tax free raises to stay it may promote loyalty. As for encouraging you to stay, how do GM, Ford, and so on encourage? People are going to leave no matter what, and people are going to stay no matter what. It's the nature of the beast.

$100 an hour raise, yeah that may affect things. A 50 cent an hour (if that, most places you're lucky to get 10-25 cents) raise twice a year isn't going to cause massive inflation.

Something has to be done to stimulate the economy, someone has to be creative and find a way to keep jobs here, keep pay at a decent level (every decrease in pay hurts the tax base as much if not more than a tax cut).

__________________
I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

stevo

The economy is stimulated. Your concerns are unfounded.



Percent change at seasonally adjusted annual rate
GDP
2004 Q1 Q2 Q3 Q4 2005 Q1
4.4 4.5 3.3 4.0 3.8 3.8

http://www.bea.doc.gov/bea/glance.htm

The national unemployment rate for June 2005 was 5.0%

http://www.bls.gov/cps/home.htm#overview

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"If I am such a genius why am I drunk, lost in the desert, with a bullet in my ass?" -Otto Mannkusser

alansmithee

I don't see your tax plan as being viable, or having the intended effect. Are raises only figured per year? And how are you going to keep track of hourly rates and salaries to make sure that raises aren't being taxed? Also, what constitutes a "raise"? What if someone goes from an hourly position to salary, how will their potential pay be figured? And how would this affect people who live mainly on tips? Or what's to stop a business from simply having "raises" after 1 week of work to avoid taxes (on both sides)?

What would be more effective to raising wages here and keeping jobs would be tariffs. Many jobs being shipped overseas are being done to save on labor, where the rates for pay are lower. By making tarrifs that make goods an equivalent price to having paid the local workers what they would make in the US doing the same job, it only makes sense for businesses to stay in the US (since shipping costs from overseas would raise prices higher than local goods, labor costs being (artificially) equal)

Obviously, this would probably create some trade wars, but the primary targets of such tarrifs are mainly export nations, so we wouldn't see much (if any) noticable dropoff in exports. And those should be offset by the now relatively cheaper domestic goods.

pan6467

Like I said I'm not an economist but I truly beieve that something in that genre with some tweeking could work.


OMFG...... a conservative who argues for tariffs..... I used to be very vocal on here about raising them to even the labor playing field and the Right (and some Lefties for different reasons) would rip me to shreds.

Hey Zeaus Freaking Crisps, this is the second time in less than a half hour I've had to agree with you...... this is getting scary.

__________________
I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

pan6467

And the deficits? When the trade deficit starts declining and the national deficit starts declining, then I'll believe.

Let's see economic growth such as people less out of debt and making more money instead of jobs leaving for overseas and people having to take jobs that pay less.

Then I'll believe the economy is in good shape.

__________________
I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

stevo

In May 2005 real disposable personal income increased 0.1 percent, (just like in april).

Income is not declining.

http://www.bea.doc.gov/bea/glance.htm

The trade deficit isn't as important as you think it is, as long as we can pay for what we import. Energy (and related goods) are the #1 import, which skews the current account.

__________________
"If I am such a genius why am I drunk, lost in the desert, with a bullet in my ass?" -Otto Mannkusser

moosenose

Sounds like Corporate Feudalism to me...in effect, it would force workers to stay in their jobs even if they wanted to go somplace else, because they couldn't take the tax bite. Your idea would turn employees into virtual serfs. Just out of curiosity, would the corporations own their employee's offspring, too?

politicophile

So, poor people would pay less in taxes. And rich people would pay less in taxes. And "the government" would subsidize the whole operation?

The money needs to come from somewhere.