The current taxation system distorts economic activity and creates bloated government agencies and paperwork. Taxing capital and labor distorts economic activity. Taxing investment gains discourages investments in new businesses and those existing ones that want to expand (as well as penalizing those who invest in securities to fund their retirements or children's college funds). Taxing employee wages and salaries contributes to labor shortages because they increase both employer and employee tax burdens, and for someone making only minimum wage, that definitely decreases the amount of money they could use to support themselves. The employer could use it's share of the employment taxes to either invest in the business or provide more benefits to the employee, and the employee could use their share to buy more goods and services, or invest for their future. The minimum wage is a price floor on labor costs. Any student of Econ 101 knows that price floors create surpluses, because not all of the supply can be bought, since the price can't go to equilibrium. If we eliminate both the minimum wage and employment taxes, employment should rise because all of the labor available can be used, and none of the wages are going to taxes, so the employee gets to keep more of their lower pay, and the employer has lower costs. Until automation takes over, which will eliminate some jobs and create others. We must always remember that the amount of work available is not static, it is dynamic. Outsourcing destroys some jobs and creates new ones. Also, Social Security is an incredibly stupid and fraudulent method of providing for retirement. Taxing current employee wages, putting those taxes into a fund to pay retired employees, and "investing" the excess receipts in US Treasuries will only work as long as people keep entering the workforce and the government doesn't default. If people stop entering the workforce or inflation destroys the value of the Treasury bonds, those poor retired people will be very upset. If a private employer ran their pension plan the way the government runs Social Security (use a portion of current employees wages to fund retired employees' pensions, and invest the excess receipts in their own bonds), the SEC would charge them with racketeering, because that is a Ponzi scheme, which is completely unsustainable. Employers should be required to have an independent financial advisor invest, in an individual trust account, a portion of their employees' wages in quality securities so the employees can fund their retirement, and this fund can be drawn on the employee at any time for any reason, and is turned over to the employee upon resignation, termination, or retirement. The employer should also be required to put a portion of their wages in a general trust account funded by every employee, which pays out non-cosmetic employee healthcare expenses that are above 10% of the employee's salary/employee/year, the excess receipts being invested by the trustee for the fund. Also, the board of directors of corporations should be split into two levels: a supervisory board that consists of representatives from the shareholders, creditors, employees, and outside experts, who appoints the management board, which oversees day-to-day operations. The only thing the government should tax are the things the government itself provides: land ownership rights and intellectual property rights, because these produce economic rent. Profit-seeking behavior should be encouraged, but not rent-seeking behavior, as those attempt to increase one's share of existing wealth without creating any new wealth. Taxing land values will encourage development of marginal areas and reduce real estate speculation and asset bubbles, as now people have to pay to hold land (if one is retired, the land tax can be deferred until the land is sold or is inherited). Taxing IP rights will deter patent trolls and submarine patents, and encourage people who apply for patents to make sure they are commercially viable and can provide an income from either being used in their business or by being licensed to those who can make use of them. And taxing imports through customs duties is protectionism, which limits consumer choice. Economies need to follow comparative advantage: specialize in producing only those things where you have it, and trade for things where you don't. The total value of land and IP in America is worth a combined $26.5 trillion (IP value from http://www.ecommercetimes.com/story/75527.html, land value from http://www.slate.com/blogs/moneybox/...ed_states.html). Taxing those at 7.5% annually will create a annual tax revenue of $1.99 trillion. And we can eliminate the IRS, as well as most of customs, save for the border protection part. If we combine this with an electricity-backed currency (http://www.elitetrader.com/et/index...ion-to-an-electricity-backed-currency.287860/), we will have a economic golden age because taxes will be borne only by those who are most able to pay, and the money supply will keep pace with economic activity, as interest and exchange rates will be free to go where the market determines they need to be.
Should have done the two things below simultaneously for long long time: 1. Perhaps one thing to consider is not all companies to be taxed with same way/%, depending on different nature and objectives of individual industries/companies. Utilities should be lowest tax. ... 2. Maximum annual profit % should be limited for individual industries differently, in order to stimulate more ethical expenses and employees, rather than making wealthy ones getting further wealthier. Utilities should be lowest limit on maximum profit %. ... Any abnormal profits exceeding the above-mentioned per-determined standards should be, basically nearly all, taxed to Governments. One main reason is simply the success of a business is partly if not mainly due to a Government's long term investments on education system, infrastructure system, social security/ stability, political system, hospitals, retirement system, culture facilities, society planning/ structure, entertainments, defense, etc. etc. Never too late!!!
Having a maximum profit is morally wrong. If I'm very successful, why should I not be entitled to the profits from my fair dealings? Tax land and IP. Tax economic rent. Taxing anything else, like production, sales, and profits, distorts the economy. If the government and the people act rationally, solely taxing IP and land will raise lots of revenue.
" http://en.wikipedia.org/wiki/Value_chain A value chain is a chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market. The concept comes from business management and was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.[1] The idea of the value chain is based on the process view of organizations, the idea of seeing a manufacturing (or service) organization as a system, made up of subsystems each with inputs, transformation processes and outputs. Inputs, transformation processes, and outputs involve the acquisition and consumption of resources - money, labour, materials, equipment, buildings, land, administration and management. How value chain activities are carried out determines costs and affects profits. —IfM, Cambridge[2] "
That's very interesting, but how does it relate to this thread? Also, different industries pay very different *effective* tax rates, due to our Byzantine tax code. I stand by my argument that taxing only land and IP will raise revenue without distorting business activities, and will improve the efficiency of the value chain, and decrease the tax burden on the poor and those working minimum wage jobs.
who will assess the value of the land to be taxed? when I bought the property it was just a vacant lot and I paid very little taxes after I built my factory they taxed the shit out of it that's the last time I'll ever do that
If I were you, I would've sold that land, not keep it. Independent assessors will assess the land value.
Also, you must have been a very poor entrepreneur if your factory didn't make enough revenue to cover the land value tax.
I one hundred percent agree with limiting profits if corporations. 1) limit profits by forcing companies to use excess funds in creating quality jobs, higher incomes for low level employees, and preventing outsourcing. 2) reduce the income multiple that the upper level management makes compared to low level employees. i.e ceos and etc 3) have a max salary cap to reduce inflationary costs created by income increases.
Once again, hurting the successful rich people doesn't help the poor. Don't penalize people for being successful. You don't want to limit profits. Companies with more money can spend more on benefits. Protectionism is bad for everyone. If a company can get it's products made cheaper in China than in America, the consumer wins because they pay less for equivalent quality. What you're saying is that you want everyone to pay higher prices for things. There is not a fixed amount of work available, the amount and type of work change as the economy changes. Please read my original post again. I am arguing for the replacement of all taxes with a land and IP value tax, the elimination of minimum wage, and mandatory employer-funded pension funds and health insurance.