In this time of stubbornly high unemployment and economic woe, I believe it is time to reform our tax code in order to promote the creation of jobs on U.S. soil. Studies have shown that the deficit would disappear entirely if 54% of all Americans were currently employed. One of the most serious problems we currently face that is causing high unemployment is outsourcing. As Carly Fiorina once said 'Americans don't have a right to any job" (except her of course). Unfortunately, while everyone can acknowledge that outsourcing is a problem, no one really has come up with a solution for it. Some have advocated protectionism but protectionism has not worked. Most on the right advocate a return to the Gilded Ages by getting rid of our environmental and labor laws. It goes without saying that this is not a good idea (or even one that will work).
But I think that there may in fact be a solution that will enable us to preserve and attract our most coveted and yet most outsourcable jobs. Thus I propose the creation of special "All American" tax status for businesses. However, instead of rewarding the businesses directly, I believe we ought to reward the investors in those businesses (and thus investors in the American worker) instead.
Follow me below the fold.
Who is eligible for "All-American" status?
First, any business entity that conducted business in the following industries would be eligible for "All American" status:
2. Media Creation
3. Internet Businesses
4. Medical/Pharmaceutical Research
Second, that business entity must employ all of its non-executive and non-clerical positions on U.S. soil.
Third, any business entity may take advantage of "All American" status. The business entity can be owned by foreigners and may be headquartered in foreign countries. A business entity's status as "All American" is reliant on their employees, not their owners and directors.
Who gets the benefit of "All American" status?
Instead of giving tax credits and tax benefits directly to companies who employ workers in the United States, we ought to focus on rewarding those who invest in those companies and encourage them to put their capital into businesses that employ Americans.
What are the benefits of "All American" status?
1. Capital Gains taxes for investors in "All American" companies will be reduced.
2. Capital losses for investors in "All American" companies will be allowed to be deliberately uprated (within a certain limit of course).
3. Banks and other financial lending institutions will receive a lower income tax rate on interest earned from loans to "All American" companies.
4. Owners of dividend paying stocks in "All American" companies will either be exempted from the Dividend tax or pay a greatly reduced rate.
Why reward the investors?
The idea is simple. Let's create incentives for the haves of our society to invest in the have nots. Under this plan, we reward investors not for making money but for investing in the American worker and investing in American jobs.
How does this actually encourage businesses to keep jobs in the United States?
It does so in a handful of ways. First, it increases opportunity for companies to get capital. Because investors know that they have the potential to receive extra profit (through tax benefits) by investing in All American companies, they will do so.
Second, companies who are run by those who own large shares of the company's corporate stock will have the opportunity to become more personally wealthy. Many companies (or corporations) are run by individuals who derive their wealth not from the salary they take but the ownership of stock shares in these companies. For those who build up successful companies from scratch, their vast net worth often comes from their shares of stock.
Finally, companies will see the opportunity to raise the value of their own stock shares. That stock will be far more valuable for two reasons. #1: shares of stock if sold will see far more of the profits retained by the seller (instead of going to the government). #2: shares that will have extra profitability through taxation benefits will be far more desireable stock and therefore far more valuable simply based on demand.
Should be rewarding investors (and Wall Street types) allowing people to become personally wealthier instead of paying taxes?
Normally, our answer to this question would be no. But here, we reward personal wealth because it is derived from investing in the American worker. We're taking advantage of natural greed and using it in a way that best benefits all of society (rather than giving a handout).
Isn't this just Protectionism?
No. There is no trade favoritism for any products produced in the U.S. over products produced abroad or favoritism for American owned companies. Products manufactured and created in the U.S. will not be treated any more specially than products manufactured or created outside the U.S. Companies will still have to make good business decisions and will still have to produce good products. All we are doing is finding a way to encourage those businesses to employ people in the United States.
Because the Republicans and right wingers in general (those Libertarians too embarassed to admit they're Republicans) are too busy pursuing ideological craziness and committing borderline treason over the debt ceiling, we on the left have the opportunity to come up with answers to our stubbornly high rate of unemployment. We have the opportunity to define ourselves not just as those who care about the unemployed and are concerned with outsourcing but as those who can actually do something about it.