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A Simple Idea

Posted 07-26-2010 at 06:24 PM by Doug Nelson
Updated 07-27-2010 at 02:20 AM by Doug Nelson

I am not an economist, or an accountant. I'm just a slob that had an idea while trying to keep himself awake on a long drive.

My simple plan to save the American economy:

For too long American business has been driven by reducing the American workforce, either by outsourcing or downsizing. We need to turn that around so they're driven by growing the American workforce.

First we need to create a new term, defined as 1 American employed for for a minimum of 1500 hours per year on an employee basis (no contractors) at a wage at least at the average pay rate and including health benefits and some minimum other benefits TBD. As a placeholder until someone comes up with something more clever, I'll use the term "mannum".

My proposal is to give businesses a tax credit equal to the percentage increase in their mannum rate compared to the previous year.

So if their mannum increase is 1% over last year, they get a 1% tax credit.

Before I'm branded a conservative for finding yet another way to cut taxes for business, remember that each percentage represents new tax-paying workers. American workers that are happy to pay taxes, since it means they are now employed.

Obviously some things would need to get worked out, like for new companies, or companies that have a mannum of over 100%. We'd probably need to come up with some way to avoid gaming, but honestly a bit of gaming would probably be a good thing.

But the important thing is the concept: offering businesses a concrete and valuable reward for hiring Americans with benefits and a fair wage.
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  1. Old Comment
    Nice way to provide incentives for growth, but do you take back the percentage gained upon reducing? And in the case where a company is downsizing for other than recovery needs (contracts are finished, part of the company is split/sold, etc), how do you recalculate the base? Should there be also a standard unit of production so you normalize how many employees a given company ought to have (a very Marxist view of the free market) ?
    Posted 08-02-2010 at 11:34 AM by lokki lokki is offline
  2. Old Comment
    Doug Nelson's Avatar
    I propose a reshifting of the American business mindset so that the purpose of business is no longer to boost share price, but to create jobs. Profit is and will always be the core motive for business, but the result of that has degenerated since we've discoved ways of making profit besides simply providing a good product or service. This would mitigate those degenerate profit sources and force a refocusing on the employee.

    Instead of "the business of America is business" it would become "the business of America is employment".
    Posted 08-03-2010 at 02:12 PM by Doug Nelson Doug Nelson is offline
  3. Old Comment
    CJ Swartz's Avatar
    i am glad to hear of any useful plan to save the American economy (which would no doubt help the world economy as well ).

    I like your idea, and it would appear to make sense. There is some type of tax credit available now according to this article, but I haven't read anything about it previously.

    I was a "soldier in the War on Poverty" for much of my youth, working with clients who were out of work and "economically disadvantaged". Clients tended to be the young, minority race or ethnicity, veteran, and/or history of criminal conviction. One tool that was created to help was the Targeted Jobs Tax Credit, which would give the employer of a target group a tax credit of a certain amount. The administration of the TJTC required certification and approval by a separate office, and I never knew just how it all worked. Staff were hopeful that it would motivate some employers to hire our clients, but it never really became a factor in increasing placements. This was a different idea than yours, however, because it wanted owners to hire people that they didn't want to hire, instead of getting a tax credit for hiring whoever they choose to hire. I would think this would be of interest to any employer who needs to hire.
    Posted 08-15-2010 at 03:10 PM by CJ Swartz CJ Swartz is offline

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