Table of Contents
Chapter One—The Problem . . . . . . . . . . . . . . . . . . . . . . . 1 Many profitable and growing companies are not hiring or are laying off American workers. Why? Chapter Two—The Power of the Tax Rate Structure . . . . . . . . . . . 13 All taxes influence behavior. There is no such thing as a neutral tax. Chapter Three—The Solution . . . . . . . . . . . . . . . . . . . . . . 23 What is needed is a new tax rate structure for corporate income taxes that will serve as an incentive for corporations to hire American workers and allow growing, hiring companies to grow faster by allowing them to keep more of their profits for investment in their own growth. This will produce jobs and increase the pace of economic growth. Chapter Four—The Details . . . . . . . . . . . . . . . . . . . . . . 35 A Sample Structure . . . . . . . . . . . . . . . . . . . . . . . . 36 How to Measure Employment . . . . . . . . . . . . . . . . . . . 38 Preventing Manipulation—Increasing Owner and Executive Salaries 40 Preventing Manipulation—Cutting Payroll One Year to Increase It the Next 43 Formula or Table of Rates? . . . . . . . . . . . . . . . . . . . . 45 Percentage Increase in Payroll Subtracted from Tax Rate . . . . . . . 45 Preventing Manipulation—High-Profit/Low-Payroll Companies . . . . 47 Using the Relationship Between Profit and Payroll . . . . . . . . . . 51 Making the Formula Flexible . . . . . . . . . . . . . . . . . . . . . 55 The Multipliers . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Keeping the New Rate Structure Revenue Neutral . . . . . . . . . 62 Who Counts as an American Worker? . . . . . . . . . . . . . . . . 68 Start-up Companies, Reorganizations, Mergers, and Acquisitions . . . 70 Carry Forward Unused Rate Discounts . . . . . . . . . . . . . . . 72 Consulting Companies and Temporary Help Agencies . . . . . . . . 74 Tax Rate Discount Optional—Not a Paperwork Burden . . . . . . . . 79 Adjust for Inflation . . . . . . . . . . . . . . . . . . . . . . . . . 80 Government Agency Involvement . . . . . . . . . . . . . . . . . . 80 Lead Time for Rules and Factors for Predictability . . . . . . . . . 83 Adjust by Year or by Quarter . . . . . . . . . . . . . . . 83 New Tax Structure Should Be Retroactive to Time of Debate . . . 84 Combining New Tax Structure with Existing Tax Credits . . . . . . . 85 Effect on Government Revenue of Normal Business Cycles . . . . . 86 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Chapter Five—Objections and Answers . . . . . . . . . . . . . . . . . 91 “We Are Better Off Without the Low-paying Jobs that Are Being Exported” 91 “Too Much Government Interference in Business” . . . . . . . . 92 “Unequal Tax Burden on Companies” . . . . . . . . . . . . . . . . 95 “This Will Be Hard on Struggling Companies” . . . . . . . . . . . 97 “This May Cause Layoffs” . . . . . . . . . . . . . . . . . . . . . 98 “Potential for Fraud” . . . . . . . . . . . . . . . . . . . . 100 “This Won’t Influence Hiring Decisions” . . . . . . . . . . . . . . 101 “This Will Increase the Size of Government” . . . . . . . . . . . . 104 “This Would Give a Government Agency Power to Raise Taxes Invisibly” 105 “Effective Average Tax Rate Will Go Up in a Recession” . . . . . . 108 “Companies Can Manipulate Tax Discount by Laying Off American Workers and Hiring them Back Later” . . . . . . . . . . . . . . . . 109 “This Will Hurt the Economies of Developing Nations” . . . . . . . 110
“It Is
Better to Just Cut Income Taxes for All Corporations Regardless Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Chapter Six—Alternative Solutions . . . . . . . . . . . . . . . . . . 121 Two Types of Tax Incentives . . . . . . . . . . . . . . . 121 Alternative Tax Structures: Tax Credits . . . . . . . . . . . . . . 124 Flat Rate Tax Credit per New Employee Hired . . . . . . . . . 124 Tax Credit Equal to Percentage of Salary of New Employees Hired 126
Tax Credit Based on Probable Increase in Personal Income Taxes
Alternative Tax Structures: Tax Rate Discounts . . . . . . . . . . 132 Rate Discount Based on Increase in Full-time Employee Head Count 132 Determine a Tax Rate Discount by a Table of Rates . . . . . . . 134 Vary a Rate Discount for Increase in Payroll by Industry . . . . . 138 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Chapter Seven—State Income Taxes . . . . . . . . . . . . . . . . . 141 Same Basic Principles that Apply at National Level Apply at State Level 141
At State Level, Incentive to Hire Is Smaller Compared with Reduction
Competition Between States for Growing Companies . . . . . . . . 145
State Tax Rate Discounts Help Companies in that
State Compete with
Should Only Employees Residing in the State
Be Counted for a State States May Lead the Way . . . . . . . . . . . . . . . . . . . . . 152 Chapter Eight—What Is Ahead for the American Economy? . . . . . . 153
Stemming the Flow of Jobs out of the United
States Is Essential for What Members of Congress Should Look For . . . . . . . . . . . 159 What State Houses Should Look For . . . . . . . . . . . . . . . 161 What Corporations Should Look For . . . . . . . . . . . . . . . 161 Prospects for a New Tax Structure . . . . . . . . . . . . . . . . 163
For more information, price, and ordering... Comments are welcome. CONTACT: Hamilton Bard (author): hamiltonbard@jobcreationtaxplan.com
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