Anytime anyone proposes even the most modest tax increase on multimillionaires, minions of Grover Norquist religiously recite their time worn mantras: “You can’t tax the job creators” and “Why do you want to punish success?” Well, I believe the literal interpretation of their doctrine may be sound but there is a disconnection between the theory and practice.
I agree that it is antithetical to the American way to punish those who have achieved success through their own hard work. I enthusiastically advocate prosperity for everyone who creates American jobs. But, if we reward their success we should also penalize their failure.
For more than three decades, we gave disproportionate tax breaks to the top one percent under the guise that they would use their increased liquidity to create jobs. They assured us that we too would benefit from the vague effect they called “trickle-down” and so we paid homage to them. We allowed them to have their dessert as the first course in exchange for a promise that they would eat their vegetables later. However, instead of creating jobs in the United States, they exported our jobs to the Pacific Rim. As the ranks of our unemployed swelled, CEO’s grew fat on a feast of Chinese Pizza and Oriental Fries.
The unemployment rate is the obvious indicator to measure the success and failure of the “Job Creators”. I recommend we establish an Unemployment Surcharge Adjustment (USA) based on the unemployment rate. The USA would increase taxes on the top earners when they fail to create American jobs; when unemployment is high. Conversely, it will result in a tax cut when they are successful; when unemployment is low.
First, we establish a TARGET UNEMPLOYMENT (TU) of 6%; then, each quarter, the Department of Labor publishes the AVERAGE UNEMPLOYMENT (AU) based on a six month moving average of monthly unemployment figures. To compute the USA, subtract the TARGET UNEMPLOYMENT (TU) from the AVERAGE UNEMPLOYMENT (AU) and multiply the result by 4.
When unemployment is high, say 9%; the USA would be 12%. (9% – 6% = 3%; 3% x 4 = 12%) When unemployment is below 6%, the difference becomes a negative number and the USA results in a tax reduction. If the AU is 5.5% the USA results in a 2% reduction in taxes. (5.5% - 6% = -0.5%; -0.5% x 4 = -2%).
The USA would be added
to the Capital Gains and Carried Interest rate for net gains in excess of $20,000/year
and the Marginal Tax Rate for net ordinary income above $1,000,000/year.
When the job
creators are successful, they get a tax cut; when they fail, they pay a
penalty.
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