Thursday, April 21, 2011

Great Idea: Tie top marginal rate to unemployment

Now here is an idea for the times.  Republicans argue that you can’t let the Bush tax cuts lapse and have an increase in the top marginal tax rate because to do so would be a job killer.  Well, how about a little put up or shut up?  A writer on the Democratic Underground suggest a great idea, one Republicans should love.  Just this:

Why not tie the top marginal tax rate to the unemployment rate?

The writer suggests a formula like this:

The top marginal tax rate in any year would be calculated as follows:

Top Rate = (UR * 4) + 10 where “UR”=Unemployment Rate

Here is what the Top Marginal Rate (the one the rich folks pay) would be at different Unemployment Rates (where poor folks are out of work).

Unemployment Rate = 10.5%  Top Rate= (10.5 * 4) + 10 = 52%
Unemployment Rate = 8%  Top Rate = (8*4) + 10 = 42%
Unemployment Rate = 5%  Top Rate = (5 * 4) + 10 = 30%
Unemployment Rate = 2%  Top Rate = (2*4) + 10 = 18%

See how it works.  Think about it.  Republicans say when rich people get more money they invest in creating more jobs because rich people are all small business owners who take any extra money they have and put it into hiring more people for their businesses whether they need more people to work in their businesses or not.

Now this “Unemployment Rate tied to the Top Tax Rate” is just what we need to give rich people even more of an incentive to do what they really want to do—hire more poor people or not-so-poor-but-not-so-rich-either people.  The Rich get to control their own top tax rate by putting people to work.  If they don’t, then the government gets to take more money from them to help pay for things like unemployment insurance, food stamps, housing for the homeless, etc. 

This is a great idea.  But, let’s make one sight modification to give rich folks even more of an incentive.  Let’s say they get the Unemployment Rate down to 0%--everybody is working.  Well, we’ll just throw out that Top Tax Rate formula for something really simple, 0%.  That’s right, if the rich folks hire enough of the poor folks so they aren’t any poor folks or not-so-poor folks or rich folks, for that matter, who want to work who can’t find a job, then we’ll say “Good job rich job creators, your top rate is nothing—doesn’t exist.”

Write your Congressman today.  This is an idea has legs.

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