Now it’s time to pay for the U.S. Jobs Repatriation Act. Oh, you haven’t heard of that new legislation?
Well, it’s not exactly a White House, Congressional, or even a candidate proposal. It comes directly from yours truly.
In my previous two columns, I outlined how the elimination of tax loopholes could be achieved by implementing a 20% flat corporate tax.
It would provide the advantage of lowering taxes for small businesses and raising taxes on the corporations who have avoided paying their fair share of tax for many years. In addition, I stated that jobs don’t need to be created, they already exist.
These existing jobs simply have the wrong workers occupying the positions, namely foreigners, not Americans. Employers should not be asked to create additional jobs they don’t need, and we all know that no amount of bribery will make that happen.
Therefore, the solution is for corporations to simply fire their foreign employees and replace them with American employees. Now comes what some say is the hard part, but actually, it’s rather easy.
Yes, I know that corporations hire foreign workers because it’s cost effective. It’s not because of skill or work ethic, it’s just cheaper, so lets just eliminate that excuse.
First, calculate the exact cost to the corporation per non-U.S. employee. Next, develop a reasonable wage for a U.S. worker based upon the community in which the employee resides.
At that point, the exact cost to repatriate the jobs will be known. That cost per employee would then be credited against the dollars the corporations will pay under the new 20% flat tax.
This makes the action of rehiring Americans cost-neutral.
Here’s an example: An American worker with an annual salary of $35,000 per year vs. a foreign worker with an annual salary of $5,000 per year = $30,000 x 10,000 workers = a $300,000,000 credit.
As a result, the corporation walks away with the same cost. The U.S. government, though losing corporate tax, would collect income tax from the American workers.
More importantly, $350 million would be infused into the local economy, and the multiplier effect on other businesses would be truly enormous.
Along with his 40-years of dedication in the financial services industry, Bill is the President and CEO of GPSforLife, has recently authored a highly successful book entitled 44th: A Presidential Conspiracy, publishes his dynamic monthly financial newsletter MacroProfit, and faithfully continues his third decade on the radio with It’s All About Money, which can be heard weekdays on Money Radio in Phoenix and in podcast form on his website (and on smartphone apps) published at billtatro.com weekdays at 5pm Eastern. Bill can be reached via email at email@example.com and on Twitter @tatroshow.