Peggy Noonan penned a telling article about the US economy in the Wall Street Journal: she says the focus should be on jobs, because the country needs jobs more than it needs class warfare and threats of doom and gloom from President Obama…..even though 236,000 jobs were created in February, much better than expected. She is certainly right that with vastly reduced unemployment our economy would be in significantly better shape, and budgets could be balanced more easily as fewer would be relying on government aid, and many more would be inserting tax dollars into the government coffers. She thinks the culprit is Obamacare that scares off companies from hiring……yes, that certainly needs tweaking. Personally, I think the tax code needs the most urgent attention when you consider that it currently encourages large corporations to house profits outside of the USA…..instead of investing them here, preferably in job creation.
The build-up of offshore profits — totaling almost $ 2 trillion — is increasing because of incentives in the U.S. tax code for booking profits offshore and leaving them there. The stockpiles complicate attempts to overhaul the tax system as lawmakers look for ways to bring the money home and discourage profit shifting.
What if the USA instituted a policy right now that allowed companies to bring back those profits at a flat tax rate of 25% but only if they invested 25% ($ 500 billion)of those funds into job creation. $ 500 billion would have to go towards paying down the US deficit. The other $ 500 billion would create FIVE MILION jobs paying $ 50,000.00 per year for TWO YEARS. Companies could still boast how smart they were at making money, but this way they would actually be helping the country AND themselves by creating 25 million new viable consumers…. consumers who don’t require government assistance, consumers who pay taxes, who buy goods, who buy houses, who buy I-phones, that will fuel demand…..that will only help further fuel corporate profits.