Smart taxes

Long ago someone described the tragedy of the commons. It is an allegory of how disastrous it can be when a group misuses a commodity that is needed by many common businesses. Today’s tragedy is of the human. As we allow the cost of labor to be controlled by market forces we are creating a poorer and less desirable world to live in. Instead of the field being ruined, we are allowing countries to be decimated. But there is a solution for this, one that John Maynard Keynes described during the depression. Taxation.

Having a minimum wage sounds like a solution, but in reality it does nothing. There is no social consideration when using this tool, and, if free market was being nudged by taxation, it would not be needed. The key is to come up with a taxation system that will allow the middle class to have access to resources at a predetermined level. In this way not only can we grow the middle class, we can generate prosperity at levels achievable before this time. The first thing that must be done is work within the current monetary system until the block chain goes mainstream.

Here is an example of this strategy in action. Let’s say that it is decided that a company is paying the majority of their workers a decent wage but over the years the buying power of these employees has slipped from middle class to lower middle class. At the same time the top executives has grown. The gap has gotten to the point that the lowest paid employee makes 1000 times less than the CEO. We determine that to put these people back to the middle class, we want them to receive 10% more money. So the tax should be simple, on profits, and to 75-90% on wages (including bonuses) on employees earning more than 100% of the lowest paid. That will not have a lowering effect as much as a raising effect. It will create more wealth and generate a more harmonious environment for people to live in.
According to Maslow’s Pyramid of Needs, once people have their basic needs met, they will pursue other endeavors. Creating safety, through manipulation of the middle class, will allow people to pursue their dreams. It will take a task force and many brilliant minds to help decide what is the best level of income people should strive for, and this needs to be a regionally based system of taxation.

For example, when the minimum wage was increased in San Jose, CA local businesses benefited. So much so that large increases didn’t cause much complaint. Once the lowest paid had more money, the economy improved. However, when the same program was used in Oakland, businesses suffered. That market could not support that increase.
Sometimes there will need to be some trial and error to find the right spot to balance the taxation and the profitability of the business. The goal is never for the business to fail, instead, this plan hopes to build business and increase the middle class to levels that go beyond the 1950’s. When taxation has been responsible used as a means of controlling the economic portion of the economy it has been very successful. This is not something that should be just established and forgotten though. Like a garden, it must be tended for the plants to grow. If tended daily, that graden will attract crowds. Left to it’s one devices, it will not be usable and produce little fruit. It’s time that we gave people the freedom to create and grow. We need to end the excess and both ends so America, all of America, can thrive like never before.