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Sunday, June 15, 2008

thoughts on taxes and the economy

When it comes to the economy and taxes, at the moment the mentality of giving the tax breaks to the wealthiest of individuals and families isn’t working as well as it has in the past and as intended. This is due to the fact that these individuals have the same mentality as others when it comes to more for less, instead of it being product based it is based on how much service can they get for the cheapest possible price, this would include the salaries of the people offering those services along with trying to get the people who provide services to them to do more work for the same money that they have been receiving.

Most business’s are looking to find ways of saving money in today’s economy to the point that if they have to choose where they can actually save money given the cost of supplies and the salaries of their workers. At times saving money and actually producing the product or services are at odds with each other and usually the product or the employees loses out, in favor of maintaining or increasing the profit margin for the company.

With the rising prices of products and services the biggest losers are those companies that can no longer sell their products due to the cost of their products or services becoming too expensive for their targeted market stemming from not being able to afford their products any more due to stagnating incomes and rising costs. This is even starting to happen with the everyday household necessities and it was evident with the stimulus package when the middle and lower class’s went to the places that gave them the largest product amount for their money and to stores that enticed those same customers by giving gift cards for a percentage of their rebate check or giving a sale percentage off of the total bill for spending money at their stores.

Tax cuts can be a good thing provided they are in the industries that show real growth potential and are willing to make sure that their companies have what is needed to grow which would be a workforce that is compensated in ways to keep the companies potential growing, this would include salary and health care incentives along with offering various ways of letting their employees save for their retirement.

It would be very short sighted to give blanket tax cuts or credits to everyone within certain income brackets or companies which that have really high corporate profits. A blanket tax cut causes animosity for those in lower brackets especially when those individuals and companies choose not to live up to the premise behind those tax cuts in favor for higher short term profits. Any and all tax cuts which are geared towards those upper income and profit levels should be only allowed when they the individuals and companies are geared for long term profits and corporate sustainability rather than the fast cash that would be provided by such cuts without regards to sharing the wealth to those employees that did the bulk of the work in getting the companies to those profit levels.

The economy may be based on supply and demand to a great degree, but due to the rising costs of even the basic necessities of every day life that demand is going down creating problems for those companies who are producing products based on past demographics, causing those companies to shrink their work force due to a lack of money coming in but that is just a short term fix and ends up hurting those companies long term due to the fact they are adding to the problem by forcing those employees to go on unemployment or take lower paying jobs which causes their former employees to by less of that product if it is an everyday item used by their employees.

We also need to be looking at expanding on industries which can take our economy in new and more productive directions in regards to bringing in new taxes for the local, state and federal government while producing a product that can produce positive job and salary growth. A good deal of this would be to better educate people in general and retraining people to help be productive enough in those industries that need trained people to further the growth potential for the companies. These would be the types of industries where tax breaks and credits would be helpful especially if they are set up be given to those companies willing to train or send their workers to school to learn the needed skills.

All tax cuts for companies and corporations should be set up on an incentive basis geared toward helping the employees rather than helping the pockets of those high up in the chain of command. Ways of setting up the tax breaks should be like giving tax breaks to those companies and industries that provide education incentives for their employees and more of a tax break if these industries and companies are willing to provide education incentives for their employee’s immediate families.

For those companies that have the ability to allow their employees to use public transportation instead of driving should have tax breaks in place if they have position where the hours of operation for the position fall with in the hours of operation for the public transit system and the company actively promoting the public transportation system, allowing the companies to take advantage of the same or similar laws that make it attractive for the employees to utilize the public transit systems.

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