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How We Could Create 15 Million Jobs and Eliminate the Federal Deficit

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A third measure--a one-time, one-year, 10% surtax on the $3 trillion total in hoarded corporate cash--would produce an additional $300 billion in government tax revenue.  


Therefore, a total of $1.15 trillion could be raised by these three measures in the first year alone.


A fourth tax measure could require the wealthiest households to pay the equivalent of the 12.4% payroll tax that the bottom 80% (i.e. the 92 million middle- and working-class households) already pay on their annual income.   If the wealthiest 1% of households were required to pay that same 12.4% on their total income (including their dividends, capital gains, interest, rent, etc.), just as the bottom 80%/92 million already do, the payroll tax would produce an additional $85 billion in tax revenues, in the first year as well as in every subsequent year.  


The next wealthiest 19% of households, about 22 million of them, earn both capital-gains incomes (like the wealthiest 1%), and wages (like the bottom 80%).   But they too now pay the 12.4% payroll tax only up to $106,800 a year and, like the top 1%, pay nothing at all on their capital-gains income.  


So, if they too were to pay the 12.4% payroll tax equivalent on all their salary, including that in excess of the current $106,800 ceiling, as well as on all their non-salary capital-gains incomes, it would raise another $85 billion a year.   The total tax revenues have thereby risen to roughly $1.32 trillion in the first year, and $255 billion each year thereafter.


That $1.32 trillion would more than cover the U.S. federal government's currently projected budget deficit of $1.3 trillion.   If the entire amount were dedicated to reducing the deficit, it would, in turn, eliminate any possible need to reduce:

  • social security benefits,
  • Medicare and Medicaid benefits,
  • student loan amounts,  
  • other social programs that might be proposed in the next U.S. budget.


A fifth and final tax proposal:   Impose a permanent transactions tax on all financial trades--stocks, bonds (per $100 value), as well as on the trillions of derivatives trades over the counter (including interest rate swaps, currency swaps, etc.).   A simple $1 fee for every stock trade would have virtually no negative effect on stock trading.   Similarly a 10-cents-per-$100 bond purchase fee/tax would amount to a mere $10 tax on the purchase of, say, a $10,000 U.S. Treasury bond -- an amount that would hardly deter the bond sale.  


With the passage of the Dodd-Frank financial regulation bill in June 2010, for the first time some derivatives trades will have to occur in clearing house transactions, which means they will now be recorded.   A financial transactions tax on derivatives trading (of similar dollar proportions as for stocks and bonds) would therefore raise additional and quite significant amounts of tax revenue.   In fact, an additional $150 billion a year in tax revenue would be raised from such a financial transactions tax.


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Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've (more...)

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