Larry -
(Note - this comment does not concern Intel directly - my apologies to you all)
The "progressive" tax system which we essentially live under provides a negative incentive of sorts. I liken this to the concept of "minimum wage".
If the taxes are LOWER for LOWER income levels, the incentive to increase one's income is greatly diminished. In the same manner, a low (or no) minimum wage provides a great incentive to somebody at that level to improve his position and salary by whatever means (let's assume these are LEGAL means) he can use - extra work, increased educational skills, entreprenurial activities, etc.
Nobody would care to make $1.25 per hour for long in this day and age.
Imagine a situation where the tax rate on income over, let's say, $50,000 was ZERO. Everybody and their uncle with an income below this level would make herculean efforts to raise their salary above $50,000 - every buckaroo above the magic $50,000 is a take-home-and-do-with as-you-please-buckaroo. That's REAL MONEY.
Can you imagine the productivity increases, investment expenditures, and otherwise stampede for new entrprenurial start ups, etc. if the benefits (increased income) were not taxed above this ($50,000) level?
To me, this is a POSITIVE INCENTIVE, exactly the opposite of the current tax structures, which are NEGATIVE incentives.
Keep in mind the totality of taxes that we are obligated to pay:
Federal Income Tax + State Income Tax (most states, up to 11% in California) + Social Security Tax (This money won't be seen again) + State Sales Tax + Federal Taxes on gas, booze, cigarettes, Local Property Taxes. Then there are license fees, business taxes, etc that apply to many.
I recall that the Great Tax Rebellion that prompted the "Boston Tea Party" was in reaction to King George III raising the taxes to about 10% or 11%. I may be slightly off on this, as it has been a few years since I studied American History.
I think we would ALL JUMP for that rate today!
Just look at your check book/bank account at the end of each year and compare that to your W2 earned income (plus investment income). The percentage that remains in our pockets is paltry.
Paul Engel |
