TAX LAW SUGGESTIONS

DEAR PRESIDENT OBAMA,

THANK YOU FOR YOUR SUGGESTIONS TO CHANGE THE TAX CODE.  I HAVE ADDITIONAL SUGGESTIONS TO USE THE TAX CODE TO INCREASE REVENUE AND TO MOTIVATE BEHAVIOR THAT HELPS THE UNITED STATES.

HISTORICALLY, THE GOVERNMENT HAS USED THE TAX CODE TO INFLUENCE BEHAVIOR THROUGH TAX BREAKS AND MOTIVATIONS.  TAX CONSIDERATIONS DO AFFECT BEHAVIOR.  UNFORTUNATELY, LOBBYISTS HAVE CAUSED THE TAX LAW MOTIVATIONS TO BE IN THE DIRECTION THAT HELPS THEM: THE COMPANIES GET TAX BREAKS.

THE PROBLEM WITH THIS IS THAT THE DESIRED BEHAVIOUR COMES AT THE EXPENSE OF REVENUE FOR THE GOVERNMENT.  THE FEDERAL AND STATE GOVERNMENTS CAN HELP THE REVENUE DEFICITS BY GOING THE OPPOSITE DIRECTION: INCREASE TAXES ON COMPANIES THAT PERFORM ACTIONS THAT ARE IN CONTRAST TO THE GOOD OF THE UNITED STATES AND THE UNITED STATES ECONOMY.

1.  INCREASE UNEMPLOYMENT TAX ON COMPANIES THAT MOVE JOBS OVERSEAS.

2.  WHEN COMPANIES PERFORM FINANCIAL CRIMES THAT HURT THE ECONOMY, SUCH AS THE RECENT ECONOMIC CRISIS, SHOULD SEE THEIR TAX INCREASE.   MONEY MOTIVATES THESE COMPANIES, SO THIS STRATEGY SHOULD WORK.  THIS ALSO DECREASES THE COST OF JAILING THE BAD GUYS.

3.  FOR CERTAIN CRIMES, THE PUNISHMENT SHOULD BE AN INCREASE OF THE TAX RATE, INSTEAD OF JAIL.  JAIL HAS A HIGH COST FOR THE GOVERNMENT AND THE INDIVIDUALS.  AN INCREASE OF TAX RATE FOR THESE PEOPLE HAS THE EFFECT OF INCREASING THE TAX REVENUE INSTEAD OF COSTING THE GOVERNMENT MONEY.  IT ALSO PREVENTS THE BAD EFFECTS ON THE PUTTING PEOPLE IN JAIL, INCLUDING EXPOSING PEOPLE TO OTHER CRIMINALS, THE DISRUPTION OF JOB INCOME TO THE PEOPLE AND THEIR FAMILIES, AND DAMAGE TO THE FAMILY STRUCTURE OF HAVING A PARENT IN JAIL.

THE BOTTOM LINE IS THAT TAX SYSTEM MOTIVATIONS CAN BE USED TO INCREASE TAX REVENUE RATHER THAN DEPLETE TAX REVENUE.  THIS IS A FAIR WAY OF INCREASING TAXES ON UNDESIRABLE BEHAVIOR, SO THAT THIS IS A WIN-WIN CHANGE THAT HELPS EVERYBODY, AND THE ECONOMY!

THANK YOU

DAVID