« Avian flu economics 1: Potential impact on Asia | Main | What is China's real exchange rate? »

Thursday, November 03, 2005


Andrew Leigh


Dr. Darian Lance Smith

Global business development and Happiness will be perpetually retarded until a tax credit for profitsharing is implemented;
A profitsharing tax credit that allows the business to plow up to 25% of net profits back to employees instead of to the government, before business or government can misuse it.
This is the missing link of conservative and liberal economic theory, uniting both, as well as business-owners and workers into a built-in economic stimulus program that will refine capitalism into a global model that was meant to be, which will also restore moral leadership to the American vision of economic democracy.

Arthur Eckart

Darian, the U.S. tax system needs a major overhaul. It seems, being able to calculate Federal income taxes on a postcard would be ideal. A flat tax, e.g. 20% above $20,000 income, and an inheritance tax, e.g. 50% above $1 million, may be enough (along with eliminating capital gains taxes). It's important to facilitate, or at least not hinder, capital creation, under appropriate standards.

Arthur Eckart

Also, I may add, teaching more ethics for both rich and poor, along with more opportunities for entrepreneurship, may be better than redistributing income or wealth. Moreover, below are some examples of capital creation, almost out of nothing. Furthermore, many industries, particularly older industries, tend to increase the quantity and quality of output with fewer inputs.

Microsoft rose to dominate the home computer operating system market with MS-DOS in the mid-1980s. The company released an initial public offering (IPO) in the stock market, which, due to the ensuing rise of the stock price, has made four billionaires and an estimated 12,000 millionaires from Microsoft employees...

After the first day Google's stock was publicly traded on the NASDAQ, approximately 1,000 (or, almost 50%) of its employees were estimated to be "paper" millionaires. That day the stock price closed at $100.34...

In the cold, early morning hours of a Winter morning in 1980,
Apple Computer went public. By the end of that frantic day, 64 people had become millionaires...

Cisco's not a bad partner either - especially for its employees. Platinum-plated stock options have made at least 2,000 of its 16,000 employees millionaires (in 1998). Its employees are now some of the most productive in the tech world -even more so than Microsoft's. For the 1998 fiscal year, revenue per employee averaged $563,000 at Cisco, versus $535,000 up in Redmond.


Yeah, right, AE -- what the world needs is more millionaires ...

Arthur Eckart

Lafayette, the point is capital creation lowers interest rates, which benefits both rich and poor. Also, capital creation helps facilitate business start-ups (many small tech firms were started by employees of large tech firms), which creates employment and raises income. It's a virtuous cycle, which helps explain why the U.S. leads the rest of the world combined in the Information and Biotech Revolutions (in both revenues and profits).

April. 19, 2006

NEW YORK - The number of very rich people in the U.S. grew last year at the fastest pace in at least a decade as their moves into international stock markets, real estate and alternative investments paid off.

The number of households with $5 million or more in investable assets — excluding the family home — rose by 26 percent to a record 930,000.

The number of millionaires rose by 11 percent, to a record 8.3 million – the second biggest jump in the decade since they were surveyed.

The overall affluent market – households with $500,000 or more – rose by 7 percent to a record 14 million.



AE: "the point is capital creation lowers interest rates, which benefits both rich and poor."

I doubt you've talked to any of the poor recently. They are NOT getting the same benefit as the rich.

But, we've been down this rat-hole before, so I will spare you any redundancy.

The comments to this entry are closed.


  • TEST

  • Subscribe in NewsGator Online

Economist Weblogs



  • This is a personal web site, produced in my own time and solely reflecting my personal opinions. Statements on this site do not represent the views or policies of my employer, past or present, or any other organisation with which I may be affiliated. The information on this site is provided for discussion purposes only, and are not investing recommendations. Under no circumstances does this information represent a recommendation to buy or sell securities.