opinion

Why the minimum wage should start at $20 per hour

Since such a loud segment of the American people think a mandatory minimum wage increase is a good idea, the following is a sketch of what might allow employers to pay employees a starting wage of $20 per hour.

First, it is only reasonable to maintain that such a change in the minimum wage not force employers to lose money. What use is a minimum wage if it is a job-killer? In short, employers need protection, i.e. they must know that profits and prices will not be affected by the proposed increase in minimum wage. Thus, the fundamental question is how to fund an increase in the minimum wage while insulating those that create and sustain jobs. What follows are a few common-sense recommendations to accomplish this goal.

• Sales tax: A general sales tax must apply to all purchased goods, including food for home consumption. Not only will this generate tax revenues on an ongoing basis, but also it may help mitigate the obesity epidemic worsening in this country. Only medical should be exempt from sales tax.

•Eliminate the capital gains tax: The smartest economists from Milton Friedman to Alan Greenspan have urged elimination of this tax. The capital gains tax is a tax on entrepreneurial success, and thus discourages what is perhaps this country's most valuable economic asset — the uniquely American "can-do" spirit. More specifically, it is a penalty on productivity, investment, growth and capital formation. Entrepreneurial activity is the key driver of job creation and economic growth; and capital gains taxation discourages such activity by a variety of means. Capital gains taxation is not indexed for inflation, which means "a large share of the capital gains that are taxed is not real gains but inflationary gains. The government should not tax inflation."

•Eliminate the corporate income tax: Currently, the U.S. corporate income tax is 35 percent, which is the highest rate in the world. Moreover, the U.S. is the only country to tax repatriated offshore profits.

•Eliminate the unemployment tax: These tax revenues are used to fund both inefficient state workforce agencies and benefits to eligible unemployed workers. How did this become the employer's responsibility in the first place? It doesn't make sense. Under this tax employers are made responsible for paying an unemployed former employee and the government agencies taxed with finding a new job for the former employee. It is ridiculous to make an employer fund the unemployed and those who serve the unemployed because being an employer means paying only those who agree to work for you.

• Entitlement reform: The entire welfare-entitlement complex is in dire need of reform. The defining attributes of this complex are waste, fraud, abuse and failure. Yet, no politician has the courage to touch it. And such cowardice only exacerbates the suffering these programs were meant to alleviate.

• Social Security reform: In the worlds of Milton Friedman "The payroll tax is arguable the worst of our bad taxes. It should be eliminated as part of the privatization of Social Security."

• Tort reform: Tort reform is a must and its most immediate impact on employers would be to lower the astronomical cost of liability insurance. In other words, we must stop the great "humanitarians" before they make it impossible to do business in this country.

It is time for Americans to take America back.

Steven Strauss is a resident of Fort Myers Beach.