I was recently prompted, along with millions of other Americans, to come up with an idea or two that might creatively solve some of our nations problems. There were lots already, we’re talking thousands, but one idea did strike me so I though I would place it before some of the smartest people I know and see what they thought.
Basically it’s to develop a set of criteria for companies to qualify as a pro-American investment. The investors in these selected companies would get a lower capital gains tax on that investment, say 15%. This supposes that the Bush Tax cuts do expire and long term capital gains returns to the 20% level.
Some of the qualifications might be, a workforce that is at least 90% located in the US, a product that is directed toward improving US infrastructure, the development of innovations that would primarily benefit the US economy, or substantially improve the circumstances of any one of the many challenges we face today, like education, healthcare, alternative energy production.
The benefit would be to support investments in our own infrastructure, innovation and solutions for pressing issues by rewarding investors who put their money in these companies.
I see two problems right off which are both substantial and solvable. First this would establish a “golden” set of investments for potential stock holders and other investors. If enacted, massive amounts of money might well flow to these companies, which could upset the markets considerably. An investment tax rate of only 15% is a mighty fine reward.
Second, imagine the might of multinational corporations coming into play when congress tries to get this legislated. It could very easily turn into a have and have not badge battle, the winners being awarded with lower taxes on their stock.
There is one solution to both these problems, only give this status to smaller companies. Multinationals would be exempted from the beginning, and would not feel as threatened if only smaller companies were awarded this status. That would also alleviate the danger of a sudden change in market financing because there would only be a certain amount of stock or investments available.
What do you guys think?