http://www.heritage.org/heritage/library/categories/theory/fyi102.html Mark Wilson and Angela Antonelli of the conservative Heritage Foundation offer a plan for "How to Raise Take-Home Pay without Destroying Jobs." As far as I can see there's only one problem with the proposal -- it calls on the government to enact policies. Why is it that "free enterprise" ideologues always come up with things for the government to do? Wouldn't it be refreshing if the people who profess a profound distrust of government intervention would, for once, think of something that corporations and wealthy people could do instead of obsessing about what government must do? According to Heritage Foundation reasoning, however, corporations and the rich are passive tax avoiders who adapt their economic behavior in response to whatever fickle loopholes the tax system offers them. C'mon, guys, don't these rich folks have any character? Here's a surprise for Heritage -- there is something corporations can do to reduce taxes and government spending, raise take-home pay, create jobs and strengthen their own bottom line without so much as a howdy-do from government. Will they do it? That depends on whether corporations are responsible, productive enterprises or just state-subsidized funding conduits for right-wing think tanks and lobbiests. (CEO's who want to find out how can contact me at the email address below). Wilson and Antonelli focus on the "tax wedge" between the employer's payroll costs and the take home pay of workers. They are right that the size of that wedge is oppressive. But ironically, many employers could substantially reduce the impact of the tax wedge on their own payrolls by negotiating more time off for experienced workers at the top of the pay scale and hiring new employees at good, entry level wages. An employer who offered a package of reduced work hours at a higher hourly rate -- say a 20% reduction in hours combined with a 10% hourly raise -- would have lots of takers. A recent study by the Families and Work Institute found that nearly two-thirds of respondents would like to reduce their work hours by an average of 11 hours a week, if they could. That is to say that instead of whining about the wedge, employers could leverage the wedge into a competitive advantage. "Reduce the workweek??!!!" I can imagine conservatives gasping in horror, "that would increase payroll costs and harm competitiveness." Wrong. If one takes into account only the fixed-cost, per employee portion of the wedge, reducing the workweek would increase cost per hour. However, as Wilson and Antonelli suggest, there is an opposite and often larger income tax "anti-wedge" that, because of its progressivity makes marginal hours of work more expensive. Taken together, these the wedge and anti-wedge make the cost per hour question very much a matter of other, local factors: pay increment scales, average seniority etc. Of course, conservatives would rather have a flat tax and eliminate government mandated benefits. That is to say, conservatives would rather lobby government to impose tax changes than make the best of whatever policy is in place. To do the latter would require more faith in free enterprise than conservatives can muster. Regards, Tom Walker ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Vancouver, B.C. [EMAIL PROTECTED] (604) 669-3286 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
