How about we rethink tax incentives? Everyone, after all, likes to save on taxes. An approach called “social offsetting” could give us the incentives we need for a more just and productive world.
At the heart of this approach: carrots, not sticks!
Let’s reward companies that respect the needs of all a corporation’s stakeholders. Let’s give tax breaks to companies that behave responsibly — that pay a real living wage to workers and don’t pay their top execs more than 20 times their lowest-paid worker, that have a profit-sharing program in place, that make no political contributions, that offer employees adequate training and flexible hours, that use renewable energy, that do not shift profits overseas to avoid taxes.
Social offsetting in this manner could make a major contribution to reducing inequality and moving us forward and closer toward prosperity for all.
Social offsetting would use financial incentives to encourage socially responsible business behavior. Those companies that take these incentives would quickly be seen as good employers and have an easier time attracting the best employees. They would be off and running to success and sustainability.
A corporate income tax structured to recognize good corporate behavior would be a fair tax. We all have a hand in creating the wealth our economy generates. That wealth just needs to be shared more equitably. And corporate income taxes — taxes on profits — don’t increase the cost of doing business or distort the economy. They only kick in below the bottom line, after expenses and revenues have been calculated and tallied.
With social offsetting, a corporate income tax return would become a badge of honor for responsible corporations and a source of shame for corporations that concentrate wealth at our economic summit. With socially offsetting, we could see more companies making a positive contribution to all of society, not just for the privileged few.
With social offsetting, wealth would start coming home where it was created, which is not in Bermuda!
Tom Burgess, the author of From Here to Prosperity: A new political agenda for a sustainable economy and greater social justice, has worked as the CEO of a public relations firm that operated in 80 countries.