Free Market and Corporate Regulation

Hypothesis

I got a contract to clean a football stadium. I estimated it will take 15 people to clean it in 4 hours. So I hired a few and took some of my friends all together 15 people, did the job in 4 hours and paid each one of them at the rate of $10/hour (much higher than the minimum wage of $6.75). So I paid $10 X 4hours = $40 per person. So for 15 people I paid overall $40 X 15people = $600.00. Is it fair? Yes because I paid $3.25 more than the minimum wage!

Now if you know I got $7000.00 for the contract to clean the stadium and I made $6400 in the same 4 hours do you think I was fair to the 15 workers I took to get the job done?

I make sure my workers do not know how much I got for the contract. So they think I am fair (as I paid more than the minimum wage) and keep working for me when I call for similar work.
So within a few years I get many contracts and make lot of money and get some robos and cleaning machines to make the job easier but as I can get away with my workers I reduced the number of workers to clean the stadium from 15 to 10 and started paying $9/hour. With the equipments I have the job is 'effeciently' done at a shorter period with less workers so my profits go high. I get $9000 (inflation) for cleaning the stadium but I pay only $9/hour (still fair as the minimum wage has gone down to $6.50) my profit has gone up ($9000 - ($9 X 3hours)X10workers) = $9000 - $270 = $8730!

I do not tell my workers how much is my profit in the name of confidentiallity!
Some of the workers whom I laid-off as I do not need them (as the machines have made the jobs 'efficient' and easier) tried to get similar contracts in town BUT FAILED because they could not COMPETE with me as I have advantage over them through my modern machines and money that I already have!

THIS IS CAPITALISM AND FREE MARKET IN OPERATION NOW!

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If we want real free market and fair play we need real good regulations!
This are my ideas for a better Free Market!

1. The CEO of a Publically owned Corporation should not be the CEO for more than 12 years (Maximum term limit).

2. The Board of Directors should have term limits upto 12 years maximum and no one should be in the Board for more than one Public company at a time.

3. All salary and compensation for any given post/position (like CEO, Board od Directors, Senior Engineer, Manager Level 1, Worker Level 1 etc ) should be readily available and accessibile to the employees and to Public.
E.g. Company X
For 2009
CEO - Range $1,500,000 to $7,500,000 per year
Director - Range $400,000 to $600,000 per year
Manager Level 1 - Range $70,000 to $75,000 per year
Worker Level 1 - Range $18,000 to $23,000 per year

4. A company that is classified as Medium and above should have a safety fund (alloted from its profit) to pay all its employees salary for the next 2 years.

5. All company that is classified as Medium and above should guarantee salary for all its employees (This is purpose of the safety fund given in item 4 above) for the next 2 years.

Note: A Medium company can be classified as having more than 15 workers or that earns more than $5,000,000 in revenue a year.

6. All company that is classified as Medium and above should have Union for all its employees (White and Blue Color). Election for the Union should be held anywhere between every 3 or 4 years(one term) and no one should be in the Union board of executives (President, Vice-President, Secretary etc for more than 12 years - Term limit). Union should not have the power or say on whom to hire and lay-off but should be involved only in the welfare / benefit and salary range negotiations for various job categories.

7. All employees in a Public Company should be elegible for the same amount of Stock Option. (Say upto $10,000 a year as decided by the Board of Directors, Mangement and Union. The CEO and Board of Directors or no one should have extra stock options!)

8. Trading of Stocks in Stock Market

Every companys' stock value should be evaluated on a quartely basis and this should be the face value of the stock for that quarter.
No day trading - Day trading as well as frequent trading of a stock by the same person leads to gambling of stocks and artificially change the worth and non-worthiness of a stock.
So no one should be allowed to buy and sell the same stock within a period of 3 months.
If a person wants to sell a stock within less than 3 months then one other period to sell should be one week prior and one week after the official quarterly evaluation and public announcement (release) of every company's stock value.

For e.g.

Every Public Company's worth should be evaluated an released on say
Jan 31 of a year, then
April 30 of the year, then
July 31 of the year, then
Oct 30 of the year.

Case 1. If I buy 15 shares of a Company's stock on Feb 15 of the year then I should be able to sell
either 3 months from the date of purchase (May 15 of that year) and any time after that
or
Case 2. one week prior the next evaluation date (April 23 to 29 of the year ) and one week after the evaluation date (May 1 to May 7 of the year). If I miss this period then the only possibility should be after the 3 months of purchase period as given in case 1 above.
This will prevent gambling and artificial worthiness/non-worthiness of stocks and prevent companies from collapse due to speculation/gambling.

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-Suresh

To a Better Democracy

As a country (Nation, Democracy, Kingdom, Empire etc) grows older, powers houses gets stronger and the interests of the rich and power holders overtake the interests of the common public that eventually leads to the demise of the nation. Unfortunately the American nation is going in this direction (Corporations grow above the law and its lobbiest become powerful than the law makers, Rich control the lives of the public through direct and indirect laws, average citizens work till death unable to retire, laws written by corporations in their favor, 95% wealth controlled by less than 10% of the population, public money used for the richs' cause without anyone's notice, Bribary for elected officals acknowledged as lobbying and customery, ...).

The following ideas can prevent the demise of a great nation and can help to shape a better democracy:

1. Everyone elegible to vote should vote (100% participation). If a person does not vote then he/she should not be eligible for Tax deductions and concessions.

2. These should be choice that states "No confidence in any of the Candidates" in the list of candidates that contest, so that one can choose this option while voting.

3. Win or loose, no one should be allowed to contest for a specific public office (Congress, Senate, Municipal, County) more than three times. (Note: If an elected official could not get his/her agenda done within 3 terms then he/she will never get those done. New Blood can. Also long periods of power and previlege will get a person out-of-touch with public's difficulties and reality. So this term limits is essential. As a rule of thumb no one should be allowed to be in power / hold public office for more than 12 years)

4. In America, a Senator is suppose to represent the best interest of the State he/she is elected from but the current system directly or indirectly affects other States also. For e.g. in the health care debate of 2009, say if both Senators from NY want Public option but they may not get it because the Public option does not get 60% vote from Senators even though there may be 58% vote for it. So it is an ironey that the minority - 42% that do not want Public option wins over the majority! Also the wishes of the State Senators (say NY) are not taken care! So the operation of the Senate should be changed such that if the Senators from NY vote for a public option then State of NY gets public option. Similarly if the Senators from Utah do not want a public option then State of Utah DOES NOT get a public option! This will directly affect the State the Senators represent and will truely reflect the opinion of the public from the State the Senators were elected (If the Senators go against the wishes of the people, people of that state will make sure the Senators are voted out of office as they are directly affected be their Senator's vote but not because of a decision vote in Senate from a Senator of another state for whom they did not vote for! - as is the case now!).
Note: The Senate is a State representation at the Federal Government. There are cases for which laws can be made applicable to willing states (like the health care example given above) and cases for which the law needs to be applicable for entire nation (like whether to go to war). If there is a tie in Senate vote (50%) then congress and President (the other two branches of law makers and executers) should decide whether the law should be made applicable to the entire nation or to individual States as voted by the Senators of the State.

5. All insurance (Car, home, life, health etc) should be run at the State or National level by 5 to 9 Non-Profit Organizations. There should be only 4 types of insurance (Normal, High risk, Luxury and Luxury High Risk) and each of this 4 catagories should be seperately administered within its own pool of insurance in such a way that it does not affect the other category in premium and compensation!

6. For ages upto 40 - 5 days a week as work week.
Normal work day - 7 1/2 (Seven and half-hours of work a day) hours with 15 minutes break for every 45 minutes of work. (The 15 minute break is included for 7/12 hour work calculation)
(e.g. Work starts at 8.00 AM; Work until 8.45 AM; break from 8.45 AM to 9.00 AM;
Work again from 9.00 AM; Work until 9.45 AM; break from 9.45 AM to 10.00 AM;
Work again from 10.00 AM; Work until 10.45 AM; break from 10.45 AM to 11.00 AM;
Work again from 11.00 AM; Work until 11.45 AM; break from 11.45 AM to 12.00 noon;
Lunch Break from 12 noon until 1.00 PM
Work again from 1.00 PM; Work until 1.45 PM; break from 1.45 PM to 2.00 PM;
Work again from 2.00 PM; Work until 2.45 PM; break from 2.45 PM to 3.00 PM;
Work again from 3.00 PM; Work until 3.45 PM; break from 3.45 PM to 4.00 PM;
Work again from 4.00 PM; Work until 4.30 PM; Leave for the day.

Note: Anyone that works overtime can work only upto a maximun of 10 hours a day including the 15 minutes break counted as work for work hour calculation. The extra 2 1/2 (Two and half hours work ) of extra time should be paid at 1.5 times normal compensation calculated on a daily basis.

7. As we are social living beings everyone should have paid vacation for their Birthday, Spouse's Birthday, Marriage day, Children's Birthday (upto a maximum of 3 children), 20 days annual vacation days, 15 days for burial of close relation; In addition everyone above age 40 should have the last friday of every month as paid vacation; In addition everyone above age 45 should have the first and last friday of every month as paid vacation; In addition everyone above age 50 should have friday of every month as paid vacation; So they work only 4 days a week but get 5 days a week pay. This helps for gradual retirement! Also no one should be allowed to work above 65 years of age but should be allowed to retire from 55 years of age onwards. Everyone should get Pension from 60 years of age onwards till death.

Note: If anyone calls the above plans as Socialism - so be it. At present Americans are fooled in a system in which the Rich enjoy Socialism benefits but rest 90% population are indirectly forced to work as insecure laborers for Capitalistic owners until death but with a dream of capitalistic hope!

-Suresh

Patent - Unfair to inventors

When you join a Company / University / Institution as a researcher or a developer, one of the first few papers that you sign will be to give away all your rights to the Company / University / Institution on what you may Invent / Discover during the period you work for the Company!

So Brain Power is enslaved to Money Power!
In order to earn a living most do not have a practical choice but to sign this unfavorable Patent paper that favors the Company!

A reasonable Patent share may be a have 30:30:10:10:10:10 i.e.
30% of the income that comes from a Patent goes to the company
30% goes to all the inventors/discoverers involved
10% goes to Federal Government
10% goes to State Government
10% goes to local (Municipal/County) Government
10% goes to charity as decided by the company and inventors(5% each)

- Suresh

Capitalism or Socialism

We made a huge cake 30 feet X 20 feet with 50 different color and flavor with the cake.
It was so huge in size for a single family. So we invited our friends and those who saw it was amazed with awe! We ate whatever we can and stored more than what we could eat for 7 days!
Still there was plenty so we encouraged our friends to eat whatever they can, try the different flavors and take what they want! In spite of this there was plenty left. So we called our neighbors and passersby to enjoy the cake. The colors and the aroma of the 50 different types within the huge cake took the guests to unbelievable enjoyment. As there was so much more the guests asked as if they can invite some of their friends! The answer was YES! and so more arrived with their own little treats to share.

As people rejoiced and more people arrived, the hosts thought that there may not be enough for everyone and requested the guests to limit themselves to a 5 pieces a person. Guests who came with their own little and huge treats expected a bigger share of the big cake and arranged to have more in exchange for their treat! After some time it so happened that there was very little cake and more people. So everyone was asked to have take only one piece no matter if they brought any treat themselves or not - A very reasonable way to share the original cake with everyone that was present! Many started to complain and some started to leave the party stating it was not much fun now as it was in the beginning of the party!

-Suresh

Be proud to be an American and Standup for America

While I was driving, I saw a car in front with a sticker -
"Be proud to be an American and Standup for America"

I started thinking what America meant - I could only think "Freedom and Opportunity" and I wondered and kept wondering does America mean "Freedom and Opportunity"...

-Suresh

A Dynamic Tax code

A Dynamic Tax code that can prevent the rich-poor divide and is fair for more than 90% of Americans

Tax Code
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The average salary of a country is the sum total of salary earned by all in the country divided by the number of people in the country.
The median salary means 50% of the population earns below that amount and the remaining 50% of the population earns above that amount.
At present (2009) the, say, median salary in America is about $45,000. This means out of the 300 Million people in America, 150 Million have income less than or equal to $45,000 a year (up to $45,000 a year) and the remaining , 150 Million earn more than $45,000 a year.

A good starting point to structure the tax code will be the median salary.

A New Tax Code
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The proposed tax code is dynamic as it is based on the median salary and adjusts the tax bracket automatically based on the median salary of the country.

1. Anyone earning less than or equal to the Median salary need not pay any taxes.

2. Anyone earning more than the Median salary and up to 10 times Median salary can be taxed 10% of what they earn above the median salary.

3. Anyone earning more than 100 times the Median salary can be taxed 10% of what they earn above the median salary and up to 10 times Median salary and can be taxed 90% * of what they earn above 100 times the Median salary. (This two layers of taxes is to prevent anyone who earns more from ending up with a lesser overall income after taxes than anyone that earns lesser . Please see the e.g. for details)

Note: * - The ones that are taxed at 90% can be given a special tax credit. Normally individuals that earn more than 100 times the Median salary (for 2009 in USA is more than $500,000 per year) are movie stars, sports atheletes, CEOs and celebrities. These individuals may not earn this high amount through out their career. So for a person that earned this special tax credit (by paying 90% tax when he/she earned more than '100 times the Median salary' ), when every his /her earning goes below the '100 times the Median salary' range the individual can be paid from the special tax credit (they earned through the 90% tax payment) to bring the earning for the year to the '100 times the Median salary' value ($500,000 for 2009). This is like a insurence as well as saftey net for high earners that did not plan / manage their money. This also prevents inflation. Please see example for clarity and understanding this idea.

E.g.

1. So with the current median salary of $45,000 in America in 2009,
anyone earning less than or equal to $45,000 need not pay any taxes.

So the net income is $45,000

2. Someone than earns $95,000 will pay the following tax.
For $45,000 no tax.
For the remaining $50,000 at 10% ($95,000 - $45,000 = $50,000) = $5,000

So the net income is ($95,000 - $5000) = $90,000

3. Someone than earns $497,000 will pay the following tax.
For $45,000 no tax.
For the remaining $452,000 at 10% ($497,000 - $45,000 = $452,000) = $45,200

So the net income is ($497,000 - $45,200) = $451,800

4. Someone than earns $502,000 will pay the following tax.
For $45,000 no tax.
For $455,000 at 10% (the amount between $500,000 and $45,000 i.e. $500,000 - $45,000 = $455,000) = $45,500
For the remaining $2,000 at 90% (the amount above $500,000 i.e. $502,000 - $500,000 = $2,000) = $1,800 *

(Note: * This $1800 will also go as a Special Tax Credit for the person.)

So the net income is ($502,000 - ($45,500 + $1,800) ) = $454,700

5. Someone than earns $5,000,000 ($5Million a year) will pay the following tax.
For $45,000 no tax.
For $455,000 at 10% (the amount between $500,000 and $45,000 i.e. $500,000 - $45,000 = $455,000) = $45,500
For the remaining $4,500,000 at 90% (the amount above $500,000 i.e. $5,000,000 - $500,000 = $4,500,000) = $4,050,000 *

(Note: * This $4,050,000 will also go as a Special Tax Credit for the person.)

So the net income is ($5,000,000 - ($45,500 + $4,050,000) ) = $904,500

Note on Special Tax Credit:
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Next year if the person's income is only $100,000, then from his/her special credit he/she can be paid $400,000 (to the 100 times median salary limit). At that time his/her special credit will become $4,050,000 - $400,000 = $3,650,000.

6. Someone than earns $75,000,000 ($75 Million a year) will pay the following tax.
For $45,000 no tax.
For $455,000 at 10% (the amount between $500,000 and $45,000 i.e. $500,000 - $45,000 = $455,000) = $45,500
For the remaining $74,500,000 at 90% (the amount above $500,000 i.e. $75,000,000 - $500,000 = $74,500,000) = $67,050,000 *

(Note: * This $67,050,000 will also go as a Special Tax Credit for the person.)

So the net income is ($75,000,000 - ($45,500 + $67,050,000) ) = $7,904,500 (~$7.9 Million a year)

Note on Special Tax Credit:
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The Special Tax Credit can add over the years based on what is paid every year at the 90% rate as tax. Say 5 years from now the person's 'Special Tax Credit' has grown to $90 Million due to his/her 90% tax payment over the 5 year period. The next year if the person's income is only $100,000, then from his/her special credit he/she can be paid $400,000 (to the 100 times median salary limit). At that time his/her special credit will become $90 Million - $400,000 = $89,600,000 )


Note:
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This can be the basic tax structure. Any incentive and tax breaks should be separately applied and obtained back later from the government

Distribution of Tax among various levels of Government

The tax revenue can be distributed among the various governments as follows:

1. 30% of Tax revenue to Federal Government
2. 30% of the Tax revenue to State Government depending on the population
3. 30% of the Tax revenue to Local Government (Municipal, County) depending on the population
4. Remaining 10% in Reserves for emergency funds and paying off debts.

Note: Someone may wonder what happens if everyone earns the same salary and if this tax code will work! Practically it is not going to happen - everyone with same salary will not happen; if that happens then a modification to this tax code is needed (Note: Every law needs to be examined every few years, say every 25 years, to make sure if the laws is valid for that current situation and environment!)


-Suresh

Solar Towers Farm

All solar farms so far constructed have Solar panels lined on the ground and occupy vast area of land! Why isn't the vertical dimension chosen for solar farm construction?

Here is my idea (Patentable!) to built Solar Towers Farm (Real Estate Solar Towers Farm) - Idea dated 16-Aug-2009, updated to this blog on 07-Sep-2009





-Suresh Marimuthu








-Suresh