There are two fundamental things which power the economy, Calories and Joules. Calories are the most important for they are used in producing human capital which can produce physical capital and technical knowledge that minimizes the labor needed to produce certain items. Efficient allocating of Calories is vital to the economy, and this can be summed up in one term, "education". The efficient allocation of Calories results in greater productivity. Some of these Calories are used to operate researcher's brains, which at times often result in improvements in productivity. There is also a drag force that goes against the economy, and that is called waste - the result of inefficient allocation of what I might call "factors of management" which either results from a lack of education or indifference to the consequences known to exist. Companies do not like waste; in supermarkets, this is often called "shrink". Companies which utilize more capital more effectively make more profit, and usually pay more corporate tax (in dollars).

However, it makes sense that the employees of a profiting company reaps the benefits of their profiting company as do investors of the company's stock. Therefore a corporate tax credit equal to the extra wages and salaries (that is, until the corporate tax credit equals the corporate tax), I believe, should be the means by which extra wages and salaries be justified, so that the employees can feel that an improvement in their efforts has done them well (by literally profiting off the profits of their own company).

It can be concluded from the math involving a corporate tax credit equal to the extra wages and salaries (up to a certain limit), that company would actually retain more money than they would have otherwise. From there, supply can be increased compared to normal, as this would occur in parallel to both a corporate tax credit and an increase of consumer purchasing power, and therefore the ability for people to afford their own health care, insurance, tuition, etc.

If it were up to me, I would do that under the condition that the company personnel are aware of their ability to increase their paychecks as a result of the corporate tax cut. Higher demand/capita should make it financially easier to increase supply/capita, and therefore the easier to raise standard of living.

Health care is expensive when (medical) supply is severely limited. Supply is less numbered when it has high costs. Companies deserving new corporate tax credits (defined below) as a result of their increase in pay to employees (without discrimination with regards to "class") would be able to increase their supply as well give greater rewards to their employees who provide the human resources and technical knowledge to manage, improve, and increase the physical capital necessary to increase the supply. Early adopters are helpful for bringing the price of new products down. It is these people who can afford to cover these costs of these new technologies in the private sector.

Local and state funding through sales taxes would increase, which may help to compensate for the waste that sheds from the higher levels of productivity.

My plans, I believe, are good for business.

M = m + (s-a-b)(1-t) + proposed tax credit
Where:
m=initial money
M=final money
s=sales
a=expenses excluding extra wages and salaries
b=extra wages and salaries
s-a-b=profit before corporate tax
t=the corporate tax rate
1-t=the percentage of profits ‘s-a-b’ left over after corporate tax ‘t (s-a-b)’
For b less than or equal to corporate tax, value of proposed tax credit=b
For b greater than corporate tax, value of proposed tax credit=value of corporate tax

If value of proposed tax credit=b, then
M = m + (s-a)(1-t) + tb
Where:
tb=the extra money the company keeps as a result of paying higher wages and salaries ‘b’.

The below is Table 1:
Values of Income Before Tax (thousand dollars), Income Tax Expense (thousand dollars), and Number of Employees come from finance.yahoo.com .

McDonalds Burger King Blockbuster Electronic Arts ConAgra Costco Walmart
MCD BKC BBI ERTS CAG COST WMT
Income Before Tax (thousand dollars) 3,701,600 78,000 523,500 389,000 955,400 1,548,962 17,358,000
Income Tax Expense (thousand dollars) 1,099,400 31,000 64,600 147,000 309,700 485,870 5,803,000
Income Tax Percentage 29.70% 39.74% 12.34% 37.79% 32.42% 31.37% 33.43%
Income just after tax 2.60E+09 4.70E+07 4.59E+08 2.42E+08 6.46E+08 1.06E+09 1.16E+10
Income after wages and salaries w/o income tax expense 2.85E+09 5.58E+07 4.66E+08 2.82E+08 7.22E+08 1.18E+09 1.30E+10
Improvement over old system 2.52E+08 8.82E+06 7.10E+06 4.03E+07 7.58E+07 1.16E+08 1.45E+09
Number of Employees 447,000 30,300 41,900 7,200 33,000 60,500 1,800,000
Improvement over old system/Employee $563.21 $290.97 $169.36 $5,599.35 $2,297.44 $1,917.59 $807.75
Extra wages and salaries 8.48E+08 2.22E+07 5.75E+07 1.07E+08 2.34E+08 3.70E+08 4.35E+09
Extra wages and salaries/Employee $1,896.30 $732.13 $1,372.41 $14,817.32 $7,087.41 $6,113.32 $2,416.14
Extra wages and salaries / Loss of Income Tax Expense 77.10% 71.56% 89.02% 72.57% 75.52% 76.12% 74.94%

Bank of America Exxon Halliburton Yahoo Northwest Airlines Chevron Washington Mutual
BAC XOM HAL YHOO NWACQ.PK CVX WM
Income Before Tax (thousand dollars) 24,480,000 59,432,000 2,492,000 2,543,582 2,457,000 25,197,000 5,438,000
Income Tax Expense (thousand dollars) 8,015,000 23,302,000 79,000 767,816 7,000 11,098,000 2,006,000
Income Tax Percentage 32.74% 39.21% 3.17% 30.19% 0.28% 44.04% 36.89%
Income just after tax 1.65E+10 3.61E+10 2.41E+09 1.78E+09 2.45E+09 1.41E+10 3.43E+09
Income after wages and salaries w/o income tax expense 1.84E+10 4.27E+10 2.42E+09 1.95E+09 2.45E+09 1.75E+10 3.97E+09
Improvement over old system 1.98E+09 6.56E+09 2.43E+06 1.78E+08 1.99E+04 3.39E+09 5.41E+08
Number of Employees 176,638 106,100 106,000 9,800 32,460 59,000 60,798
Improvement over old system/Employee $11,191.97 $61,856.73 $22.90 $18,166.73 $0.61 $57,516.26 $8,891.32
Extra wages and salaries 6.04E+09 1.67E+10 7.66E+07 5.90E+08 6.98E+06 7.70E+09 1.47E+09
Extra wages and salaries/Employee $34,183.32 $157,766.26 $722.38 $60,181.84 $215.04 $130,585.44 $24,103.19
Extra wages and salaries / Loss of Income Tax Expense 75.33% 71.84% 96.93% 76.81% 99.72% 69.42% 73.05%

Merck Morgan Stanley Glaxosmithkline Goodyear Tire Ford Hewlett Packard Six Flags
MRK MS GSK GT F HPQ SIX
Income Before Tax (thousand dollars) 7,363,900 7,361,000 8,030,974 489,000 1,996,000 3,543,000 132,395
Income Tax Expense (thousand dollars) 2,732,600 1,858,000 2,290,385 250,000 512,000 1,145,000 3,705
Income Tax Percentage 37.11% 25.24% 28.52% 51.12% 25.65% 32.32% 2.80%
Income just after tax 4.63E+09 5.50E+09 5.74E+09 2.39E+08 1.48E+09 2.40E+09 1.29E+08
Income after wages and salaries w/o income tax expense 5.37E+09 5.88E+09 6.25E+09 3.24E+08 1.59E+09 2.68E+09 1.29E+08
Improvement over old system 7.40E+08 3.74E+08 5.08E+08 8.46E+07 1.05E+08 2.80E+08 1.01E+05
Number of Employees 61,500 53,218 100,728 80,000 300,000 150,000 2,500
Improvement over old system/Employee $12,025.58 $7,036.38 $5,045.80 $1,057.17 $348.41 $1,864.37 $40.34
Extra wages and salaries 1.99E+09 1.48E+09 1.78E+09 1.65E+08 4.07E+08 8.65E+08 3.60E+06
Extra wages and salaries/Employee $32,406.94 $27,876.62 $17,692.52 $2,067.83 $1,358.26 $5,768.96 $1,441.66
Extra wages and salaries / Loss of Income Tax Expense 72.94% 79.85% 77.81% 66.17% 79.59% 75.58% 97.28%

From the table above, the average increase in wages and salaries per employee is close to $1800, putting Walmart ($2400 extra yearly pay / employee) above average in the increase of wages and salaries possible (An extra 82K for them for every 34 parent years, allowing one of their kids to go to MIT).

As you can see, despite the increase of wages and salaries for a variety of businesses, these increases in wages and salaries are not nearly similar for all companies. In particular, employees of high tech companies such as Electronic Arts, Yahoo! , Merck, and Glaxosmithkline fare better than employees of restaurants and retail stores. Employees of financial institutions such as Morgan Stanley, Washington Mutual, and Bank of America fare similarly to those of high tech companies. The biggest winners displayed here are the employees of oil companies, who lay the foundation of the energy pyramid whose existence is vital for existence of capitalism.
So far, the incentive for teenagers to go to college to get a degree so they can get a better job is not lost. In fact, one may argue that given the superior benefit automatically given to highly-skilled workers over less skilled workers is an impetus for higher education. Meanwhile, the higher wages for employees in companies such as McDonalds and Walmart may reduce the demand for student loans for college from what it would otherwise be in today’s world of increasing tuition in American universities.

What does the government get in return? A shorter to do list. When ignoring increased federal receipts via individual income tax and increased in social insurance receipts (about 84% of the value of the total federal receipts), the maximum value by which receipts will drop (via this change) is around 11% percent (the share of corporate tax receipts). The amount by which government activity can be reduced as a result of these raises in paychecks is obviously hard to calculate. Meanwhile, the value of federal government receipts from taxes increase every year by a few to several percent. Would you want a pay like those shown the table above that requires a reduction in government receipts of less than 11%?

The uh-oh list (if you simply lower corporate taxes):

• Paychecks are not really increased by lowering of corporate taxes -> Percent of employed on welfare not really reduced by lowering of corporate taxes -> Lowering of corporate taxes (by themselves) have a non-maximum influence on the effectiveness of social security

• In some cases, there is little incentive for a company to increase paychecks beyond minimum wage -> In some these cases, no there is no incentive for greater pay for any employees -> These companies can't significantly increase what they pay in payroll taxes, because they pay corporate tax -> It is harder for these companies to improve funding for social security / employee because of the corporate tax

• A company with skilled workers leads to -> Better profits... However, no better corporate "tax credits" which are a function of increase pay leads to -> No new incentive to increase paychecks, such that -> Skilled worker's paychecks not directly affected by the hard work of the company as a whole -> Lower reap to sow ratio -> More work for less benefit -> Less happiness

• Traditional corporate subsidies are not guided by an invisible hand -> Much of talk is then required to get a subsidy proposal passed -> So, the government and the corporation use more money, energy, and gas used to achieve the same benefit that would be achieved more efficiently under my proposal

• One's demand for traditional welfare is in some cases lowered by lowering corporate taxes -> This should be transformed into a "definite" relationship by means of reform.

• Lowering corporate taxes allows companies to spend more money and in some cases prevent employees from getting into loans and debt -> This prevention needs to be improved

• Savings are not changed dramatically by lower corporate taxes alone -> Lowering corporate taxes make it easier for some employees (those who benefit) to manage personal savings (and for those who benefit, reducing debt is made easier) -> This relationship should be amplified

The shorter to do list (this system of corporate tax credits determined by the aggregate amounts of higher wages and salaries):

• Fewer people on welfare -> Less money needed for social security

• Greater pay for employees -> Greater funds from payroll taxes -> More funding for social security

• A company with skilled workers -> Better profits... Better corporate tax credits -> Better paid employees -> Decreased unemployment (and greater productivity - i.e. more bang for the hour) -> "Positive animal spirits" (note: Keynesian term)

• Introduction of large corporate subsidies guided by an "invisible hand" -> Less demand for other subsidies -> Less government management necessary to decide what subsidies are fair -> Less red-tape to deal with to get the same benefit -> Less waste -> Cleaner environment for government employees

• Less demand for traditional welfare-> Less demand for borrowing money in the public economy -> Lower interest rates

• Less demand for borrowing money in the private economy -> Lower interest rates are possible -> Less demand for borrowing money...

• Greater savings (definitely in the short-term) and debt is easier to pay -> Deficits in the public and private sector are easier to manage

Corporate welfare should primarily be an investment in maintaining human capital so that net human capital costs are ultimately minimized by better welfare whose underestimated importance is under-recognized. I say "ultimately," because quality is a means of assurance.

Bad

The less money people/governments earn -> The more people/governments borrow -> The less money they are able to save -> The higher the loan interest rates -> The longer it takes to reduce the debt -> Higher total debt to GDP

Good

The more money people earn -> The less people borrow -> The more money they are able to save -> The lower the loan interest rates -> The sooner debt may be reduced -> The lower the personal debt -> The less of paychecks associated with paying personal debt -> The less of corporate sales associated with paying personal debt -> The more of corporate sales devoted to things other than personal debt -> The less of what people spend (of GDP) is needed for paying debt -> Less of paychecks are devoted to paying debt -> An increase in net worth -> An increase in investment potential

Currently strong relationship:
The more people earn -> The more they are able to consume -> The higher the GDP
To scale up this relationship, people need to earn more.

Decrease in corporate taxes -> A increase in investment potential -> An increase in net worth -> Less of paychecks are devoted to paying debt -> The less of what people spend (of GPD) is needed for paying debt -> The more of corporate sales devoted to things other than personal debt -> The less of corporate sales associated with paying personal debt -> The sooner debt may be reduced relative to corporate sales -> The lower the loan interest rates relative to corporate sales -> The more money people are able to save relative to corporate sales -> The less they borrow relative to corporate sales -> The more money people retain relative to corporate sales

Currently weak relationship:
The lower the corporate taxes -> The more that is invested
To improve this relationship, if diminishing returns of physical capital is worse than diminishing returns on human capital, focus investment on human capital. Make better investment in human capital mandatory for the proposed corporate tax credit to take effect. This will have a positive effect on net worth. In turn, government spending may be reduced because of the inequities that are due to negative net worth among the populace are battled at home and at the job (so that the government does not have to deal with them as much) - allowing personal responsibility to count for what it's worth. Debt that exists right now can be eliminated if people who possess the debt had some way of paying for it, and this becomes more meaningful if this improved ability were the result of working for a profiting company who profits from a corporate tax credit equal to extra wages and salaries. For this reduction of debt to mean more, it has to be the result of increase investments (particularly in human capital).