How to fix the world.

HOW TO FIX THE WORLD

The biggest problems in the world today are caused by the increasing divide between the rich and poor. I see one of the most powerful forces creating this divide is the pressure from rich and powerful shareholders to continually increase profits by driving up prices and reducing customer service. While there are exceptions, for most large corporations, who are governed by Boards of Directors who themselves belong to this wealthy shareholder class, there is only an incentive to increase the shareholder dividends. In any business there are only two ways to do this: increase prices or cut costs.

My solution is at add a sales tax to every dividend cheque issued that is inversely proportionate to customer satisfaction. Customer satisfaction would be measured by an incorruptible third party organization who would issue "grades" similar to school grades rating customer service from 0 for the absolute worst customer service in the world to 100 for the best. Whatever the grade is, it would be subtracted from 100 and the resulting figure would be the tax applied to every dividend cheque issued in that fiscal quarter. If companies decided to not issue a dividend cheque because of bad customer service, the taxes would be applied anyway based on the maximum dividend paid over the previous 10 years. This corporate tax would be taken from worldwide gross income before any expenses or deductions are applied.

How would this work? Let's take a few examples - note these are examples only so the numbers are used for illustration purposes only, not based on actually statistics.

Let's say Apple Computer, who consistently has among the highest customer satisfaction rates in the world, ends the year with 90% of customers saying they are satisfied. Apple issues a dividend of say $20.00 per share.  Those receiving the dividend cheques would see a tax deduction of 10% (100 - 90), or $2.00 per share deducted from their cheques, netting $18.00 per share. The deduction could not be claimed back either on corporate or personal tax returns.

Let's now look at XYZ Cable Company (actually his could be almost any cable company in North America) ends the year with one of the lowest customer satisfaction rates at 10%. It too issues a dividend of $20.00 per share. Those receiving the dividend cheques would see a tax deduction of 90% (100 - 10), or $18.00 per share deducted from their cheques, netting $2.00 per share. The deduction could not be claimed back either on corporate or personal tax returns.

Suppose ABC Company, having had a terrible customer rating over the last year and also having increased profits 1000%, declares they will not be paying out dividends but will instead start a huge share buyback to allow shareholders to benefit from the rocketing share price. At this point the government would tax them the same tax they would have paid as if they had issued dividends, based on the dividend history for the last 10 years. In addition, companies that use any tactic to transfer more wealth into the pockets of rich shareholders without improving customer service scores would find those additional "gains" taxed at the highest 90% tax.

What would be the outcome of all this? One hell of a lot of complaining from the uber-wealthy to start, and a flow of investment into companies who have outstanding customer service. We have suffered long enough. Companies like Apple have demonstrated that there is money to be made in providing quality products and superlative customer service. Other companies have to get on board even if it means dragging their board of directors and wealthy shareholders kicking and screaming in the process. In the end, better customer service will leave more money in our pockets and happier consumers. Anything else will result in chaos and continuing decay of our consumer society where the rich will live in exclusive gated and armed enclaves while the rest of the population scrapes through their discarded scraps outside.

SHARE THE WEALTH - POVERTY NO MORE.