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Old 11-06-2007, 07:01 PM   #141
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OK, here's an excerpt from the minimum wage page from wiki. Here's my take on the 'support' issues:

Minimum wage - Wikipedia, the free encyclopedia

Debate - Support

Supporters of the minimum wage claim it has these effects:

Quote:
* Increases the average living standard.[15]
Maybe, but there is that raised cost of goods issue. Not sure if that is a big deal or not. And, IF it does result in fewer jobs, would the 'average' really go up?

Quote:
* Creates incentive to work. (Contrast with welfare transfer payments.)[16]
Well, I said earlier that I don't think it creates incentives if everyone gets a raise. I don't know about the comparison to welfare, might be something to that, but I don't know current welfare policy enough to comment.

Quote:
* Does not have budget consequence on government. "Neither taxes nor public sector borrowing requirements rise." (Contrast with negative income taxes such as the EITC.)[16]
Unless it results in some increased unemployment - the gov't has to deal with that.

Quote:
* Minimum wage is administratively simple; workers only need to report violations of wages less than minimum, minimizing a need for a large enforcement agency.[16]
OK, minimum wage is pretty simple, but not simpler than NOT having a minimum wage. So we are back to the previous question on whether it would result in more unemployment, which WOULD create more govt admin work.
Quote:
* Stimulates consumption, by putting more money in the hands of low-income people who spend their entire paychecks.[15]
Back to the question of whether the increased cost of goods wipes this out?It is at least a mitigating factor, I can't say how big of an issue it is.

Quote:
* Increases the work ethic of those who earn very little, as employers demand more return from the higher cost of hiring these employees.[15]
We've covered this one. I really don't think the employees are going to be much more motivated. It is the same job, it isn't a step up in responsibility - it is (almost be definition) the lowest responsibility job one could have. How can the employer 'demand more'? He can't threaten to hire someone else for less money. The employer can really only demand more from the people that he/she is paying MORE than minimum wage. Very weak IMO.


Quote:
* Decreases the cost of government social welfare programs by increasing incomes for the lowest-paid.[15]
I've heard this argument before, it sounds good, but I just don't have enough data to know if it makes sense or not. I would need to know -

1) What % of min-wage earners are recipients of social programs now? For example, my kids have worked min-wage jobs, they were not recipients of social programs. But I don't know the breakdown - obviously many are.

2) Would a few $/hr really make the diff in being on/off a social program? esp if costs of goods rise to offset some of that?

3) Back to the Q of whether min-wage increases would increase unemployment.

Bright eyed - sounds like you were 'cracking' there... better run off to the dailycos and get some nice fresh liberal kool-aid Just kidding, I really can't figure out where I stand on the issue either. I like free markets, but it does seem that if you are working and putting in a good effort, there is some minimum level of reward you should get for that. I don't like the idea of a business taking someone for all they are worth, just because you can. But I also can't help but fear that the consequences of fiddlin' with that free market will cause more problems than it solves.

Bottom line, I don't think it is as simple as 'raise the min wage and everybody will be better off by that $ amount'. But maybe the good outweighs the bad? Heck if I know!

-ERD50
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Old 11-06-2007, 07:14 PM   #142
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Bright eyed - sounds like you were 'cracking' there... better run off to the dailycos and get some nice fresh liberal kool-aid Just kidding, I really can't figure out where I stand on the issue either. I like free markets, but it does seem that if you are working and putting in a good effort, there is some minimum level of reward you should get for that. I don't like the idea of a business taking someone for all they are worth, just because you can. But I also can't help but fear that the consequences of fiddlin' with that free market will cause more problems than it solves.

Bottom line, I don't think it is as simple as 'raise the min wage and everybody will be better off by that $ amount'. But maybe the good outweighs the bad? Heck if I know!

-ERD50
Who me?

I don't like to read blogs, magazines or papers from like minded people, it creates tunnel vision. Instead I like to beat my head against concrete round these parts... I honestly am a toss up too...i just want the end result to be more efficient and fair...
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Old 11-06-2007, 07:48 PM   #143
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Are the not at the top of the list for suicide?
The Swedish suicides were surveyed too. They were healthy and happy to kill themselves...
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Old 11-06-2007, 08:27 PM   #144
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..I imagine there are some former highly paid execs on this board that would consider ER a 'different' form of motivation, rather than a lack of it.

I don't want to get into an 'illegal' worker debate, but if that is your belief then we should address the problem rather than the symptom. More buckets on the floor really does not 'fix' a leaky roof.-ERD50
ER was very much a motivation for me...some lose motivation to work no matter how much the money...some prime examples are some sports figures earning $5-25 million a year and who feel insulted or disrespected if they don't get what they feel they're worth for another guaranteed 5 years...
I don't want to get into the illegal debate or solve it with buckets or a new roof...my point is there is no true "free market" out there...

a little while after I asked the question why people who are not themselves in the upper echelon of earners, would want to prevent the raising of rates...I was walking Lily and listening to National Progressive Radio - they had a piece on why americans are against raising taxes (from15% to 35% - i guess they have some loop hole where they only have to pay 15%)on hedge fund managers making more than $100 million a year. It has to do with aspiration...that even though the chance of doing so themselves is near zero, they still think there's a chance they could do it too...
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Old 11-06-2007, 08:33 PM   #145
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OK, I finally took a minute to think about this idea that increasing the min-wage would increase the cost of goods that poor people need to buy.

It would, but not to any great extent. A min-wage worker will spend all they make. Increase their wage by 20% and they will spend that additional 20% also. But the price of the 'stuff' they buy is not 100% labor content, so only the labor content portion of that will go up 20%. So, it depends on the labor content of their purchases, but will never be 100%.

Seems obvious, but I had to think it through.

So it is a mitigating factor, but probably not too big a deal.

How about something else we could agree on? IMO, if we ARE going to have a min-wage standard, they ought to automatically index it to inflation! It's crazy to say it is needed, but then not index it. I've heard that the politicians do this, so they can vote on it every few years. Gives them something to talk about w/o dealing with the important issues We are doomed!


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Old 11-06-2007, 09:17 PM   #146
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1. I've seen how government works, I don't want to be in ANY partnership with it.

2. Funny that you commented on the Sweden point. I think the reason for their supposed high level of happiness is that there are so many people sitting around doing nothing (and getting paid for it) what's not to be happy about? Go ask a professional if they like their work environment there? I sat on a long flight next to a Swedish doctor. It was saddening for me to hear the story of a man who spent so much time working towards his career and hardly receives what would be considered a living wage for it. If that's your idea of a utopia, I don't know what to say?
Sweden is supposed to have very high productivity and standard of living despite high taxes,(I don't have time to get the stats ERD) I'm not going to accept the dissatisifaction of your seat mate (or was that your unhappiness) and extrapolate it for 9 million swedes - can you give me the facts that backup the 80% tax rate you mentioned?

Was it you or Robert that railed against "bleeding heart lefties" - well I'll just say thank god for them and for the one with JC for initials (Jimmy Carter!)
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Old 11-06-2007, 09:53 PM   #147
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OK. You call me a liar, then say doing that is not an ad hominum attack. As a retired CPA who used to get paid for giving my word, I resent that.
"
RetireeRobert,

I'm sorry if I offended you but I think that you are misinterpreting my post.

I accept the data that you provide as fact. How can I be calling you a liar if I accept your data?

Your data shows that the top 1% of earners pay a large portion of the taxes. I agree. That is indisputable.

I did not provide any new raw data so of course I did not provide a reference. All that I did was take your data and did the following simple calculations.

Based on your data, for the top 1% of earners: (0.21)(1-0.23)/(1) = 0.16. Which shows based on the raw data that you provided that the top 1% of earners still have 16% of the gross income after taxes, i.e. a lot of money.

For the bottom 50%: (.13)/50 = 0.0026. Which shows that the bottom 50% have only 0.26% of the gross income per percentile of population, i.e. much less money.

The ratio of these two values is 62.

So the emotional response to the fact that the top 1% pay 39% of the taxes is that it is really unfair and boy we are really soaking the rich.

The emotional response to the fact that the ratio of after tax income of the top 1% to the bottom 50% is 62 is that boy that is really unfair and how come the income distribution is so skewed.

You mentioned the fact that the top earners pay most of the taxes which I agree with but you failed to mention that they still retain a very large fraction of the income even after paying taxes. They are both facts derived from your data. That is what I meant when I said that you only presented the data that supported your opinion. I'm sorry if I said it in a way that offended but the later fact is equally as valid as the former.

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Old 11-06-2007, 11:51 PM   #148
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Who me?

I don't like to read blogs, magazines or papers from like minded people, it creates tunnel vision. Instead I like to beat my head against concrete round these parts... I honestly am a toss up too...i just want the end result to be more efficient and fair...
Yes you... ( really, I don't know what you were responding to... I just had to do it )

So some pounding of my own....

Bright eyed... the number of people with any kind of skill at the minimum wage (and guessing here) has to be very very small... most minimum wage is the teen food servers, the cleaning people, the unskilled laborers.. once you get a bit of skill and show some moxy, you get a raise..

Heck, my nephew got a raise just because he showed up for this job on time all the time... seems this is a new idea for some of the teens... they rewarded him for 'doing better' than the normal guy...

Now... let's say that the person has not skill or intelligence to do better.. I am pretty sure they are getting extra from the gvmt in some kind of wealth transfer..

I had said this on another thread.. and this was the couple of years I was in NY... they reported that the 'average' welfare person (and I am not talking minimum wage here but welfare)... had a cell phone, a microwave and cable TV.. so more than 50% had all three (there were more on the list, but I can not remember what they are)...

Now, anyone that is using my tax money to live should not be able to afford a cell phone... period... if you can waste money on cigs, drugs and cell phone you do not need assistance...

But I am really on the fence on the minimum wage... I agree with the recent law change as it was getting pretty low when compared to inflation...
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Old 11-06-2007, 11:52 PM   #149
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OK, I finally took a minute to think about this idea that increasing the min-wage would increase the cost of goods that poor people need to buy.

It would, but not to any great extent. A min-wage worker will spend all they make. Increase their wage by 20% and they will spend that additional 20% also. But the price of the 'stuff' they buy is not 100% labor content, so only the labor content portion of that will go up 20%. So, it depends on the labor content of their purchases, but will never be 100%.

Seems obvious, but I had to think it through.

So it is a mitigating factor, but probably not too big a deal.

How about something else we could agree on? IMO, if we ARE going to have a min-wage standard, they ought to automatically index it to inflation! It's crazy to say it is needed, but then not index it. I've heard that the politicians do this, so they can vote on it every few years. Gives them something to talk about w/o dealing with the important issues We are doomed!


-ERD50
sometimes things are quite effective at persuading a voter without reflecting the actual possible outcome...heck i guess that's 90% of politics!

I agree, there are soo many things that should include inflation-esque increases, yet they are very often not built in...set up to fail, or strain at the least. Then someone has to have the guts to say, fellas, it's time to raise some revenue, or cut something or both and the brew-ha-ha begins... even things that aren't that controvers'l like transpo maintenence get short-sighted funding. Sometimes its because they can only find the revenue to cover just so much each year, so it's not all gutlessness...

CA's governator came in with sweeping intentions to overall public services, but that stopped a few months in because nobody could find a program that should be cut. I think he was stunned.
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Old 11-07-2007, 08:36 AM   #150
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Here's a documentary about how the wealthy and corporations feel they are paying too much in taxes and how they go about shamefully avoiding the paying of their "fair share."

Tax Me If You Can

According to the documentary:
Corporations from 1950 - 2000 paid an average of 17% of the Fed taxes
Now they pay only 7%
In theory they pay 35% rate, but with loopholes they are paying 15-20%
The rest of us are picking up the slack.

How The Super Rich Avoid Paying Taxes
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Old 11-07-2007, 09:15 AM   #151
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Corporations ....

In theory they pay 35% rate, but with loopholes they are paying 15-20%
The rest of us are picking up the slack.
This is why I say ABOLISH corp taxes. We 'pick up the slack' either way!

If they don't pay the tax, then we 'pick up the slack'.

IF they DO pay the tax, we get hit with it in the price of goods.

PEOPLE pay corporate taxes, not corporations. It would be more efficient to abolish corp taxes, the corps hire people to comply and to find the loopholes. If it costs them $1 to avoid $2 in tax, it is a 'good deal' for the corp. But the citizens pay the $1 in the cost of the product, then they have to make up the $2 that the corp avoided. So, we end up paying $3, instead of just $2! And that corp staff could be put to work dong something productive, not figuring out how to move costs around. It is a lose-lose proposition! It exists because of this 'smoke-and-mirrors' idea that corporations pay taxes!

This seems to seldom come up, and it seems so obvious. Recently, the governor of IL tried to increase business taxes. I was amazed, yet pleased by the response - the press, everybody actually took him to task for the folly of this. They all said that it is the PEOPLE that will pay that tax in increased prices. And it will drive businesses across the border. The Gov dropped the idea.

Same thing applies in the global market.

-ERD50
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Old 11-07-2007, 09:24 AM   #152
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This is why I say ABOLISH corp taxes. We 'pick up the slack' either way!

If they don't pay the tax, then we 'pick up the slack'.

IF they DO pay the tax, we get hit with it in the price of goods.

PEOPLE pay corporate taxes, not corporations. It would be more efficient to abolish corp taxes, the corps hire people to comply and to find the loopholes. If it costs them $1 to avoid $2 in tax, it is a 'good deal' for the corp. But the citizens pay the $1 in the cost of the product, then they have to make up the $2 that the corp avoided. So, we end up paying $3, instead of just $2! And that corp staff could be put to work dong something productive, not figuring out how to move costs around. It is a lose-lose proposition! It exists because of this 'smoke-and-mirrors' idea that corporations pay taxes!

This seems to seldom come up, and it seems so obvious. Recently, the governor of IL tried to increase business taxes. I was amazed, yet pleased by the response - the press, everybody actually took him to task for the folly of this. They all said that it is the PEOPLE that will pay that tax in increased prices. And it will drive businesses across the border. The Gov dropped the idea.

Same thing applies in the global market.

-ERD50
That will cause massive unemployment in the Tax avoidance industry ERD - have you no heart - they have mouths to feed too (with silver spoons)? Oh, no!- they probably will move over to helping even more the wealthy concoct new schemes to avoid paying taxes.
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Old 11-07-2007, 10:09 AM   #153
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That will cause massive unemployment in the Tax avoidance industry ERD - have you no heart - they have mouths to feed too (with silver spoons)? Oh, no!- they probably will move over to helping even more the wealthy concoct new schemes to avoid paying taxes.
Does that mean you agree that we should abolish corp taxes? I couldn't tell by your answer.

And I have no problem with eliminating non-value added jobs. They are a drain on society. They are smart people, they will find a job in a value added area. They might even be motivated to start their own business, and create a bunch of low level jobs. That would be a good thing for the lower class. But that's just speculation, I'd rather deal with facts.


-ERD50
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Old 11-07-2007, 10:15 AM   #154
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Does that mean you agree that we should abolish corp taxes? I couldn't tell by your answer.

And I have no problem with eliminating non-value added jobs. They are a drain on society. They are smart people, they will find a job in a value added area. They might even be motivated to start their own business, and create a bunch of low level jobs. That would be a good thing for the lower class. But that's just speculation, I'd rather deal with facts.


-ERD50
No, trying to be funny actually, with all due respect we defer on this one, ERD. I'm not saying I can't be convinced, but you would have to show me a real life example of how this has worked out.
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Old 11-07-2007, 10:43 AM   #155
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This is why I say ABOLISH corp taxes. We 'pick up the slack' either way!

If they don't pay the tax, then we 'pick up the slack'.

IF they DO pay the tax, we get hit with it in the price of goods.

PEOPLE pay corporate taxes, not corporations. It would be more efficient to abolish corp taxes, the corps hire people to comply and to find the loopholes. If it costs them $1 to avoid $2 in tax, it is a 'good deal' for the corp. But the citizens pay the $1 in the cost of the product, then they have to make up the $2 that the corp avoided. So, we end up paying $3, instead of just $2! And that corp staff could be put to work dong something productive, not figuring out how to move costs around. It is a lose-lose proposition! It exists because of this 'smoke-and-mirrors' idea that corporations pay taxes!

This seems to seldom come up, and it seems so obvious. Recently, the governor of IL tried to increase business taxes. I was amazed, yet pleased by the response - the press, everybody actually took him to task for the folly of this. They all said that it is the PEOPLE that will pay that tax in increased prices. And it will drive businesses across the border. The Gov dropped the idea.

Same thing applies in the global market.

-ERD50
What about all the millions in subsidies they happily take, paid for by taxes? Or the roads, services and other things they often need built, paid for by the public? Just the cost of doing business - bringing jobs to a particular community?

i'm not opposed to the millions the casino's are now delivering to CA's pot... or gamblers paying more...
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Old 11-07-2007, 10:47 AM   #156
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Sweden is supposed to have very high productivity and standard of living despite high taxes,(I don't have time to get the stats ERD) I'm not going to accept the dissatisifaction of your seat mate (or was that your unhappiness) and extrapolate it for 9 million swedes - can you give me the facts that backup the 80% tax rate you mentioned?

Was it you or Robert that railed against "bleeding heart lefties" - well I'll just say thank god for them and for the one with JC for initials (Jimmy Carter!)
Sorry, I was wrong, their highest tax rate was 87% now it's down to an oh so reasonable 65%. I don't think that includes their confiscatory payroll taxes.

Marginal Tax Rates, by Alan Reynolds: The Concise Encyclopedia of Economics: Library of Economics and Liberty
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Old 11-07-2007, 10:52 AM   #157
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Thats 1979 (87) 1990 (65) - I have a stat that says the top rate for individuals in 2007 is 60% and Corporations 28%

I prefer dealing with current stats if possible it makes the discussion more accurate and useful for everyone.
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Old 11-07-2007, 11:42 AM   #158
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What about all the millions in subsidies they happily take, paid for by taxes? Or the roads, services and other things they often need built, paid for by the public? Just the cost of doing business - bringing jobs to a particular community?

i'm not opposed to the millions the casino's are now delivering to CA's pot... or gamblers paying more...
I'm opposed to govt subsidies to business. The exception, and Robert Reich agrees, is where there is a benefit to society, but not a sufficient profit motive for a business. In those cases, it may make sense for govt to provide a head-start.

We all use roads, etc. Doesn't it make more sense to just pay the tax, than to have a company pay (and pay to void) the tax, and then we just pay for it in the price of the goods? Simple is better, I think, and no corp tax is simple. It also makes our products more competitive in the world market, creating more local jobs. Isn't that a good thing?

I can't see ANY negative to eliminating corp taxes. DT points out that the accountants may be laid off, but I really do not see the reduction of non-value added jobs as a bad thing. Maybe painful for some in the short run, but the alternative is worse, IMO.

I am opposed to casinos, ethically. Don't they collect too much from the poor? Yes, it's voluntary, but I still think it is a stupid thing for our govt to condone. JMO.

-ERD50
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Old 11-07-2007, 11:54 AM   #159
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ERD, if you let corporations get out from under their tax obligations, wouldn't that lift the individuals tax burden and would that increased burden fall fairly?
Would the theoretically lower cost of goods and services benefit everyone fairly?
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Old 11-07-2007, 12:47 PM   #160
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ERD, if you let corporations get out from under their tax obligations, wouldn't that lift the individuals tax burden and would that increased burden fall fairly?
Would the theoretically lower cost of goods and services benefit everyone fairly?
Since the poor spend all of their money to get by, the reduced cost of goods would benefit the poor the most.

You are correct that taxes collected from individuals would need to increase to replace what was previously collected from businesses (unless we are dreaming about a smaller govt). Two things to remember though:

1) - the cost of goods should be reduced by even more than just the tax burden, they will be reduced by the cost of compliance and avoidance (as I simplistically showed before).

2) Since our tax system is currently 'progressive' (maybe not as progressive as you would like, but still 'progressive'), I think it's safe to assume that any increases in the individual tax rates would remain progressive. So, not only would the lower cost of goods assist the poor the most, but also the income tax 'burden' would fall progressively on those with higher income.

So it still seems to me, that liberals/progressives should be calling for reduced taxes on business if they want to help the poor, not increased taxes on businesses.

Of course, any real tax reform seems to be a dream anyhow, but I fail to see any negatives to this. If it were to be done, I think it would need to be staged in, so that prices and taxes would adjust gradually over time.

If you want, I can get into the 'non-value' job issue in a bit more detail, but later.

-ERD50
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