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  1. #21
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    Re: Getting rid of income taxes

    Quote Originally Posted by David12
    I should mention though I am not actually against income taxes as such.
    hi david, good topic. after reading down the thread, it occurs to me that i will most likely be inclined to argue a not taxes whatsoever positition, and to make a case as to why you should be against income taxes and such.

    this is kind of a hot button to me, so, i will try to remain composed

    I would argue income taxes have done some good, it put Al Capone behind bars for example.
    wow! talk about your small victories. if all it cost to get al capone behind bars was our liberty....well then woo hoo!!

    As for a debate, I would debate that it is not in the best interest of the economy and especially low and middle-income earners to have excessive wealth being retained by a relatively small number of people, as it depresses demand. I would also debate that it is not in high income earner's best interest either, as the economy as a whole and the business sector would do better if more of that money was freed up and spent by low and midde-income earners or spent by high income earners on projects to help people {and thus themselves and businesses in the process, like on education projects for example, benefiting everyone} and so higher taxes or another approach to having some of that wealth redistributed is the way to go, maybe.
    you seem to have a bit firmer grasp on the workings of economic cause and effect than most. i liked your first two points and how you meshed them so well. while i did stumble a bit on the "educations projects" phrase, i got by it and stayed right with you until you mentioned higher taxes as one possible approach to you more balanced economy theory.

    my contention is that, contrary to popular belief, the united states federal government does not run on the income tax. in fact, other than a short pass through treasury computers for time stamping and book entry (and fast exit), income tax money goes directly from the irs into the coffers of the federal reserve to service the interest on the debt that our esteeemed gov. has accrued by borrowing from the fed to run the country.

    same would apply to any other type of tax you may want to come up with.

    what is needed is a return to the original constitutional model of economics. the government coins or prints the money and spends it (not borrows it or lends it) into the fiducial flow based on projected need of agriculture, business, education, etc, etc., for the coming fiscal cycle. this was based on how the roman's did this very successfully until julius inroduced a "gold standard" which, naturally, resulted in a select few ending up with all the gold in very short order.
    i will get into this more later in the thread, but for those of you who value self edification, there is an excellenf film available on the net that explains this in detail along with a very nice compilation on the history of money.
    sorry i can't go get the link without probably losing what i am typing, but i think it is called "the secret of oz" just enter: bill still oz into your search engine and it should take you right to it.

    so, that's where i'm at. now i gotta get over to ebay and buy myself a new tinfoil beret.

    wait! wait! what is this?
    Quote Originally Posted by HCabret
    Taxes=tyranny, TRUE tyranny.
    i am pretty sure that this is the first time i have heartily agreed with anything that h has posted other than one of his occasional self deprications. feels sorta funny.
    i fear the fate of all mankind is in the hands of fools.....
    -king crimson-

  2. #22
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    Re: Getting rid of income taxes

    Hello Puma237,

    Al Capone is not the only benefit to income taxes of course. Quite a lot of medical research is funded by the government, law enforcement agencies, child care rebates to encourage more women into the workforce, war on poverty programs that have helped keep some people out of poverty {although as a whole not the most successful program} infrastructure programs that have helped business, welfare programs in Nordic countries have been credited as the many reason they have some of the lowest child poverty rates in the world. These are just some of the things that governments have done with revenue, derived from government income, including {though I am no expert} income taxes.

    The education projects that you said you stumbled on. Sorry about the confusion. What I was referring to was a comment from Bill Gates about how it is projected that there is not going to be enough qualified people to fill qualified positions down the track and thus it would be presumably in the best interest of say a software company to do more to fix the education system.

    I do believe that income taxes are not as bad as people seem to think they are. They represent a relatively small portion of one’s income. My issue with it is more about how governments choose to spend it, not collecting it in the first place. It can help end tyranny not create it. Tax funded programs that help people gain freedom from want, tax payer funded law enforcement programs that rescue people from oppressive criminals, economic polices {and the taxes that may pay for some of those polices} that can help stop the oppressive crime of human trafficking. Tax payer funded defense forces that topple dictatorships for example.

    Although as my first post pointed out, I am not opposed to the idea of scrapping income taxes for middle income and low income earners for a consumption based tax.

  3. #23
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    Re: Getting rid of income taxes

    Al Capone is not the only benefit to income taxes of course. Quite a lot of medical research is funded by the government, law enforcement agencies, child care rebates to encourage more women into the workforce, war on poverty programs that have helped keep some people out of poverty {although as a whole not the most successful program} infrastructure programs that have helped business, welfare programs in Nordic countries have been credited as the many reason they have some of the lowest child poverty rates in the world. These are just some of the things that governments have done with revenue, derived from government income, including {though I am no expert} income taxes.

    i have no problem with the government funding such things, generally speaking. some of the items you listed i have keen aversion to. some that may surprise you and some for reasons that may surprise you. my argument is that the gov can do all these things better, more efficiently and without going into debt to a mutlinational crime..sorry banking cartel by simply taking up the constitutional mandate to be the sole printer and distributor of the national wealth. if the government prints and distributes, what would be the need for tax? the only value that tax has is to bring a society to fealty via endenturement. the founding fathers had it all worked out, somehow we botched it when we forgot to pay attention.


    The education projects that you said you stumbled on. Sorry about the confusion. What I was referring to was a comment from Bill Gates about how it is projected that there is not going to be enough qualified people to fill qualified positions down the track and thus it would be presumably in the best interest of say a software company to do more to fix the education system.
    actually not a bad idea at all, but can we leave gates out of it? i used to be one of bill's biggest fans, but since his new found love for gmo's, not so much.
    and it would require oversight, lots of oversight. in other words we the people gotta start paying attention.


    I do believe that income taxes are not as bad as people seem to think they are. They represent a relatively small portion of one’s income. My issue with it is more about how governments choose to spend it, not collecting it in the first place. It can help end tyranny not create it. Tax funded programs that help people gain freedom from want, tax payer funded law enforcement programs that rescue people from oppressive criminals, economic polices {and the taxes that may pay for some of those polices} that can help stop the oppressive crime of human trafficking. Tax payer funded defense forces that topple dictatorships for example.
    and i maintain that taxes are among the most foul things on earth. what does "relatively small portion of one's income" mean? is it realitvely small to the person who is going to go another 50 dollars into debt this month because his income just won't stretch? or is it the difference between foundering and staying afloat to many? (feel free to consider that rhetorical) taxees cannot help end tyanny and cannot help but create it. you can have all of these programs without the "tax funded" in front of them. although some of these ideas of yours may require discussion in separate threads.

    Although as my first post pointed out, I am not opposed to the idea of scrapping income taxes for middle income and low income earners for a consumption based tax.
    so you want to move the shrubbery around but not address the root rot? god, for how many years has the fedgov been trying to make that work?
    look, no matter what you call a tax or how you structure it, it always boils down to an individual forced to take earned money out of his pocket and hand it over to the government. another word for this is extortion.
    i fear the fate of all mankind is in the hands of fools.....
    -king crimson-

  4. #24
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    Re: Getting rid of income taxes

    Hello Puma237,

    We are both on the same page in wanting individuals to do better financially, but taxation presumably is not the biggest issue when it comes to cost of living pressures {although that is a bit of generalization}. Boosting income via say scrapping income taxes would not help as much until prices for say, rents, food, transportation and the like were driven down or more people were helped to save more. Not to mention that the flipside is of course taxes help top up low income earner's wages via the Earned Income tax credit and drive down cost of living pressures via things like say subsidized housing. So, I would disagree that taxes are one of the foulest things on the earth as you put it. Countries that have scrapped income taxes for example are far from utopias and pre 1913 America when there was no income-taxes was not a paradise. {Not that I am claiming you are suggesting that}.

    As for how to fund socially beneficial projects of course there are non-taxation methods, like the one you propose and there is the private sector for example, like income protection insurance instead of unemployment benefits and the government being in such heavy debt is like you said not a good idea. In fact, as you may know, it has been listed as the biggest threat facing the USA by the head of the Joint Chiefs of Staff and by at least one historian, who looked at why empires collapsed. So, they need to get out of debt, they need to better spend the money they do have and given all of the issues facing America, presumably income taxes is not the biggest problem facing the average citizen.

    I should put out the shift from income taxes to say consumption tax was from the point of view of wanting to boost consumer spending to help create more jobs. Not to neglect say root causes of things. From a practical standpoint, how likely is it that they are going to do away with income taxes, so perhaps from a pragmatic approach, it might be a better option to focus instead on making sure it is spent better. Even with the existance of taxation there are ways to end government debt and spend the money wisely and achieve low poverty and a high standard of living. Take Australia or Nordic countries for example.

  5. #25
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    Re: Getting rid of income taxes

    Quote Originally Posted by David12 View Post
    I have no issue with business making a profit, I just think it would improve the bottom line of business by benefiting mankind and I am not saying they should just donate profits to charity. I mean the business itself providing goods and services for a fee to help end poverty. Lobbying for policies that benefit the community and treating their workers better and good benefits can be a good thing for everyone.
    Ok, how are businesses not doing this now? They pay their labor wages, an amount both agree are beneficial to them, they sell goods at rates both parties receive benefit from. What exactly should they do differently?
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


  6. #26
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    Re: Getting rid of income taxes

    Hello Squatch347,

    I know that some businesses do these things and some of what I say below is of course dependent on the businesse's specific situation and I don’t want to generalize.

    A} As for services to help the poor, arguably more businesses can get involved with providing goods and services to the poor. Take mobile phone coverage in Africa, some more than others have seen the benefit of doing this. Take in the US, the Brookings Institute points out that poor communities can be undeserved by certain businesses {that could in some cases be successful if they invested, I think}

    Also consider banks, {although not a banking expert, it is estimated at least some years ago now, that almost 30 million people don’t have access to bank accounts in the USA which hurts them financially or many people do not save as much as they could or migrants sending remittance would be better off sending them through banks. I think it would be better for banks and customers if they did more to address these issues {again some are doing more than others of course}, but given the stats of those without accounts, low saving rates by many {at least at times} and the high fees still charged by some banks in relation to remittance, more could be done.

    B} With wages and benefits, I believe some could afford to be and should be more generous to employees. To see wage rises as an investment or child care {if they can afford it} rather than as a burden. {Some of course are doing this}

    C} In terms of lobbying for policies, some businesses are not always {in my view}on the right side of the debate. Like the issue with say resisting minimum wage increases. Pushing for protectionist polices, subsidizes that can hurt the poor and the economy both here and abroad.

    David

  7. #27
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    Re: Getting rid of income taxes

    Quote Originally Posted by David12 View Post
    A} As for services to help the poor, arguably more businesses can get involved with providing goods and services to the poor. Take mobile phone coverage in Africa, some more than others have seen the benefit of doing this. Take in the US, the Brookings Institute points out that poor communities can be undeserved by certain businesses {that could in some cases be successful if they invested, I think}
    The question I would have is, if this is profitable, why aren't they doing it now? If it isn't which party are we expecting to shoulder that cost (the customer, the owner or the laborer)? The same question applies to banks.

    Quote Originally Posted by David12
    B} With wages and benefits, I believe some could afford to be and should be more generous to employees. To see wage rises as an investment or child care {if they can afford it} rather than as a burden. {Some of course are doing this}
    Again, who bears this cost? The owner or the customer?

    Quote Originally Posted by David12
    C} In terms of lobbying for policies, some businesses are not always {in my view}on the right side of the debate. Like the issue with say resisting minimum wage increases. Pushing for protectionist polices, subsidizes that can hurt the poor and the economy both here and abroad.
    I would definitely agree with this point in general (I would disagree with the minimum wage part though, that is a terrible law that hurts the poor and was created to repress Blacks). You are correct that many of these companies are acting selfishly to use government to protect them, it is extremely common. Take the USDA beef grading system. It was created by Chicago meat packers as an additional cost that they could afford, but smaller competitors could not, pushing them out of business.

    The question is, what do we do about it? Lobbying will exist as long as we look to Government to be a powerful entity that controls business and picks winners and losers. Every time we use the government to regulate something we give the wealthy amongst us the opportunity to use that new tool to get more wealthy in a way much, much different than they would via the market. If I use regulation to get wealthy, you don't have a choice but to pay me. If I use the market, I only get wealthy if I serve you well.

    The answer to this question is smaller government, not more, only then can you keep companies from extracting wealth outside of voluntary exchange.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


  8. #28
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    Re: Getting rid of income taxes

    Quote Originally Posted by David12
    We are both on the same page in wanting individuals to do better financially, but taxation presumably is not the biggest issue when it comes to cost of living pressures {although that is a bit of generalization}. Boosting income via say scrapping income taxes would not help as much until prices for say, rents, food, transportation and the like were driven down or more people were helped to save more. Not to mention that the flipside is of course taxes help top up low income earner's wages via the Earned Income tax credit and drive down cost of living pressures via things like say subsidized housing. So, I would disagree that taxes are one of the foulest things on the earth as you put it. Countries that have scrapped income taxes for example are far from utopias and pre 1913 America when there was no income-taxes was not a paradise. {Not that I am claiming you are suggesting that}.
    when you consider that inflation itself is a tax under the fed reserve system, then taxation does become a major issue when it comes to cost of living pressures. other major issues are offshore manufacturing and importation of cheap labor via illegal immigration. "if you do not want to work for an unlivable wage, we got someone who will, so get back in that harness or eat bugs."

    the housing market bubble has burst as all things will when inflation and specualation drives prices up to a point where affordability leaves the eqation. while you may have hear on the news lately that the housing market is on its way back, it is not. currently, in the good ol' usa, for every vacant home that is on the market there are 2.5 homes being held off the market. this is being done for two basic reasons:

    1. to keep available homes from being so plentiful that a price war will commence that actually will drive down prices significantly. (real estate investors do not want that)
    2. the off market properties are being enterred as assets on to the books of the holding banks in order to make it appear as though they are more healthy than they actually are. (they are pretty much all beyond broke)

    if the word "scam" comes to mind, you are on the right track. the whole fed system is the biggest con job ever devised by the criminal mind. the intent being to extract every possible asset from the great unwashed, excuse me, middle class. the tools are, of course, taxes and inflation.

    earned income tax credit? really? for most americans this equates to basically a night on the town or half a new set of tires.
    as for housing subsidies and such, these things only appear necessary because everything costs too much. so, taking a hundred bucks out of my pociket and applying it to someone elses rent does nothing to curb inflation or as you call it, cost of living pressures, but only serves to distract from solviing the core problem. and does not make me real happy about that hundred bucks either.

    david, i am not burdened with any kind of delusional utopian vision. i am just getting tired of trying to keep my balance on a tilted playing field.

    As for how to fund socially beneficial projects of course there are non-taxation methods, like the one you propose and there is the private sector for example, like income protection insurance instead of unemployment benefits and the government being in such heavy debt is like you said not a good idea. In fact, as you may know, it has been listed as the biggest threat facing the USA by the head of the Joint Chiefs of Staff and by at least one historian, who looked at why empires collapsed. So, they need to get out of debt, they need to better spend the money they do have and given all of the issues facing America, presumably income taxes is not the biggest problem facing the average citizen.
    i would argue with the joint chiefs that it is the source of the debt that is, far and away, the biggest threat to the USA. there is no way that the debt can be reduced, let alone gotten out of, as long as the fed system remains in place.
    so i guess i have placed upon myself the burden of explaining how the fed works.

    when you to the bank to secure a loan for say a hundred dollars, and you have been cleared for the loan., the next step is to fill out a loan contract with your bank. (small digression ensues) when you walked into the bank you may have noticed a sign stating the assets of the bank at say a million bucks. ok, you have signed the contract and the moment you signed the contract you have created out of nothing but a piece of paper and your signature, two things, a debt burden to yourself in the amount of a hundred bucks plus what ever interest was agreed upon, and new assets to the bank in the identical amount. here's the rub. they will give you a check for the hundred that you borrow, which you may immediately cash at one of their teller windows, but they will not just give you the cash because the check is you debt instrument. you can then elect to give the hundred back to the bank leaving you with a balance owing in the amount of the interest. problem. you and the bank just worked together to create a hundred dollars, but at no time was the money to cover the interest created. this will come out of your personal earnings (asssets) at an agreed upon later date. and (my favorite part) the sign you saw when you came into the bank will only change to list the interest that you now owe as a new asset. the hundred that they gave you does not get deducted from their asset sheet because your debt to them covers it in their credit column. this is the fed, only the fed creates all the money that the government spends but does not create any money whatsoever to cover the interest that the government owes in interest. so, the interest has to come from outiside the money creation process. can ya guess where? can you guess what the u.s. fed gov uses for colateral on these huge loands? so, if the money the gov borrows is created as a loan, and the interest the gov owes is not created at all, how can the debt ever be repaid in united states (fed reserve) currency? it can't. it has to be paid with some other currency. aka, the collateral. your assets and mine. so, ross perot was wrong about that giant sucking sound. it is the sound of your virtual worth being transferred away from your virtual control into the hands of someone who, well, ddin't exactly earn it. and at this point, they basically have it all.

    I should put out the shift from income taxes to say consumption tax was from the point of view of wanting to boost consumer spending to help create more jobs. Not to neglect say root causes of things. From a practical standpoint, how likely is it that they are going to do away with income taxes, so perhaps from a pragmatic approach, it might be a better option to focus instead on making sure it is spent better. Even with the existance of taxation there are ways to end government debt and spend the money wisely and achieve low poverty and a high standard of living. Take Australia or Nordic countries for example
    you cannot boost consumer spending when jobs are leaving and costs are rising faster than incomes. judging by the way ron paul was marginalized so crafitilly, it is not likely that "they" are going to do away with the income tax. it is our chain, our lock and key. we have been conquered by scammers and at this point, we are left with.. find a way to take america back or, as you are suggesting, try to negotiate our surrender.
    i fear the fate of all mankind is in the hands of fools.....
    -king crimson-

  9. #29
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    Re: Getting rid of income taxes

    Hello Squatch347,

    Why don’t businesses take more advantage of such opportunities? Maybe can answer that with a question, why did the people running Apple pre 1997 almost bring it into bankruptcy, but Steve Jobs turned it around. I suppose some business people are better at what they do than others. Is there a way to get more to see the profitable opportunities for helping the poor? I hope so, maybe access to better information on where to invest is needed. Given that many small businesses fail, clearly the support being offered from business support groups is not good enough.

    Who should bear the cost of say a wage rise, productivity has gone up over the years {and presumably profits} but wages have not always followed at anywhere near the same rate {or at least so I have heard} So I would assume business could spare more for wages.

    Should customers bear the cost? Take Fair trade, the argument put forward by some that you if you want poor people in Africa say to be paid more, are you willing to pay more for your coffee? Well, it does not have to mean that, I am pretty sure there is a difference between what fair trade companies pay say a co-operative and what they charge at the counter {yes, they have their own costs of course} but presumably it does not have to mean we are all going to be paying a lot more at the counter. Although, for those that can, I am not against us bearing some of the cost, a modest increase in prices, so someone else does not starve seems reasonable or someone in a sweatshop gets paid a decent salary seems fair.

    I support the minimum wage being increased {I hear what you are saying though}, but look at Australia. Australia has one of the highest minimum wages in the world, set at $16.10 per hour. It has gone up multiple times over the last ten years, unlike say in the USA. Every single time {that I can remember} the business groups come out predicting this is going to hurt businesses, hurt employment and so on. Yet, Australia has one of the lowest unemployment rates in the world, over 16 years without a recession, even during the GFC, Australia was one of the only countries NOT to go into recession. Given the high wages, one would assume Australia would have been the first to be toppled at even the slightest economic issue.

    For the poor person, a job is the best thing you can do for them but a job alone is not enough to help you if you can’t pay the bills and yes, the wage might go up later on, or you can use the low paying job to jump to another job, that is not going to keep the landlord at bay now though. Plus, it can take a long time to move up and I think it is about fairness, if you are working say at food joint for example, helping in a large part to generate the money being made by the company {making the food, selling the food, etc}, you should be paid a decent amount. I would also argue there are better ways to help unskilled people find work other than poverty wages and that would be through things like, job training programs {the programs that actually work that is}. I would assume even in countries with very low wages, like developing countries or western countries with low minimum wages there is still unemployed people. So, I think low wages does not mean people are going to all get work. Plus, a western company is not going to be able to compete with a Chinese company on a race to the bottom with wages anyway. so they would need a new plan. I do support a full employment policy, but think that there are other ways to achieve that.

    David

    ---------- Post added at 12:30 PM ---------- Previous post was at 11:31 AM ----------

    Hello Puma237,

    In terms of driving down cost of living pressures/inflation, the “Ghetto Tax” for example, according to the Brookings Institute drives up prices for low-income earners and a 1% reduction would save poor people 6 billion dollars. This is not due to income taxes or the fed or inflation {according to the report}, it is that businesses underserve poor communities and try to insure themselves against perceived {rightly or wrongly} risks for providing services to the poor by increasing prices. The solutions are not related to storming the Fed so to speak.

    Wage rises as you know contribute to inflation as well, although I support wage increases so I would not support capping them and just for the record, you cited foreign manufacturing and illegal immigrants low wages in relation to cost of living pressures Can you explain that because imported cheap goods drive down the cost and if you {and I am not saying you are} is suggesting the reason that say wages are low, say when it comes to the minimum wages is because of illegal immigrants, that is not correct. In fact both legal and illegal immigrants can and do on balance benefit the USA, like helping to increase jobs, due to increased consumer spending. The supply of goods and services they bring and create.

    I disagree that you can’t get rid of debt without getting rid of the Fed. In Australia for example, in 2007, Australia had zero government debt that was paid off by the Howard government. No debt, but we still have the fed.

    I agree that it is hard to boost consumer spending when jobs are leaving and things cost more than people can afford. Yet getting rid of the reserve is not going to address that. Demand is not going to be increased {in fact, if you took away stimulus spending of the Fed, there would be even less demand} or getting rid of the Fed is not going to automatically mean more supply of goods and services say by General Electric. So, I would question the benefit of going after income taxes and the fed. I am not proposing surrender like you “jokingly” said. If your aim is to achieve real freedom {not thinking you are in chains because you have to pay some taxes}, but real freedom, then tackling things like freedom from want is going to do more good for your fellow citizen then pushing for something that is not going to happen nor needs to happen, like getting rid of income taxes.

    David

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    Re: Getting rid of income taxes

    Quote Originally Posted by David12 View Post
    Why don’t businesses take more advantage of such opportunities?
    Because they aren't economically profitable. Either the cost/investment criteria is too high, legal aspects of local governments increase the risk, the suspected return is too low (because people there don't value it enough) or they have more economically profitable projects for investment.

    Quote Originally Posted by David12
    Maybe can answer that with a question, why did the people running Apple pre 1997 almost bring it into bankruptcy, but Steve Jobs turned it around.
    Have you ever read Barbarians at the Gates? The answer is perks. Executives of companies act in their own interest, not necessarily the company's. They will act in the latter if their personal interests are aligned with the company's. For example, if stock holders are so diversified that they cannot change the composition of the Board you find a situation like that in the book where the VP of Marketing and the Finance VP call each other on their respective corporate jets going from the same place to the same place.

    The answer to this is the market. What happened was that a group of investors (corporate raiders) got together, realized that there was waste in this company, took over, fired the execs and hired people who would return that profit to the shareholders.

    Quote Originally Posted by David12
    I suppose some business people are better at what they do than others.
    This is an important point. I don't want to imply that all business decision are perfect. Many businesses fail, but unlike with government programs you find that businesses have a better incentive to ensure they succeed. If they don't they get fired, they lose their wages or savings.

    Quote Originally Posted by David12
    Is there a way to get more to see the profitable opportunities for helping the poor?
    I think there are. It involves competition. By decreasing regulation and allowing competition to rise you will find that companies, in order to stay profitable will do a couple of things. They will compete, lowering prices and they will segment the market. Some will serve upper class purchasers, some will cater to poorer members.

    Take retail. We have Nordstroms, who serve high income people. It offers better service than competitors to make up for that price increase. But then we also have Kohls, which are mid-range retailers that offer similar products with less service. And we have Walmart which offers no frills, absolutely bare bones prices (their margins are razor thin).

    Walmart materially helped the poor. Can anyone really say that the low income in America don't have a higher standard of living as the result of these less expensive goods?

    Quote Originally Posted by David12
    Who should bear the cost of say a wage rise, productivity has gone up over the years {and presumably profits} but wages have not always followed at anywhere near the same rate {or at least so I have heard} So I would assume business could spare more for wages.
    You are correct, however remember that wages are only part of your compensation. Benefits have increased dramatically over the years, not only in quality and amount, but unfortunately in cost. The government's interference in the health care market has caused a good deal of the dramatic inflation there. This results in employees getting a higher costing benefit without receiving necessarily an increase in the quality of the benefit.

    Quote Originally Posted by David12
    Should customers bear the cost? Take Fair trade, the argument put forward by some that you if you want poor people in Africa say to be paid more, are you willing to pay more for your coffee? Well, it does not have to mean that, I am pretty sure there is a difference between what fair trade companies pay say a co-operative and what they charge at the counter {yes, they have their own costs of course} but presumably it does not have to mean we are all going to be paying a lot more at the counter. Although, for those that can, I am not against us bearing some of the cost, a modest increase in prices, so someone else does not starve seems reasonable or someone in a sweatshop gets paid a decent salary seems fair.
    And that is a mutually beneficial, voluntary exchange. The farmer gets more money, the company gets a better reputation and the customer gets a good feeling about purchasing a product that helps some farmer in Africa.

    However, that has to be voluntary. I don't want to pay $8 for a cup of coffee, I want to pay the market price, because I don't get a lot of good feelings out of buying fair trade coffee.

    On a side note, that is because I have worked with several fair trade groups and with infrastructure development in Iraq. I found that when you start to pay well above the market rate for things in a poor country that social problems develop. You cause greater jealousies, higher theft, and in some cases, murder, to get the good paying jobs. Imagine a room full of starving people and you come in and give one of them a slice of bread.

    Quote Originally Posted by David12
    I support the minimum wage being increased {I hear what you are saying though}, but look at Australia. Australia has one of the highest minimum wages in the world, set at $16.10 per hour.
    Actually Australia has a phenomenally high unemployment rate, especially amongst those most hurt by minimum wage, new entrants (the young). About 20% of all people under the age of 25 are unemployed (comparable to US, though we have had a larger recession, historically the AU rate is far higher than the US).

    http://www.abs.gov.au/ausstats/abs@....%20labour~1130

    If you go back to 2002, we were at 5ish percent and AU was as 17 percent.

    Minimum wage laws take the lowest rungs off of the economic ladder. Like it or not, they cause unemployment and reduce opportunities for development and experience gaining amongst the poorest in our society.

    Feel free to not watch this, but I love this video:

    http://www.youtube.com/watch?v=IFbYM2EDz40


    Quote Originally Posted by David12
    Plus, it can take a long time to move up and I think it is about fairness, if you are working say at food joint for example, helping in a large part to generate the money being made by the company {making the food, selling the food, etc}, you should be paid a decent amount.
    To be accurate, you would like or want to be paid a decent amount. There is no real morality claim here. You clearly think the amount of pay you are getting is worth the time you spend doing it and the effort you put into it right? Otherwise you wouldn't have taken the job. Be careful in confusing wanting more with deserving more.

    Quote Originally Posted by David12
    I would assume even in countries with very low wages, like developing countries or western countries with low minimum wages there is still unemployed people.
    You would be right, but more relevantly, in the US, a state's unemployment rate is directly relational to its minimum wage rate. The higher the latter the higher the former. This relationship becomes even closer as you average the unemployment rate out over time.

    Quote Originally Posted by David12
    So, I think low wages does not mean people are going to all get work. Plus, a western company is not going to be able to compete with a Chinese company on a race to the bottom with wages anyway.
    Of course they won't, but they don't have too. You higher Chinese labor for low return, cheap goods. You don't hire them (especially not at a cheap rate) for complicated assembly with a high quality level. That is the reason that there are still manufacturing jobs here. And why the average manufacturing pay has rising dramatically. While the total work force has shrank, the type of job has shifted towards highly skilled labor you can't find easily in China.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


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    Re: Getting rid of income taxes

    Hello Squatch347,

    The general unemployment rate in 2002 was less than 7 percent in Australia. In fact, between 1999 -2013, the general unemployment rate in Australia has never gone above 8%. In 2005 for example, it was at a 28 year low at 5.1% and in 2007, after several minimum wage rises, it was 4.3% and during the GFC never went above 6% and now in 2013, sits on around 5.4%. So, I would argue that minimum wages rises are not hurtful as is claimed by some businesses. Plus, the economy despite high wages is doing alright for itself, 16 years without a recession {and counting} and high economic growth at times during the last 10 years or so.

    Yes, youth unemployment tends to be higher but that can’t be blamed on the minimum wage. For one, a lower demand is one of things being blamed in Australia for the youth rate, businesses for example that traditionally hire young people, like retail have been some of the hardest hit areas. Some youth are lacking skills, the number of young people choosing not to take up trade related apprenticeships for example, where the jobs are, are also cited as another reason for the present and possible future high rate. Plus the youth of say 2002 {that you referenced}, are now adults and inheriting a good economy and low adult unemployment…and high wages and so not a bad deal.

    I would argue the same applies in the USA, when it comes to general unemployment, that high wages do not play a significant role.

    Alabama has no minimum wage according to the Labor Department but an unemployment rate of 7.1% compared to say Texas with a minimum wage and unemployment rate at 6.1% or take Vermont with quite a high minimum wage and it has an unemployment rate of 5.1%. So, I would disagree that there is a link between high unemployment states and high minimum wages, I think it would have more to do with other issues which the stats would seem to back up.

    I do think there is a moral argument to be made for paying people a livable wage, so they can afford the cost of living. Of course, deciding how much that is can be complex. I did watch the video you sent, but I have yet to find well run businesses that have such a small difference between what they pay in wages and what remains for them. If the business is really doing that bad, I don't think wage changes are going to help over the long-term, they need to better run the business. I would also say that the employer can do more than either get machines to do all the work or move off-shore, there are presumably a range of other things that can be done.

    David

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    Re: Getting rid of income taxes

    Quote Originally Posted by David12 View Post
    Hello Squatch347,

    So, I would argue that minimum wages rises are not hurtful as is claimed by some businesses.
    Economist would disagree with you whole-heatedly on this point. Anytime that you have a binding Price floor, such as minimum wage, the gap between the supply (labor force) and the demand (jobs available) grows (unemployment). The degree of growth in unemployment depends part on the level of elasticity that exists within the economy. If the demand is very inelastic (in this case the particular job market), then the minimum wage increases would have less of an obvious impact on the degree of unemployment that resulted from an increase in the price floor. The distinction here is figuring out whether the Price Floor increase has a binding effect on the market or not.

    I suspect that your stats do not tell the whole story and where cherry picked. Its simply a fact of the Law of Supply and Demand that as price increases (minimum wage laws) demand decreases (jobs offered at the minimum wage level) I would wage that government subsidizations could be found in those numbers you offered.

    Quote Originally Posted by David12 View Post
    Yes, youth unemployment tends to be higher but that can’t be blamed on the minimum wage.
    It is the primary cause of youth unemployment. Most youth have no skills or experience to offer to justify a position that would offer anything above minimum wage....hell, most dont have enough skill, ability, or experience to justify minimum wage at all. Why would you hire someone at 8 dollars an hour if they were only worth 6? Getting rid of the minimum wage would have a near immediate impact of dropping the unemployment rate by several points.

    Quote Originally Posted by David12 View Post
    Alabama has no minimum wage according to the Labor Department but an unemployment rate of 7.1% compared to say Texas with a minimum wage and unemployment rate at 6.1% or take Vermont with quite a high minimum wage and it has an unemployment rate of 5.1%. So, I would disagree that there is a link between high unemployment states and high minimum wages, I think it would have more to do with other issues which the stats would seem to back up.
    The Federal minimum wage is still a binding price floor in those, and every, state.

    Quote Originally Posted by David12 View Post
    I do think there is a moral argument to be made for paying people a livable wage, so they can afford the cost of living.
    Forcing people into unemployment due to minimum wage laws that make them without value to the workplace does not help them. Having a ton of people sitting at home collecting tax payer funded checks does more harm to the overall cost of living (inflation, not collecting tax revenue, etc) than the elimination of the MW law ever would.
    -=[Someguy]=-
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    Re: Getting rid of income taxes

    Quote Originally Posted by David12
    In terms of driving down cost of living pressures/inflation, the “Ghetto Tax” for example, according to the Brookings Institute drives up prices for low-income earners and a 1% reduction would save poor people 6 billion dollars. This is not due to income taxes or the fed or inflation {according to the report}, it is that businesses underserve poor communities and try to insure themselves against perceived {rightly or wrongly} risks for providing services to the poor by increasing prices. The solutions are not related to storming the Fed so to speak.
    could you do me a favor and explain "ghetto tax" please? as for the math; who are the poor you are speaking of? apparently they are worth 600 billion dollars, whoever they may be, so, lets try not to use numbers to obfuscate that we are still talking 1%.
    as for storming the fed to solve this problem, i am not sure i understand the problem to which you are referring, so i have no frame of reference within which to bring the machinations of the fed.

    the "perceived risks" of serving poor communities are less a matter of perception than of experience. businesses go broke setting up in communities that cannot afford to support them. simple matter of cause and effect.

    Wage rises as you know contribute to inflation as well, although I support wage increases so I would not support capping them and just for the record, you cited foreign manufacturing and illegal immigrants low wages in relation to cost of living pressures Can you explain that because imported cheap goods drive down the cost and if you {and I am not saying you are} is suggesting the reason that say wages are low, say when it comes to the minimum wages is because of illegal immigrants, that is not correct. In fact both legal and illegal immigrants can and do on balance benefit the USA, like helping to increase jobs, due to increased consumer spending. The supply of goods and services they bring and create.
    i am sorry, but i don't know that wage raises contribute to inflation. i would argue, that cost of living raises and negotiated labor contract raises are necessitated by inflation, not the cause of it.

    i would be happy to explain that the idea that imported "cheap" goods drive down the cost of living is a fallacy. a pair of danner boots that cost 200 bucks a few years ago, when made in the usa, now cost 200 bucks coming from china. the cost of offshore manufactured goods has not gone down significantly, if at all. what has changed is the profit margin for the 200 dollar boots that use to cost, say. 90 bucks to produce and distribute and now cost about 25 bucks to manufacture offshore, ship to the usa and distribute. the manufacturer has dramatically increased profits by contracting with offshore slavers to produce his goods. and his former usa work force is now out bleeding the streets to find sustainable employment. inflation is not only still alive and well, but far worse due to fewer people in the work force to take up the slack.

    immigrant workers, and i am talking of the illegal kind do not increase jobs, they lower the quality of jobs by agreeing to work for less than a sustainable wage. they send billions of usa dollars home each month reducing the supply of available fed reserve notes in u.s. circulation. their impact on the economy as consumers is minimalized by the necessity for them to live communal lifestyes with multiple residents in a single dwelling sharing rent, utilities and essential goods costs. individually, they are relatively poor consumers.

    as for the supply of goods and services they bring and create, i will need to have that explained please, because i am just not seeing it.


    I disagree that you can’t get rid of debt without getting rid of the Fed. In Australia for example, in 2007, Australia had zero government debt that was paid off by the Howard government. No debt, but we still have the fed.
    david, would it be acurate to assume that you are an aussie? if so, you should be aware that the labor debt that you are referring to was 96 billion after inflation from its real dollar figure of apprx. 52 billion.(an interesting aside heres is that apprx. half that debt was accrued by the frazer government in the late 70's and early 80's while howard was the treasurer.) it was paid off for the most part by selling austrailian government assets to the private sector. now, recall that the fed system (scam) is all about asset accumulation using fiat currency. whom do you supppose was the main customer for all these fire sale assets?

    here in the usa, the core debt is somewhere between 17-19 trillion bucks with banks holding toxic assets to the tune of right around a quadrillion bucks. the fed is propping up the stock market, insolvent corporations and failed banks to the tune of 450 billion fiat bucks a month and billing this "stimulation" to the taxpayers. the us government has no asset portfolio that would even touch the interest, let alone the authority to sell the property of we the people. as far as the u.s. economy goes, stick a fork in it, it's done. or do you actually think that this can be solved by raising taxes?

    I agree that it is hard to boost consumer spending when jobs are leaving and things cost more than people can afford. Yet getting rid of the reserve is not going to address that. Demand is not going to be increased {in fact, if you took away stimulus spending of the Fed, there would be even less demand} or getting rid of the Fed is not going to automatically mean more supply of goods and services say by General Electric. So, I would question the benefit of going after income taxes and the fed. I am not proposing surrender like you “jokingly” said. If your aim is to achieve real freedom {not thinking you are in chains because you have to pay some taxes}, but real freedom, then tackling things like freedom from want is going to do more good for your fellow citizen then pushing for something that is not going to happen nor needs to happen, like getting rid of income taxes.
    getting rid of the fed is the only thing that will save the u.s. economy along with its sovereignty. other measures would most likely have to coincide with this, such as some significant degree of isolationism (temporary measure) and perhaps even a well thought out war (against a real enemy for a change) or two along with an agressive program of wholesale justice. things are very bleak, but thanks to the crafty misdirections of the mainstream media, shoddy education and a disgrace of a government that is far too occupied in covering its own ass to take on any endeavors that may actually be in the national interest, the american body politic is barely aware that there is anything wrong at all.
    i fear the fate of all mankind is in the hands of fools.....
    -king crimson-

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  15. #34
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    Re: Getting rid of income taxes

    Quote Originally Posted by David12 View Post
    The general unemployment rate in 2002 was less than 7 percent in Australia.
    The general unemployment rate isn't really the relevant figure though, the youth and unskilled unemployment levels are since those are affected by the minimum wage.


    Quote Originally Posted by David12
    I would argue that minimum wages rises are not hurtful as is claimed by some businesses.
    Let me ask you a question. Lets say you had a clean up job in your factory. It provides about $5 an hour of benefit to the company. Would you hire someone at a cost of $16/hour?

    Also, this isn't a company issue, its one of the very, very few almost universally held economic relationships.

    Here is an economic paper linking the two from the National Bureau of Economic Research: http://www.nber.org/papers/w846

    A much easier read can be found on Mises if you would like: http://mises.org/daily/6097/

    Quote Originally Posted by David
    Plus, the economy despite high wages is doing alright for itself, 16 years without a recession {and counting} and high economic growth at times during the last 10 years or so.
    Sure, but that isn't the question. Opportunity cost is the question. What would the growth been without those factors? Given both the theoretical and econometric data that answer is almost certainly, even better.

    Quote Originally Posted by David
    Some youth are lacking skills, the number of young people choosing not to take up trade related apprenticeships for example, where the jobs are, are also cited as another reason for the present and possible future high rate.
    YES, Exactly! Apprenticeships are generally low paying jobs because part of your "wage" is the experience you get. It is economically unproductive to supply that job if you also have to provide a wage above what that unskilled laborer gives you. That is why you have youth unemployment, but not low skilled, unfilled jobs.

    Quote Originally Posted by David
    Alabama has no minimum wage according to the Labor Department but an unemployment rate of 7.1% compared to say Texas with a minimum wage and unemployment rate at 6.1% or take Vermont with quite a high minimum wage and it has an unemployment rate of 5.1%.
    Actually, the US minimum wage applies to all those states. Alabama does not raise it from there, Vermont does. And, as I said, average unemployment is irrelevant here, it is unskilled labor that is affected. Which is why the NBER in the paper I linked above found that states with higher minimum wages have lower youth employment. Likewise, when states raised their minimum wage they had a drop in their youth employment.

    Quote Originally Posted by David
    I did watch the video you sent, but I have yet to find well run businesses that have such a small difference between what they pay in wages and what remains for them.
    Hmm, I think you aren't really looking that hard.

    Here is a quick list. It has Industry/amount of profit for every 1 dollar of revenue.

    Grocery Stores/7 tenths of a cent
    Wholesale computers/7tenths of a cent
    Electronics stores/8 tenths of a cent
    Drug stores/2.6 cents
    Heavy construction/2.7 cents
    Auto parts stores/4.5 cents

    These are pretty low figures and most industries make only about 10 cents per dollar in profit.

    And that doesn't even deal with the issue which the movie didn't bring up. Lets say they lower that profit margin. Who are they hurting?

    They are either hurting potential future employees because they no longer have the capital to invest to create a new job and so that person doesn't get that job

    or

    Stock holders, which are generally peoples' (including those employees) pension and retirement funds.


    Quote Originally Posted by David
    I would also say that the employer can do more than either get machines to do all the work or move off-shore, there are presumably a range of other things that can be done.
    Such as?
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


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    Re: Getting rid of income taxes

    Hello Someguy,

    In terms of the stats {like any stat, one of course needs to be weary} but I would disagree that they were cherry picked. My mandate so to speak was to look at general unemployment which was done, in fact I looked at every one from 1999-2012 and looked at the youth unemployment rate. I think the issue with stats is that if you don't agree with the basic premise one may just dismiss them no matter how many stats are put forward. {I am sure I am guilty of this too} For the record, not all economists are against increasing the wage. {As for youth unemployed, as already posted, lack of skills and fall in demand in retail sectors is playing a bigger role in why companies are not hiring the youth not the wage level. So, I believe paying people a livable wage would do more good than paying them next to nothing, which may mean, even with a job, they still need to get government benefits. So, they government is still out of pocket, say with the Earned Income Tax credit.

    David

    ---------- Post added at 01:06 PM ---------- Previous post was at 01:01 PM ----------

    Hello Puma237,

    The Ghetto Tax refers to the fact that people in poorer communities tend to pay for the same goods and services as higher income earners. For example, car insurance-higher premiums, personal loans-higher interest, higher cost for bread even, as some poor communities are underserved by supermarkets, higher power bills because poorer homes don’t tend to be as insulated and so on. Take the math, if there are over 40 million people living below the poverty line for example, even if each of those people only had 1,000 dollars to their name that alone would amount to over 40 billion and of course many {thankfully have more than that}

    No doubt there are risks with investment into poorer communities, but they are often perceived risks, for example, the success of companies in Africa, in relation to mobile phones shows that while otherwise would have thought it to risky. In the Ghetto tax report, they show how the rates on mortgages were made higher because of the “risk” when it fact, some of the people actually would have qualified for a lower rate as they were not as risky as assumed, bias can play a big role.

    I am no expert when it comes to inflation,, but wage rises are one of the pressures on inflation because businesses may seek to pass on the costs to consumers and it also means more money in the system which can lead to higher costs being charged by businesses.

    The cost of imported goods from say China should by default be significantly cheaper and if it were not for the abuse of anti-dumping laws and import tariffs, they would be even cheaper. Wal-mart has driven down the cost for poor people by selling cheap goods which they can do when they pay staff or suppliers from overseas, next to nothing.
    {For the record, I am not actually saying the above is the right way of going about it, just that imported goods by default are usually cheaper, say from China and can mean savings locally}

    In relation to the Fed, I mean getting rid of income taxes and the Fed is not going to really change these like the Ghetto tax and the like.


    Illegal immigrants do contribute to jobs, through increase demand for goods {and pay sales tax as result} 10 million illegal immigrants for example, spending say $2,000 a year {which is a conservative estimate} have just kicked in 2 billion dollars into the economy. So, I think it is a bit unfair to say the reason that a factory is paying John a low wage is because an illegal immigrant at another factory is illegally working for less that is too much of a scapegoat for John’s employer.

    I never said raising taxes was the answer and one can argue over the type of policies of the fed, but I would say {at least in some cases} the fed does a good thing, in relation to buying junk bonds or pumping more money into areas, this has helped in some cases.

    P.S Yes, I am an Aussie
    David

    ---------- Post added at 01:11 PM ---------- Previous post was at 01:06 PM ----------

    Hello Squatch347,

    I understand that the margins for some business can be tight {when I worked in stock take, I was surprised the cost to the company and what they were selling it out was not as wide as I though, in some cases}. That said, I do think companies {for the most part, can afford to pay more}.

    Take the US, the federal minimum wage did not go for about 10 years. So, you can’t tell me that during that ten years, companies, with increased productivity and/or profit, etc could not afford to pay for an increase in wages and yes I know there are other costs too besides wages, but still I think they can.

    In Australia, business groups complain even when the increases are in the zone of 40 cents plus, yes that adds up, spread over hours and number of staff and there are other costs.

    My argument is they can afford to do it. Yes, I know those US states without a minimum wage are still governed by fed wage, but the huge difference in wages amongst the states still shows {to me at least} that there are many other factors that come into play when it comes to the unemployment rate {Youth or otherwise}

    I would stress as others have, the fall in demand and lack of skills play the bigger role in youth unemployment and it is not just that people don’t want to take them on because of the wage. Many youths are just not choosing to purse trade related apprenticeships where the money is. Take Tafe {I don’t know if you use the same term in the US} but the uptake in courses increased when the fees were waived by the government. So, the point, I am getting out is that in order to increase skill sets and the like to get youth more work, there are plenty of other steps that can be taken to help the youth.

    To what else can say an employer do, better allocation of labor for one, {I say that because I have seen in my workplace, they waste of getting an employee to do x thing, when they would be better off helping in the other and thus more getting down or saving on wages because things would finish sooner. Morale boosting can also increase productivity and that does not always have to cost money, it can be just dealing with people fairly, etc.

    P.S I disagree with the article that states, why then do supporters not increase wages by much higher amounts, would that not be logical? No, for one, estimates have already been done, to see how much a person needs in order to be able to afford the cost of living. So, you don't have to seek a 1 billion an hour wage.

    David

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    Re: Getting rid of income taxes

    Quote Originally Posted by David12
    That said, I do think companies {for the most part, can afford to pay more}.
    And from whom are they going to take this money to pay more? Specifically. The money doesn't appear out of thin air, where is it going to come from?

    Quote Originally Posted by David12
    Take the US, the federal minimum wage did not go for about 10 years. So, you can’t tell me that during that ten years, companies, with increased productivity and/or profit, etc could not afford to pay for an increase in wages and yes I know there are other costs too besides wages, but still I think they can.
    And they did. Non-minmum skilled workers (who really aren't contributing more to the economy now than they were in 1940 in real terms, so having a higher, real, wage would be odd) received far, far more income than they did in 1980 or 1970 or 1960. US workers decided (through accepting job offers) that they preferred that income in the form of steady wages (and this in only true in lower skilled laborers, highly skilled laborers saw their wages increase) and increasing benefits in the form of Health Insurance, PTO, Paternity or maternity leave, disability or life insurance, etc.

    Quote Originally Posted by David12
    My argument is they can afford to do it. Yes, I know those US states without a minimum wage are still governed by fed wage, but the huge difference in wages amongst the states still shows {to me at least} that there are many other factors that come into play when it comes to the unemployment rate {Youth or otherwise}
    Agreed, there are numerous factors that affect employment, but that does not mean that minimum wage isn't one of them. You'll notice that the NBER study I linked above holds many of those factors constant and still finds a direct relationship between unskilled unemployment and minimum wage.

    Quote Originally Posted by David12
    Many youths are just not choosing to purse trade related apprenticeships where the money is.
    This is a personal opinion, not an economically demonstrable fact. Where are these apprenticeship openings? Where are they offered, but not accepted?

    Quote Originally Posted by David12
    To what else can say an employer do, better allocation of labor for one, {I say that because I have seen in my workplace, they waste of getting an employee to do x thing, when they would be better off helping in the other and thus more getting down or saving on wages because things would finish sooner. Morale boosting can also increase productivity and that does not always have to cost money, it can be just dealing with people fairly, etc.
    So why aren't they doing this now in your opinion?

    It would seem reasonable that if I could make my company more efficient and thereby either take more money home myself, lower my prices to get more customers or higher the better workers by offering a better wage I would certainly do it. Clearly there has to be some impediment to this action.

    Quote Originally Posted by David
    P.S I disagree with the article that states, why then do supporters not increase wages by much higher amounts, would that not be logical? No, for one, estimates have already been done, to see how much a person needs in order to be able to afford the cost of living. So, you don't have to seek a 1 billion an hour wage.
    That doesn't clear the objection though. If $7/hour is better for an employee and $12/hour is even better, why not $100/hour? If we can simply increase the wage rate and improve the economy, why are we limiting ourselves to $7 or $14? What is the upper limit? The point of the objection is that it is highlighting the implicit assumption in minimum wage (that the money is free, it just appears). We know we can't raise it to $1B an hour because there would be 0 jobs left right? Why is that? Because no job contributes a billion dollars in value an hour and because the capital isn't there. The capital to pay for these workers isn't free, it has to come from either customers or owners.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


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    Re: Getting rid of income taxes

    Hello Squatch347,

    The traineeship issue, the estimate was that trade apprenticeships went down, by about 2.5%, but non- trade apprenticeships {predicted to be lower paid jobs in the long-run} went up by 5% in 2012. So, it is not so much because of the minimum wage {which presumably would affect both types}, but it had more to do with things more specific to the trade sector itself, lower demand and the like.

    Yes, paying every working 1 million dollars an hour would hurt, but no one is proposing that. Scrapping the minimum wage to create jobs also seems to overlook the fact; the businesses may not want to or need to hire someone extra. It is not related to the wage.

    In real terms, I would assume that even unskilled people over the last 60 years have produced more {with technology advancement and the like}. Plus low wages, factoring in inflation, buy less now than they did decades ago. So, that does not seem justified economically or from a fairness point of view.

    The stats on margins would vary amongst businesses, labor costs say in the auto sector is arguably charged at an inflated rate. So, they could share more of that with say the employee.

    I would argue that the reason businesses are not paying more in wages is not because they can’t, it is because they choose not do believing that one must slash costs as much as possible, when as noted previously, that approach does not work against low paying jobs in China and is not going to save the business against competition that makes better products, have more customers, better serivce, have better technology or actually use it {many businesses here complain that online shopping is hurting them, but many of them still refuse to go down that path, innovate or die} and the impediment to good decisions, at least in the case of allocation of labor, may be something as bland as they just don’t always make the right decisions because they are not good at their job. So, I think business are being hurt by the fixation and this almost religious focus on wages and regulations, {here some are pushing to scrap penalty rates for example. That's not going to help say the retail sector, if they just don't have enough customers coming through the door}

    David

  19. #38
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    Re: Getting rid of income taxes

    Quote Originally Posted by David12 View Post
    Hello Someguy,
    For the record, not all economists are against increasing the wage. {As for youth unemployed, as already posted, lack of skills and fall in demand in retail sectors is playing a bigger role in why companies are not hiring the youth not the wage level.
    Of course, you are entitled to whatever opinion you want, even if it is dead wrong. There are 10 issues that an overwhelming majority of PhD level economist agree on. Notice number 9.

    If you are going to argue with 79% of PhD level Economist on this issue, you have a significant hill to climb

    Quote Originally Posted by David12 View Post
    So, I believe paying people a livable wage would do more good than paying them next to nothing, which may mean, even with a job, they still need to get government benefits. So, they government is still out of pocket, say with the Earned Income Tax credit.
    I dont like the word "Government Benefits" I prefer the more accurate term "Tax Payer Provided Benefits". Anywho, Im not sure the argument you are trying to make here. Looks like you are saying that people should be paid a "livable wage" yet, admit even with a "livable wage" (which isnt defined) those people would still need Tax Payer Provided Benefits. If that is the case, doesn't that defeat the purpose of the whole livable wage idea?
    -=[Someguy]=-
    Super Moderator


  20. #39
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    Re: Getting rid of income taxes

    Quote Originally Posted by David12 View Post
    The traineeship issue, the estimate was that trade apprenticeships went down, by about 2.5%, but non- trade apprenticeships {predicted to be lower paid jobs in the long-run} went up by 5% in 2012.
    Source?

    Quote Originally Posted by David12
    Yes, paying every working 1 million dollars an hour would hurt, but no one is proposing that. Scrapping the minimum wage to create jobs also seems to overlook the fact; the businesses may not want to or need to hire someone extra. It is not related to the wage.
    Recognizing that it would hurt proves the point that the argument for minimum wage is lacking. Clearly there is more going on if that high of a wage would hurt significantly. If that high of a wage would hurt a lot, why wouldn't we believe that a lower (but above market wage) would hurt as well?

    The second sentence is untrue by definition. A minimum wage is set at a rate above the market rate (IE to increase the wages people would agree to on their own). Since, by definition, that new wage rate is not at the market clearance rate, there is unused supply and unfulfilled demand. Therefore removing the minimum wage will, by definition, result in more jobs.

    Quote Originally Posted by David
    In real terms, I would assume that even unskilled people over the last 60 years have produced more {with technology advancement and the like}.
    Oh? So the fry cook at McDonalds in 2012 is producing more for the economy than the fry cook at McDonalds in 1970?

    Quote Originally Posted by David
    Plus low wages, factoring in inflation, buy less now than they did decades ago. So, that does not seem justified economically or from a fairness point of view.
    Actually, their wages buy exactly what they did decades ago, that is the point of saying that they haven't risen in real terms. Unskilled labor receives higher pay today than it did in 1970 in absolute terms, but it receives roughly similar pay (small increase) when you factor in inflation.

    But that is only half the story. Inflation is a poor measurement. Really what we should be focused on (from a fairness standpoint) is standard of living. The things a laborer was buying in 1970 are lower, standard of living wise, than the things we are buying now. A 800 a month paycheck buys better things than the 300 a month paycheck in the 70s even though they are equivalent in real terms.

    Why? Because economic development reduces prices. If you held the money supply constant you would find a slight deflation over time for goods because we can produce them more cheaply as we develop new technologies and processes.

    Quote Originally Posted by David
    The stats on margins would vary amongst businesses, labor costs say in the auto sector is arguably charged at an inflated rate. So, they could share more of that with say the employee.
    I'm not sure what you mean here.

    Quote Originally Posted by David
    I would argue that the reason businesses are not paying more in wages is not because they can’t, it is because they choose not do
    Define choose here. You have studiously ignored my questions earler. Where are they going to get the money to pay these workers? There are exactly three options.

    1) Increase prices

    2) Decrease profit

    3) Cut another category of costs

    Which is it? 1,2 or 3?


    Quote Originally Posted by David
    That's not going to help say the retail sector, if they just don't have enough customers coming through the door}
    I would agree, forcing customers to come in isn't a successful option, morally or economically. I can tell you what would help, let the companies that refuse to innovate die. That will open up options for other, more innovative companies to take their place. Capitalism is about profit and loss.
    "Suffering lies not with inequality, but with dependence." -Voltaire
    "Fallacies do not cease to be fallacies because they become fashions.” -G.K. Chesterton
    Also, if you think I've overlooked your post please shoot me a PM, I'm not intentionally ignoring you.


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    Re: Getting rid of income taxes

    Hello Someguy,

    The reference to a fall in demand in sectors that tend to hire a large number of youths is not an opinion that’s an economic reality {at least in Australia}. So, of course that is going to affect the youth rate. Also, at least in some parts of Australia, some apprenticeship openings are going unfilled by youths, not because they are not offered because of the existence of a high wage, they are just not being taken up by the youth. The tax regime is also being cited as a reason for businesses being hesitant to provide them because there are taxes on it. This has nothing to do with the minimum wage. In fact, one reason cited for why the youth don’t take up more apprenticeships is because the wages are not high enough.

    The survey does not prove that the minimum wage is bad. For one, not all economists agreed anyway, so are you saying the 21% that disagree are fools? For the record, if I had sent you one survey, where a small number of economists were asked and most, but not all said they think it would NOT hurt. It is doubtful you would be convinced by such an argument.

    What I said about taxpayer funded benefits is the complete opposite. If you paid them a livable wage {economists have actually tried to define what a livable wage would be, depending on where you live} then the government would not have to pay them things like the Earned Income Tax credit. If the government has to because of low wages, the government is not saving as much taxpayer money as they could. You also talked about the overall affect on the economy for having people unemployed {and I of course agree with you that unemployment is bad}, but you should also consider the benefits to having people paid a higher wage, the increase in spending, etc that can help business through more sales. {Even an increase in food stamps for example means of course more being spent in the economy which can help business}. That said, I like you, want people to work and the food stamps program does not seem to be the most effective program ever created.

    David

 

 
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