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Post 19 Oct 2017, 7:19 am

geojanes wrote:
Doctor Fate wrote:Let's try it another way. Are you paying the "true cost" of your property (presuming you own a home)?

The answer is "no" if you deduct interest, right?

Are you paying the "true cost" of raising a child?

The answer is "no" if you deduct him/her as a dependent, right?

That the government has fixed a certain level of income as eligible for benefits is no different. And, by forcing businesses to pay a "living" (nee "true") wage, you will simply change the market. Oh yes, the employer will bear the burden. Sure. Until he/she jacks their prices to make up the difference.


We've decided (and I think rightly) that there is a public interest in people having children, so they are subsidized by the state.

We've decided (I think wrongly) that there is a public interest in people taking out mortgages to buy their homes, so they are subsidized by the state.

We've decided (I think rightly) that if people work they should earn a minimum wage.

We've decided (I think rightly) that citizens should not go hungry, that many get housing subsidies, and if you don't make much, you get a credit on your taxes instead of having to pay.

All I'm saying is that some employers have figured out that if they pay very low wages, their workers can subsidize their low wages by getting public benefits so the true cost of that person is not being borne by the employer. Does anyone think that's not true?

Does anyone think that employers (for profit and not for profit) are not profiting from the fact that they don't have to pay a living wage and their employees still live and come to work?

I think those things are undeniable facts. The issue of opinion is that what, if anything, should be done about that, and if this even a bad thing or not. We can't really argue those latter points if we can't agree about the facts though.


Now we are getting somewhere:

1. (Children) Agree
2. (interest) Agree
3. (minimum wage) Agree
4. (hunger and housing) Agree
5. Agree if by "true cost" you mean "true societal cost" but not if you mean "true employee cost".
6. "Benefiting" but not necessarily "profiting" The profit, if any, comes from the ingenuity of the employer. (We really don't know what the employer has figured out.)
7. Ahh, now I see your point.
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Post 19 Oct 2017, 7:48 am

rayjay
5. Agree if by "true cost" you mean "true societal cost" but not if you mean "true employee cost".

The employee cost to a company is whatever the company finds they have to pay to secure labor.
If the societal cost is higher, because employees need government assistance to get by, than the true cost of the labor has been subsidized by taxpayers...
Agreed?

rayjay
6. "Benefiting" but not necessarily "profiting" The profit, if any, comes from the ingenuity of the employer. (We really don't know what the employer has figured out.)

They've figured out that they don't have to pay a living wage because the employees basic needs will be paid for by government assistance programs.
If they can't make a profit without a subsidy on their labor costs ... why are they around?
WalMart is among the major beneficiaries of subsidized labor. So is the fast food sector. WalMart is profitable. So are most fast food operators.
Since both industry sectors continue to operate in high wage jurisdictions profitably, its already proven that they don't require subsidized labor ...
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Post 19 Oct 2017, 8:04 am

We were making progress, then Ricky entered the room.

Ricky:
If they can't make a profit without a subsidy on their labor costs ... why are they around?


Perhaps you are advocating that the employer interview his/her employees, ensure that they are not on the dole (say because their spouse's or parent's income puts them over the top) and then hire them.

They are in business to help their investors and customers.
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Post 19 Oct 2017, 8:29 am

This study says raising corporate rates is harmful but cutting rates has little effect on economic activity unless done during a recession.

https://www.federalreserve.gov/econresd ... 006pap.pdf

Here is a history illustrated in a graph of the effect of tax cuts on deficits.

http://rricketts.ba.ttu.edu/Tax%20Rates ... venues.htm

This study says that cutting top tax rates at the top has little effect in economic growth...but does concentrate wealth.

http://graphics8.nytimes.com/news/busin ... conomy.pdf

This article notes the only major growth after changes in taxes ...came after the Clinton tax increase!

https://www.politico.com/interactives/2 ... t-wealthy/

This article notes US corporations note that US corporations pay an effective rate of much lower than 35% and corporate tax cuts would have little effect on economic growth.

http://www.epi.org/publication/competit ... -families/
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Post 19 Oct 2017, 8:37 am

geojanes wrote:Does anyone think that employers (for profit and not for profit) are not profiting from the fact that they don't have to pay a living wage and their employees still live and come to work?


/snarkon It would be really rough on the employers if their employees died, I suppose. /snarkoff

Every company exists to make a profit. That is undeniable.

I don't know how much management you've done. If you've done much, as I have, you will find the single most important resource is excellent employees. They are a rare and precious commodity. In the public sector, for the most part, all I could do was encourage the bad ones to work somewhere else. In the private sector, one pays and otherwise incentivizes good employees to stay.

So, why do companies pay below "living wages?" Not simply because "they can," but because those employees are not valuable enough to warrant those wages. If they were, they would be snapped up by the competition.

But, guess what? There is no competition for marginally-skilled employees. They're a dime a dozen. How much skill does it take to stock the shelves at Walmart? To flip burgers at McDonald's? To sweep floors in a warehouse? To take tickets at a movie theater?

If you want to make more money, become more valuable. That's capitalism.

I think those things are undeniable facts. The issue of opinion is that what, if anything, should be done about that, and if this even a bad thing or not. We can't really argue those latter points if we can't agree about the facts though.


No one is "entitled" to a living wage. That's not our system.
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Post 19 Oct 2017, 8:44 am

freeman3 wrote:This study says raising corporate rates is harmful but cutting rates has little effect on economic activity unless done during a recession.

https://www.federalreserve.gov/econresd ... 006pap.pdf

Here is a history illustrated in a graph of the effect of tax cuts on deficits.

http://rricketts.ba.ttu.edu/Tax%20Rates ... venues.htm

This study says that cutting top tax rates at the top has little effect in economic growth...but does concentrate wealth.

http://graphics8.nytimes.com/news/busin ... conomy.pdf

This article notes the only major growth after changes in taxes ...came after the Clinton tax increase!

https://www.politico.com/interactives/2 ... t-wealthy/

This article notes US corporations note that US corporations pay an effective rate of much lower than 35% and corporate tax cuts would have little effect on economic growth.

http://www.epi.org/publication/competit ... -families/


Sorry, I'm suspicious of links with little else. So, I randomly chose the last one. I then went to the "about" page of EPI, a group I'm not familiar with. Here's what I found:

The Economic Policy Institute’s mission is to inform and empower individuals to seek solutions that ensure broadly shared prosperity and opportunity.


So, they have a bias. Why is that?

EPI Values

Helping Working People Economic policy should focus on improving conditions for working people.
Truth and Accuracy Matter EPI research should be honest and rigorous.
Dignified, Remunerative Work People must be provided with the capacity and opportunity for dignified, remunerative work for personal as well as societal benefit.
Strong, Effective Labor Movement A strong, effective labor movement is essential for democracy and to ensure an equitable sharing of income and wealth.
Government for the People Government should set standards and rules for markets, and should ensure the efficient provision of public goods and investments (emphasis mine).


What does that sound like? An arm of Labor? Bernie Sanders' think tank?
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Post 20 Oct 2017, 6:47 am

rayjay
Perhaps you are advocating that the employer interview his/her employees, ensure that they are not on the dole (say because their spouse's or parent's income puts them over the top) and then hire them.

I'm advocating that governments set a minimum wage that ensures that they will not have to use tax revenues to support people who are working full time.
Because tax payers should not be subsidizing employers or industries on a permanent basis.

You've already agreed on this ...
We've decided (I think rightly) that citizens should not go hungry, that many get housing subsidies, and if you don't make much, you get a credit on your taxes instead of having to pay.

There are many people who currently are fully employed who find themselves unable to afford their housing and food costs....Mostly because they work in low skill service jobs that pay less than a living wage.
Are you saying that the government shouldn't just use tax money for unemployed people or disabled people who are hungry but also people who are fully employed?
Why?
The easiest solution is to ensure that employment income is sufficient to meet these basics. (A living minimum wage)
As it is, for many hard working people, low wage jobs also come with the indignities of receiving a handout.
And all so that certain industries or business types have a subsidy that is most likely applied straight to the bottom line.
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Post 20 Oct 2017, 7:20 am

rickyp wrote:rayjay
Perhaps you are advocating that the employer interview his/her employees, ensure that they are not on the dole (say because their spouse's or parent's income puts them over the top) and then hire them.

I'm advocating that governments set a minimum wage that ensures that they will not have to use tax revenues to support people who are working full time.
Because tax payers should not be subsidizing employers or industries on a permanent basis.

You've already agreed on this ...
We've decided (I think rightly) that citizens should not go hungry, that many get housing subsidies, and if you don't make much, you get a credit on your taxes instead of having to pay.

There are many people who currently are fully employed who find themselves unable to afford their housing and food costs....Mostly because they work in low skill service jobs that pay less than a living wage.
Are you saying that the government shouldn't just use tax money for unemployed people or disabled people who are hungry but also people who are fully employed?
Why?.


Ricky on what date did you stop beating your wife?

BTW, this entire conversation is about Trump's tax plan. The irony is that Canada taxes small businesses at 10.5% while the US taxes them at 34%.
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Post 20 Oct 2017, 12:55 pm

Ricky:
Are you saying that the government shouldn't just use tax money for unemployed people or disabled people who are hungry but also people who are fully employed?


Can you not read what I've already written without stating something silly about "disabled people who are hungry".

Ricky:
The easiest solution is to ensure that employment income is sufficient to meet these basics. (A living minimum wage)


To do this you have to figure out where they live, how many children they have and how old they are, whether they are married or single, and whether their spouse works. It's amazing how you haven't thought any of this through. Perhaps the solution isn't as easy as your attempts at social engineering suggest.

Under your proposal my wife and kids would all have their jobs disappear; but we aren't receiving food stamps or housing allowances. Another unintended consequence ...
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Post 21 Oct 2017, 8:54 am

rayjay
BTW, this entire conversation is about Trump's tax plan. The irony is that Canada taxes small businesses at 10.5% while the US taxes them at 34%

Trumps tax plan involves more than just corporate taxes.
The Canadian tax system is much simpler than the US. Period.
And for corporations The federal rate is only 10.5% for small businesses...
After the general tax reduction, the net tax rate for most corporations is 15%.You also need to understand that there are no where near the complex deductions available to Canadian corporations that there are in the US.
Plus, small point, the minimum wage that must be paid in Canada is higher .(By the way minimum wage workers in canada have the same basic health insurance as everyone else in their province. So businesses don't have to provide those benefits)
Then there's the HST.(Value Added Tax) All businesses pay that. (My HST rate is 13%)

rayjay

To do this you have to figure out where they live, how many children they have and how old they are, whether they are married or single, and whether their spouse works. It's amazing how you haven't thought any of this through. Perhaps the solution isn't as easy as your attempts at social engineering suggest.

yes, complexity... Everything Americans do is so complex and no one else anywhere has figured out a simpler more effective system...
It is actually easier...
One: set a minimum wage by state that recognizes varying cost of living. Automatically adjust the minimum wage every year for state inflation..
Two: Provide universal health care for all so that workers can move jobs without fear of losing coverage. And so that, no matter one's income, there's security.. And so that businesses are saddled with providing this as a benefit. And so that the work force is healthier and more productive.
After you've done those two simple things, you let markets work. You don't need to micromanage benefits. I know its something the US tends to do, to ensure someone isn't getting more than their fair share.. But really all that happens is inefficiency in the system and complex rules that powerful companies can game.

The value of labor only increases for three reasons:(historical fact)
1) scarcity of available labor and ability of labor to move jobs.
2) organized labor bargaining collectively (the major reason for wage increases in the US historically)
3) minimum wage law.
The value of labor decreases when
1) businesses operate in conditions where these three conditions do not exist.
In the US your health insurance system has deflated mobility of the labor force. Your minimum wage laws are very low in some states, and really poor people can't move jobs, because they simply don't have resources to do so. Finally, laws have been passed making organized labor weaker and diminishing the numbers who collectively bargain greatly strengthening corporations and devaluing labor.

rayjay
Under your proposal my wife and kids would all have their jobs disappear; but we aren't receiving food stamps or housing allowances. Another unintended consequence

Businesses always threaten to eliminate jobs when faced with paying higher wages. Its a tactic.
Its one that is often effective. Buts its almost always bluff.
If the jobs they say they are going to eliminate are contributing to a successful business there's no way they are eliminated. If they can eliminate them then they've been carrying excess labor. Usually well run businesses are staffed to meet the demands of their company and the jobs being filled are required. By instituting a minimum wage, the local market for labor does not change....
What does happen, to a local economy, is that low wage earners who increase their income spend their money locally. Increasing economic activity and improving the local economy.
What happens to the local economy if corporations continue to pay less than living wages is that tax money is required to support their employees basic needs, decreasing tax revenues that could be used to develop local infrastructure or other services.
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Post 21 Oct 2017, 10:12 am

rickyp wrote:yes, complexity... Everything Americans do is so complex and no one else anywhere has figured out a simpler more effective system...
It is actually easier...
One: set a minimum wage by state that recognizes varying cost of living. Automatically adjust the minimum wage every year for state inflation..
Two: Provide universal health care for all so that workers can move jobs without fear of losing coverage. And so that, no matter one's income, there's security.. And so that businesses are saddled with providing this as a benefit. And so that the work force is healthier and more productive.
After you've done those two simple things, you let markets work. You don't need to micromanage benefits. I know its something the US tends to do, to ensure someone isn't getting more than their fair share.. But really all that happens is inefficiency in the system and complex rules that powerful companies can game.


So, in order to fix our system, we just need to:

1. Become socialist.
2. Stay socialist.

The best part is when you say "I know its something the US tends to do, to ensure someone isn't getting more than their fair share."

You spend so much time trying to convince us our system is rigged, then you say that.

You are funny!
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Post 21 Oct 2017, 3:32 pm

fate
You spend so much time trying to convince us our system is rigged, then you say that.


your right when I say this...
"I know its something the US tends to do, to ensure someone isn't getting more than their fair share."

I'm only referring to the working poor and beneficiaries of the social welfare system. I should have said so more clearly.
There's an incredible amount of scrutiny over the benefits that these people receive. Including, in some cases, constant drug testing.
Meanwhile tax rules exist like "carried interest" that see millionaires running hedge funds have income taxed as capital gains rather than income.. (Carried interest is risk free income. Capital gains come after an investor risks an investment. )
If you think that tax law isn't gamed to advantage the top 2% your foolish.

Fate
So, in order to fix our system, we just need to:

1. Become socialist.
2. Stay socialist.

If you think what I described is socialism your also foolish.
However, It does work better for working people and the lower middle class.... then what happens in the US. People have greater security and freedom. And a better standard of living.
If that means that socialism works better for the bottom 40 to 60%...
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Post 21 Oct 2017, 3:50 pm

rickyp wrote:fate
So, in order to fix our system, we just need to:

1. Become socialist.
2. Stay socialist.

If you think what I described is socialism your also foolish.
However, It does work better for working people and the lower middle class.... then what happens in the US. People have greater security and freedom. And a better standard of living.
If that means that socialism works better for the bottom 40 to 60%...


:laugh:

You’re killin’ It!

Firstly, you want the government to set wages. Secondly, you want socialized medicine.

Most importantly, you grossly misrepresent what happens in socialism. Tell me how great Venezuela is for the bottom 40-60%.
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Post 22 Oct 2017, 7:05 am

rickyp wrote:
And for corporations The federal rate is only 10.5% for small businesses... .


And it's 34% for small businesses in the US.

After the general tax reduction, the net tax rate for most corporations is 15%.


If that's the case, why do you object to the rate going down to 20% in the US?

You also need to understand that there are no where near the complex deductions available to Canadian corporations that there are in the US.


Given that I have spent part of my life preparing taxes for corporation, perhaps I understand that better than you? The most complex corporate deduction is for manufacturing corporations and Trump's plan gets rid of that one. So, Ricky, what complex corporate deduction do we get in the US that you don't get in Canada are you referring to?

Plus, small point, the minimum wage that must be paid in Canada is higher


Plus big point: the Canadian minimum wage is lower than Seattle's and much lower than what you recommend by using the term "living wage". The indignities that Canadians must go through. You need to raise the Canadian minimum wage substantially for it to be a living wage.

Furthermore, in some parts of Canada the waiting list for public housing is over 10 years. Why don't you fix your own country first and then get back to us. Those Canadian liberals ... I don't think they care at all about housing hungry disabled people.

The value of labor only increases for three reasons:(historical fact)
1) scarcity of available labor and ability of labor to move jobs.
2) organized labor bargaining collectively (the major reason for wage increases in the US historically)
3) minimum wage law.


The local gas station here is offering up to $14.25 per hour for employees. The economy is getting better. If we can get growth to 3% then you don't need #2.


rayjay
Under your proposal my wife and kids would all have their jobs disappear; but we aren't receiving food stamps or housing allowances. Another unintended consequence

Businesses always threaten to eliminate jobs when faced with paying higher wages. Its a tactic.
Its one that is often effective. Buts its almost always bluff.


Who said they all work for businesses? Stop assuming what you don't know.

The term "living wage" is more complicated than you realize.
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Post 22 Oct 2017, 1:11 pm

rayjay
And it's 34% for small businesses in the US.

And with the HST 23.5% in Canada (Ontario anyways) for small business.

rayjay
If that's the case, why do you object to the rate going down to 20% in the US?

I don't.
If it were simply applied, and if the budget ran at a surplus (since the economy is doing reasonably well) it would make sense to keep taxes low.
What you don't have is a balanced budget, nor is the tax code simple.
Start by simplifying the tax code so everybody understands who pays what ... then figure out if revenues are adequate to run the required services... (Probably are if you cut defense spending to a reasonable level) .
The notion that tax cuts pay for themselves, or that everyone will benefit from what Republicans falsely claim are tax cuts for the middle class, is simplistic nonsense.
The myth that was the Laffer curve was used to assert the trickle down theory that has been thoroughly debunked. Yet here we are, with the great Con man in the White House - and the same BS is being repeated.

rayjay
Plus big point: the Canadian minimum wage is lower than Seattle's and much lower than what you recommend by using the term "living wage". The indignities that Canadians must go through. You need to raise the Canadian minimum wage substantially for it to be a living wage.
Furthermore, in some parts of Canada the waiting list for public housing is over 10 years. Why don't you fix your own country first and then get back to us. Those Canadian liberals ... I don't think they care at all about housing hungry disabled people

never said it was nirvana. Just said that a higher minimum wage, and a reasonably high tax rate contribute to making the economy work better for the bottom 60 to 70% of the populace.
And please, always add in the cost of health care for a person or business in your comparison. Since Americans don't get it as a benefit from taxes, the additional cost to both businesses and individuals should be considered a tax to make a fair comparison.
(BTW since you mentioned housing. 65% of Americans own their own home. So do 65% of Canadians. We don't get to write off mortgage interest. And yet despite this incentive ownership is the same. Canadian homes do tend to be smaller. But then 43% of Canadians are mortgage free versus 29% of Americans... Is the mortgage deduction thing actually working? Or is it just putting more of the tax burden on renters ? and perhaps encouraging debt accumulation because of the ability to write off interest?)


rayjay
The local gas station here is offering up to $14.25 per hour for employees. The economy is getting better. If we can get growth to 3% then you don't need #2


Economic conditions have been up and down since 1980 in the US. And yet two things have been constant, the increase in income and wealth inequality and the decrease in the percentage of people working in organized labor. (Union membership was over 20% and now less than 13%.
https://inequality.org/facts/income-inequality/

The reason that organized labor is required is to allow labor to have the ability to negotiate a fair value. You need all three things to listed to ensure labor is valued properly, because when the economy isn't so good the lack of bargaining power that organized labor has ensures that wages go backwards.As they did whenever a recession hits in the US.

Rayjay
The term "living wage" is more complicated than you realize.

No its really not. Its insisting its complicated that keeps people fooled.