Tax cuts or Pay Raise?

Discussion in 'Business & Economics' started by Write4U, Apr 30, 2021.

  1. Seattle Valued Senior Member

    Messages:
    8,857
    No offense (really) but I've noticed that you basically have a rant that you want to deliver and you don't really let facts or logic get in the way.

    You bring in slavery (for some reason) and of course no one is for slavery and no one is denying history so why even make those statements?

    Some manufacturing went to China because wages are lower there. They are getting higher all the time as their economy grows and they are starting to look to India and the African continent.

    Actual manufacturing output hasn't really declined here. The jobs have as automation has become more prevalent.

    "Rich people" weren't bailed out. Companies in some industries were. The 10% are local business people, doctors, lawyers, corporate managers..your neighbors. The 1% are Bezo, Gates, etc.

    The 10% invest in stocks, real estate. They weren't bailed out of anything. They are doing what you and anyone else can do to varying degrees. Delay self-gratification and put some money in some type of investments. Time does the rest.

    You want "the low end" to get a "substantial" raise? Why? People get raises when they get training, skills that not everyone has and therefore they have to be paid more because of that limited market.

    If your skills are more commonplace you make more when there aren't enough others willing to do that job. It's not about waiting for your time, your turn to be rewarded, etc. No one else is paid that way either.

    I don't recall if you've made this type of comment but I'll respond anyway. Some would consider the points I'm making as "right wing". It isn't. It's economics. It's just the way things work in a capitalist society and not a "pure capitalist" society at that. There is plenty of government regulation here. I would agree that too much of it is influenced by the industry that is being regulated but that is another discussion.

    Regarding Biden and his current proposals regarding spending and taxing. Most of that will actually effect the 10% much more than the 1%. Your neighbors are the ones being taxed more so that the government can start a bunch of projects that may or may not need to be started.

    The debt will go up. These tax proposals will not actually result it the kind of funds needed to pay for all this. Most of them will probably be changed in the future before that could happen and many of them will not bring in the kind of money anticipated because "people aren't stupid" and will react accordingly.

    They can just have more smaller projects that fall beneath the taxing threshold and they can also control the timing. They can just not sell or they can sell smaller amounts or just wait until Biden is out of office.
     
    Last edited: May 2, 2021
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  3. Write4U Valued Senior Member

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    20,069
    You mean no for-profit company is going to invest billions of dollars on a bet. They don't care who suffers as long as the bottom line shows a profit. And when they do find a profitable product, they tack on the R & D expense which they already deducted as a tax write-off expense and even when the R & D is fully received, they don't lower the price when there is continued demand. Double the profits and cudos from the managing board, who can count on another yearly bonus to the tune of millions of dollars.

    It is the not-for-profit companies that have no pressure placed on them by greedy investors. They do their work from conviction and in dedication to the public good. That's why Universities are ideal settings for all sorts of R & D. That is not-for-profit colleges.

    For-profit colleges get a pretty bad rap. And frankly, a lot of them deserve it. The vast majority of high-profile corruption cases on the higher education landscape occur in the for-profit sector. And evidence suggests that the motives, priorities and tactics of for-profit colleges often make them particularly susceptible to deceptive recruiting practices, poor quality control, and the conferment of meaningless degrees.

    For-Profit Colleges vs. Non-Profit Colleges — What’s the Difference?
    Witness Trump college!
    https://thebestschools.org/magazine/for-profit-vs-non-profit/
     
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  5. Seattle Valued Senior Member

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    8,857
    The debt is distributed to all people but only the taxpayers will have to actually pay it back one day. I agree, no need to burden that newborn baby so why "stimulate" the economy with several trillion dollars in new debt?

    The tax the rich plan will not result in that kind of money. Everyone makes rational decisions including the rich. If someone tells you they are going to double the taxes on capital gains...guess what you are going to do something about managing your capital gains.

    Lowering the capital gains would result in more tax dollars and only slightly increasing other taxes would also bring in more. People handle increases on income taxes (wages) fairly well since they are still earning more money and can just hope for a wage increase or a better job.

    With capital gains, you don't have to incur the tax. Just don't sell or sell amounts below the limit or split it up into a multi-year period. You can also just switch investments from a non-preferred asset class to a more preferred asset class. No one is just going to suddenly start paying twice the taxes on something where they have that much control.
     
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  7. Write4U Valued Senior Member

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    20,069
    It depends on what you do with the money. Invest in the measurable improvement of economic opportunities, where it will benefit that baby 18 years from now, or give it the rich so they can tuck it offshore out of reach from the IRA and stick that now 18 year taxpayer with their bill.
     
  8. Seattle Valued Senior Member

    Messages:
    8,857
    No one is pushing for profit colleges. Some colleges do basic research. Once it is developed to a more commercially viable stage it's handed off to the private sector.

    I don't think we want to get into accounting here. There is no free lunch. If you have losses on multiple unsuccessful projects you ultimately have to write them off against successful projects.
     
  9. Seattle Valued Senior Member

    Messages:
    8,857
    If you reduce the taxes of the rich you aren't "giving" them anything. It's their money. You are simply taking less of it.

    Our infrastructure didn't suddenly get worse. It's not worse than it was 20 years ago. Giving the government a big check and having the politicians decide how to spend it isn't likely to help that newborn baby now or 18 years in the future.
     
  10. Write4U Valued Senior Member

    Messages:
    20,069
    I only bring in slavery to demonstrate that rich people will not invest when it does not immediate return on the investment, such putting it in the stock market.

    Ask why is the nation infrastructure in shambles? Cause no self-respecting capitalist company would invest in road or bridge repair if they cannot make a profit on it. They only roads for-profits make are logging or mining roads.

    There certain national priorities that can only be performed by government. That is not Socialism , that is long term planning to stey relevant in an advancing world .
     
  11. Seattle Valued Senior Member

    Messages:
    8,857
    Someone just read an article about rare earth metals and decided to stick it in somewhere whether it belongs there or not.
     
  12. Write4U Valued Senior Member

    Messages:
    20,069
    Right, you write it off as a "loss", then proceed to add the loss to your next successful product and you recoup your "loss" for which you received a tax credit to begin with.
     
  13. Seattle Valued Senior Member

    Messages:
    8,857
    Of course there is a roll for government. I'm not for private prisons, governments pave the roads, regulate air travel, the court system, contracts, crime, etc.

    However the actual work of repairing and building roads is generally done by the private section with a government contract.
     
  14. Seattle Valued Senior Member

    Messages:
    8,857
    That's not how accounting works.
     
  15. Write4U Valued Senior Member

    Messages:
    20,069
    That's how big pharma works. While in R & D they write the expense off every year, until they have a workable product at which time they add the R & D expenses to the price of the product, i.e. cost+ . Then when after some time the cost of R & D has been recovered but the product is still popular, they just keep that cost+ profit structure until they get competition and have plenty leeway to reduce their own price.

    Drugs are some of the few mass produced items which increase in cost relative to demand, instead of reduction in cost by efficient mass production.

    Why have the costs of the most popular drugs increased by some 14+% in the last 3 years?
    Note the greater price increase after the trillion dollar Trump economic stimulus tax refund.
    Findings
    https://www.advisory.com/en/daily-briefing/2020/03/09/drug-prices#
     
  16. Write4U Valued Senior Member

    Messages:
    20,069
    Right, and that upper 10% including the 1% got some 60 % of the trillion dollar tax cut and was detrimental to job creation.

    When Tax Cuts Don't Work
    https://www.thebalance.com/cost-of-trump-tax-cuts-4586645
    And that was the bulk of the tax cut which never produced anything or stimulated the economy at all. That is not trickle down economics , that's Trump just playing favor the rich and reduce my own tax liability, and screw the working class with yet another increase in the national debt. That doesn't bother you?, when hard working people get paid a measly 7.50 p/hr on a part time job that does not have medical insurance??? Please tell me that is not what the US is all about.
     
  17. Seattle Valued Senior Member

    Messages:
    8,857
    I don't worry too much about taxes being reduced. They are still paying most of the taxes after all. Sure, the Trump tax reductions weren't really needed. The Reagan ones were IMO.

    If you reduce my taxes I don't consider the reason to do so to be to increase the number of jobs. It's to take less of my own money.

    Reducing taxes on the rich is just letting them keep more of their own money however. Those in low paying jobs wouldn't have better jobs if the rich paid more. Their marketability doesn't change either way.

    I think everyone should have medical coverage. I've already said that. That's something that the government should be involved in. It never should have been up to businesses to worry about that.

    Regarding the hard working poor. People don't get paid by how hard they work and everyone works hard in their own way so I don't get your point there.

    The minimum wage is all over the place locally. It's $15 where I live (I think). All Amazon jobs pay that. Since anyone can become an electrician, plumber, fireman, soldier without too much effort I'm not especially concerned about the few with temporary minimum wage jobs. It's up to them to do something about that as it is for you and I and everyone else.

    It doesn't really help to become to fixed on "the rich" as a scapegoat for working conditions for the "poor". The "poor" are actually usually those not working. Those working at low wage jobs are usually doing so for a reason so this is a false argument in a sense.

    There are people who are working who are toward the bottom of the wage scale depending on their skills, motivation, etc. but there really isn't much to debate regarding the rich and minimum wage jobs. The two subjects just aren't related.

    Dennis Tate mentions that he is a janitor because it gives him more time to read or whatever his comment was. He probably is way above the minimum wage. If he wanted to make more he would put in more effort in his job search. He is a logical person and therefore he made a logical choice for himself.

    There is little reason to believe that most people making the minimum wage aren't also logical people with their own reasons.

    I made close to the minimum wage once for about a year when I was between college and grad school. One summer way before that I made a lot more than the minimum wage when I worked in construction and was able to buy a used car before going back to college.

    While I was at the nearly minimum wage job two wives had work there for years while raising their families. Their husbands had higher paying jobs. Another woman was retired and did it to make a little money and to stay active.

    For short periods of time during the holidays college students worked there on their holiday breaks.

    The system works. The examples of a man with several kids not being able to support his family are usually just excuses for poor decision making or lack of motivation. You don't even have to be all that motivated to make more.

    You can go and work in any warehouse loading trucks, even longer term employees in retail generally get way above the minimum wage if you stay there for a while. These excuses that are usually brought up are just that, excuses that seek to put the responsibility on other's for one's own poor decisions.
     
    Last edited: May 2, 2021
  18. Write4U Valued Senior Member

    Messages:
    20,069
    As were the tax increases by Clinton, which did not negatively affect the economy and resulted in a budget surplus, which was never used to reduce the National debt for which that was intended, so that the interest savings on the debt could be used for all kinds of beneficial purposes, such as education and infrastructure. A very sound economic plan. The money we squander on interest on the National debt is truly shameful.

    Now that we truly need to borrow to pay for this horrendous pandemic which is no one's fault, but is not over yet by any menas, everybody complains we are spending too much, and government is restricting people's freedom of choice whether to wear a preventive mask.

    The stupidity has no end, as India is demonstrating for not investing in aggressively combating this scourge. We may be in this WAR for a long, long time, despite our best efforts and selfish hoarding. As long as we have "Republican representatives of the people who declare that the White European gave birth to this nation and that the native population had no culture before the white man installed the Constitution.", in any form of power, I see a very bleak future ruled by con-men and the morons they control. How many of Trump's close confidants have committed serious crimes? I see more than I can count on both hands.

    Give Biden a break, he inherited one of the greatest disasters ever befallen this country and now we are too poor to borrow the money to pull us out this hole? There is something wrong here. Apparently government is no longer needed at all and lets just get into a free-for-all, where every body has a gun and when you don't like something you just kill it, like running over protesters with your car, just like the good old west.

    I am from Amsterdam, Holland and as a kid I remember seeing Hitler on the news reels in the movie theater.
    Tell me why what's happening right now reminds me of that dark time.?.
     
    RainbowSingularity likes this.
  19. Seattle Valued Senior Member

    Messages:
    8,857
    Clinton reduced capital gains taxes and by definition a budget surplus reduced the debt beyond what would have happened (the debt would have increased).

    The Republicans aren't in charge at the moment. I like Biden. I'd rather have Biden as President than Trump. I don't think he has a good understanding of economics (I think you could say that about most Democrats and many Republicans).

    I wouldn't be too concerned about paying the interest on public debt for several years for several reasons. One is that interest rates are low so it's not a factor. The other is that the Fed has to remit by law all profits at the end of the year to the Treasury so when rates go up the profit remitted to the Treasury goes up and therefore "paying interest on the national debt" isn't much of an issue.

    It's largely paying that interest to itself. That's not to say that "printing" money endlessly is responsible. It's not but we are actually paying for "printing" all that money now and it's not really about burdening the children of the future. We are basically paying for all that "free" money now by reducing the buying power of the dollar. Sure you still have that $10k in the bank but it only buy as much as $5k would buy a few years ago so your money is worth less.
     
  20. RainbowSingularity Valued Senior Member

    Messages:
    7,447
    it looks like a lot of the system is designed and run for that very thing
    funny how only the celebrity democrat is found guilty & of something that business lobbyists can do legally to the law and politicians
    crazy
     
  21. Write4U Valued Senior Member

    Messages:
    20,069
    Well, I have to disagree with that slight of hand.
    Not increasing the debt is not the same as reducing the debt and have resulting interest savings which can be used for productive efforts.

    As for the rest, I have had my rant. I hope I haven't offended anyone, because I really love the land and hate to see it be destroyed by people who have absolutely no respect for nature and frankly who do not deserve to live in this paradise called Earth.
     
  22. Vociferous Valued Senior Member

    Messages:
    2,046
    Simple answer: Only a tax cut could be a permanent pay raise.

    This is very basic economics, assuming you mean a government mandated pay raise in the form of minimum wage. People making $7.25/hr suddenly making $15/hr is not a pay raise in terms of the whole economy, nor even in the long-term for the affected individuals. Employers cannot remain in business without passing that added operation cost on to their customers, cutting everyone's spending power and slowing economic growth. Those already earning $15/hr or more would either have their spending power slashed to recession levels, at least, or their employers forced to give comparable raises to all/most wage levels. This then forces every industry to lose workers (the opposite of a pay raise) or raise prices, either drastically slowing economic growth, as the value of the dollar plummets. In the end, those who initially get the raise in minimum wages end up at the same relative spending power they started in, only any attempt to save money has been decimated by inflation.

    The only permanent pay raise is a booming economy, and that only happens when people have excess to invest in new businesses and jobs. The only way government can encourage investment is with lower taxes. Otherwise, you're investment pays less, due to inflation, than you put in.
     
  23. Write4U Valued Senior Member

    Messages:
    20,069
    for whom?
    Trickle down economics as basic economics has been tried and tried again by Republicans and each time it has failed.
    Read the recent economic history.
    https://en.wikipedia.org/wiki/Trickle-down_economics
    False economic voodoo!
    The only way to get a booming economy is to give as many people spending money as possible so that demand for goods not money goes up, and additional workers are needed.

    Throwing money at rich people doesn't accomplish anything except to make them richer without having to produce anything!!!!!!!

    Poor people don't need tax cuts, rich people do!!!!
    Rich people don't need pay raise, poor people do!!!!


    There is one single truth ; Give a poor person spending money he will spend it on manufactured goods . Give a rich person, who has or can afford to buy everything already, additional money he will put it in the bank or in the stock market where it only garners more money without producing a single job or demand for goods.

    Since 1979, pay and productivity have diverged.
    Why this happened—and how we can fix it
    https://www.epi.org/productivity-pay-gap/

    Rich people do not need extra money in order to buy anything or hire anybody. They are rich!!!!!!! A couple percent tax cuts just makes them richer without the need for producing anything!!!!!!

    Poor people need extra money, to buy health insurance before they can even think of buying a new energy efficient refrigerator !!!!!!!! A couple percent tax cut on minimum wages is not going to buy those things!!!!!!

    And as far as cutting government services. That's really stupid!!! ....., government is the only large not-for-profit corporation which provides services for all and charges only for COSTS, whereas all for-profit companies which provide limited services and goods and always charge for COST PLUS.
     
    Last edited: May 3, 2021

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