American Wages, the Minimum Wage and Income Brackets

In order to calculate taxable income business subtracts expenses from income...just as individual people take standard deductions or itemized deductions to determine their taxable income. Point is taxes are paid on income...

 

in other words, the more Labor Costs, the more you can Expense from your taxable income.

 

ALL COSTS are deducted from income no matter if they are 'more or less'. You think something evil is going on when in fact it is not...INCOME MINUS EXPENSES EQUALS TAXABLE INCOME...PERIOD!! For all people and all businesses!

 

The more labor costs, the more you expense from Income to arrive at actual, taxable income.

 

No that is not "capitalism". It is just a system employing money to replace "barter".

The definition of capitalism is very simple (from here):

Capitalism is merely the economic background in which people earn a living by working and then spending it upon goods&services that they have created ...

 

I never denied that such may be true!

But "income minus expenses equals taxable income" does not define either an economy or a country! Except for bores who think that taxation is the summum of economic outcomes.

We all live in a Market-Economy. Let's start there:

All that definition is saying is that we are all cogs in a market-economy. And how that economy is either structured or run depends upon the laws we establish for that purpose.

What is key to me as regards any market economy is that it should be FAIR AND EQUITABLE. Like a baseball game!

And ours is not because one side (that of those who accrue capital) has been favored by unfair rules, especially as regards the taxation of unfair sums-of-money that they supposedly "earn". And most in the country are too blind to see that they've been "had" legally.

Which means we have to change the rules of the "game" to make it more fair&equitable ...

 

the right wing may believe only the Rich are worth equal protection of the law.

 

My comment was to another poster who believes there is some advantage to business when they expense labor.

I look at the economy as a separate entity from society and government. Yes they are intertwined but they are separate entities. Trade or economy takes place whether it is two people trading something or a corporation with billion$ in revenue and thousands of employees. Along comes government who provides infrastructure and they want a piece of the pie...taxes. Then we have society or people and it is their responsibility to connect themselves to the private sector or government to sell goods and services or become an employee and create a lifestyle. Government cannot demand any rate of taxation because business will simply go elsewhere. Likewise, labor cannot demand higher and higher rates since business will simply automate more or go elsewhere. In both cases, taxes and labor costs are passed onto the consumers who have a tipping point at which they can no longer afford the products and services. So...when you and others casually talk about demanding higher wages, or living wages, or things being 'fair and equitable', first you are mingling in business where you have no rights to mingle, and second, you are forcing higher business costs which reduce competition and create inflation. Therefore, in this very complex economy, IMO there are no solutions to so-called living wages or things being 'fair and equitable'. All people create a lifestyle based on their ambitions and limitations/potential; if people are unhappy then people need to take steps to change something...

 

i merely believe it is disingenuous for Capitalists to claim raising the minimum wage as a cost of living adjustment is harmful to business.

 

Dear @LafayetteBis
I'm not saying laws should be established because of religion, but
on consensus of the people governed thereunder.

So for those who BELIEVE in certain laws as their religion,
sure, I believe in respecting that by their "religious freedom."

This principle of respecting equal "freedom of choice" for different people
is a naturally inherent law that I find to be universal by human nature,
regardless of people's beliefs. I find everyone wants this free will for
themselves, so that's why I ask this principle to be enforced on THAT basis,
because people tend to consent to this protection of their own free choice.

Not because of religion, but because they believe and commit to it as a standard.

You talk about religions not interfering with the laws of the state,
and I agree with you but NOT for the sake of rejecting religions, but because
of natural laws on religious freedom that prohibit Govt from establishing or prohibiting them.

The Constitutional laws on religious freedom GO BOTH WAYS.
NEITHER can the Govt interfere with religious free exercise.

 

Dear @LafayetteBis
The above issue can be resolved by an agreement
1. to allow such believers or groups to DEFUND programs that violate their beliefs.
2. to separate policies on abortion, with the Constitutional understanding that
laws can neither discriminate against or violate EITHER prochoice beliefs in due process
or prolife beliefs in right to life protections for the unborn. Both "due process" and "equal
protection of the laws" as well as "religious freedom of choice" are equally principles
under the Constitution, so NONE of this can be disparaged but all must be accommodated
equally when making or reforming laws.

I have used this explanation to convince many Prolife advocates to seek and support
better solutions that don't violate anyone's beliefs and protections of the laws.

3. instead of arguing "when does life begin" the real question is when does the
soul, identity, will or conscience of a person enter the physical body. And if that
is "FAITH BASED" then govt cannot make laws biased for or against one biased belief
over any other. Thus, it would be more consistent with the Constitution to SEPARATE
FUNDING and allow people to be under separate policies if they cannot agree on beliefs.

4. if that doesn't work, I offer this solution:
if one party pushes "right to health care" through govt
and the other wants "right to life" recognized through govt,
can the two parties AGREE to establish BOTH?
or agree to keep both as a free and equal choice left to
individuals outside govt?

Why not ask to treat these political beliefs equally?

How is it fair to force "right to life" to be pursued separately and funded independently outside of govt and not be allowed to endorse or enforce it
through govt, while those who believe in "right to health care" insist on
MANDATING that through govt and forcing ALL taxpayers to pay for it!

Isn't that a form of Discrimination by Creed?

When I pose the question this way, both sides tend to back off.
Neither side really wants EVERYONE to be able to push THEIR beliefs,
they only want to push THEIR OWN. So they can't agree to that.

(When I offer to treat Christian beliefs, expression and exercise in schools
"equally" as LGBT beliefs, expression and practices, I tend to get the reaction where Christians AGREE to let both be in schools as long as they can get God, prayer and Christian teachings back in as well.)

=============================================================

 

Not if the point is to replace govt programs with better ones
@danielpalos

Both Obama and Ben Carson believe in Microlending programs (where successful programs are
based on financial training and mentorship for business planning and development)
to break the cycle of poverty by teaching people to become independent and self-sustaining.

Why not replace reliance on handouts with longterm support to end poverty permanently?

www.paceuniversal.com
www.grameenfoundation.org
www.naca.com

 

Because they ARE facts if you have any knowledge of the manner in which economists MEASURE INCOME DISPARITY!

Of which you are apparently ignorant! (But you LOVE to believe the news when solid percentages increases in the GDP - yet another measurement by economists - comes up in the nightly-news.) Because as regards the subject of Income Unfairness you've got blinkers on!

If ignorance of the facts was bliss - you'd be in heaven ...

PS: Wakey, wakey! Here you are in, after all, an Economics Forum!

 

Bollocks! What planet do you live on? Because that planet of yours is NOT THE USofA!

The Facts:
*The Census Bureau has devised a measurement of the Poverty Threshold, which is an income level below which people are living in abject-poverty - given the cost-of-living in the US.
*That Poverty Threshold today in the US is $25K of annual income for a typical family of four. And based upon that income-level, around 14% of America's men, women and children are living below the Poverty Threshold! That's between 40 and 45 million of fellow Americans!

Now put those FACTS in a pipe and smoke 'em ... !

 

All the above, Madam, are statements that would apply to the European Union, which at 530 million men, women and children is 37% larger than the USofA.

And each one of those 530 million are covered by these measures (without which their country could not join the EU) that are crucial to an adequate and long lifestyle:
*Free (or very low-cost) National Healthcare for all its individuals,
*Very low-cost Tertiary Education programs allowing all the poor the opportunity to lift themselves out of poverty.

And the US has neither of the above ... !

 

equal protection of the law for unemployment compensation for simply being unemployed is more efficient since it solves for capitalism's natural rate of unemployment.

 

Nope. If the Minimum Wage is enforced by law, which it should be, then the wage-cost will have to be recuperated in the price of goods/services produced. So, yes, there is some price inflation.

The real benefit is the fact that the more they earn, they more consumers will spend*. If you imprison a work-segment in low-wages they must eke out an existence that no one should be forced to endure.

This would not take place were all jobs to adopt by law a Minimum Wage of (say) $15 an hour. Why not?

Such a wage will raise the cost of a BigMac by 30cents. But new-hires will continue for as long a American consumers keep buying. And they behave in that manner for as long as they are employed.

Wow ....

*And I don't want to scare anybody but some forecasts of the World Economy do not look good. See here from the IMF:

**I don't like outlooks that call for a downturn followed by a swift upturn. Far too easy, that. The Great Recession lasted from 2010 to 2012 in the US and much longer in Europe. But the Employment-to-population Ratio remained constant in the US between 2009 and 2014 (see here). Meaning what? Jobs were created as fast as total Employment lessened? But unemployment rose during that period. That is, "babies were being born, but unemployment still rose faster than job-creation."

 

Madam, I find it dangerous to blend Economics and Religion. "Religion is a belief handed down over the ages, whereas Economics is number-crunching - but with a semblance of artful deduction from the numbers".

I won't go down that road in a discussion. Sorry ...

 

Dear @LafayetteBis
I would HOPE the European countries all have patriots who don't depend on govt to enforce and defend laws
that empower people as govt directly!

Because I live in Texas, I am surrounded by this type of DIY culture of self-governance
and limited government. But other states and countries aren't as independent minded,
to the point of taking up arms to defend the laws yourself.

What I mean by America being founded on this, is in declaring independence and setting
up the Constitution, the laws of church and state and checks and balances to limit
Govt from oppressing individual citizens was the driving spirit behind Constitutional laws
and forming a union. This was in part inspired by Native American tradition of confederate
tribes with a tribunal system.

Great Britain, France, Spain and other countries with history of Church leaders ruling like Popes
or "divine right to rule" of Queens and Kings were what America was set up to get AWAY from.

And instead our Constitution is based on people using the laws to check govt,
not the govt making laws to control the people.

Our whole country's foundation was based on setting a system of checks and balance
to provide for that process of people reforming their own govt.

America was founded for and on that purpose, building on the traditions
and lessons taken from political history in Europe, especially Great Britain/English common law
and French philosophers most cited (key influences being John Locke who is credited for the
Classic Liberalism that became today's Conservatives who believe in limited govt, and maximizing individual civil liberty
and free market management of resources and programs; and
Rousseau credited for the Radical Liberalism that became today's Liberals who believe
in using govt as the central authority to establish the common will of the people for protection of general welfare).

So even though European traditions and teachings were the influence in America's foundation,
the purpose of setting up govt that separated powers and authorities was to AVOID
the historical issues in Europe with Church authority mixed in with government.

We don't have that in our history except if you count Political Parties as pushing their
Political Religions through the Judiciary and Executive branches to try to rule by Mandates.

And this is why it is so critical to teach, invoke and enforce the ORIGINAL purpose and spirit
of the Constitution which checked AGAINST such abuses of power by SEPARATING
beliefs/religion from Govt. Currently our parties (and corporate personhood loopholes)
are being abused to circumvent checks and balance on limited govt that these entities aren't required to follow.

Not yet, not until an educated citizenry rises up and finally calls an end to these abuses
attempting to bypass Constitutional checks and balances by abusing collective authority while claiming rights as individuals!

We will see if America has enough standing in authority of law to check against these abuses,
or if it will take other countries joining in this level of law enforcement against corrupting forces.

It seems all countries face similar battles, so it remains to be seen if America's
traditions of invoking Authority of Law through both the Church and State institutions
is enough to bring order and clean up the debts and damages from rampant abuses from bypassing the original laws.

 

It is a gamble to increase costs because it's unknown how the consumer will respond?

 

Forcing firms to pay above market price is obviously be harmful. If it were helpful, they would be doing it already.

 

If they want to eat, they'll find a way to pay for their food. I live in a nation with a relatively high minimum wage, but our food, electricity, fuel, real estate, cars, etc are all expensive. A pack of cigarettes is $40 here, yet it's the 'poorest' who smoke. That's what I mean about people finding a way.

 

higher paid labor pays more in taxes and create more in demand.

 

Sorry, but compared to the US, that is precisely the case. Europeans tend to be more Leftist than in the US.

No doubt, but that will take a very willful American public to stop the Replicant Party that steadfastly refuses to enhance the Minimum Wage nationally.

And since it controls the Senate, if Americans do not give the majority over to the Dems, nothing will happen to change America's incredibly low Base Minimum Wage of $7.25 per hour.

The Minimum Wage is National Law - so if Texans want to challenge its increase before the Supreme Court they have every right to do so.

We all have opinions over which we LOVE to waste our time and effort ...

 

People can only find a way relative to how much money they have and how they prioritize their spending. Plenty of US businesses are barely hanging on today so increasing costs might be the nail in their coffins...