Do the rich pay their fair share?


srmaher
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I love Prager University. Dennis Prager changed how I view life. 

 

Define "fair". Define "rich". Both almost always mean "Someone who has more than me, and I am jealous because of it." 

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There's a very simple way to get low income wage earners to pay more taxes.  Increase the minimum wage.  And do it right this time, by pinning it to inflation.

My only question with this is that, when taking an economics class it was suggested that minimum wage also contributes to inflation. So even ignoring questions about market equilibrium points (and political reasons such as hidden taxes), would fixing minimum wage to inflation create a self feedback loop ever increasing inflation. Not that some inflation is bad, but how much inflation would it cause, and would it do more good than harm?

Serious questions.

 

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My only question with this is that, when taking an economics class it was suggested that minimum wage also contributes to inflation. So even ignoring questions about market equilibrium points (and political reasons such as hidden taxes), would fixing minimum wage to inflation create a self feedback loop ever increasing inflation. Not that some inflation is bad, but how much inflation would it cause, and would it do more good than harm?

Serious questions.

 

 

It depends on what source you use to pay the change in minimum wage.  If you push the full cost onto consumers, you'll get inflation.  If you push the cost onto high income wage earners (ie, reduced wages at the top of the income bracket) you'll get less inflation.  The ideal balance is probably somewhere in the middle.

 

In economies of scale, the inflation wouldn't really be that much.  Someone did some back of the napkin calculations somewhere (I'm too lazy to look up the link) and found that if McDonald's increased their pay to a minimum wage of $9.50 per hour, they'd have to raise the cost of the Big Mac a total of 2 - 5 cents.  Not particularly burdensome.

 

The problem of increasing the minimum wage is going to be felt most acutely by businesses with 5-20 employees.  And those increased costs might just be enough to put them out of business.  So there are real and serious downsides.

 

But that way I look at it is this: we can choose the kind of pain we want to endure.  We can endure a low minimum wage and increasing poverty, or we can increase the minimum wage to keep up with poverty (for example, working a full time minimum wage job brings your annual income above the poverty line) and lose some small businesses in the short term.  I don't find either of those particularly appealing.  But I'd rather suffer in the short term and address the longer term issue.

 

In my estimation, one of the things we did wrong when we first established the minimum wage was not tying it to inflation.  If we had done so at the start, the wage gap probably wouldn't have grown so big and this wouldn't be so big an issue right now.  Instead, we seem to be at a point where there are two paths to reducing poverty.  Tax the wealthy to pay the welfare bill of those at the bottom, or increase the minimum wage to encourage people to work their way out of poverty.  Neither solution is ideal, because an ounce of prevention would have prevented a pound of pain, so to speak.

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The real problem is when you enter the mentality that a minimum wage jobs should be your ending point and not your starting point. No one works at McDonalds and says "I've made it" do they? Does the train stop there?

 

Responsible people will agree that having a family, owning a home, driving a nice car, etc requires more than the ability to roll out of bed in the morning. 

 

If you think that employer won't pass the expense of payroll increases on to the consumers I have a bridge to sell you. You are correct in that bigger corps may not feel the pinch as much (but they will, and they will cut) but the majority of people are employees of small to medium sized businesses these types of business cannot eat the expense and will either collapse or get smaller, both of which will increase unemployment. Wait then those unemployed people can go work at Mcdonalds.....were a weeks pay doesn't even make the car payment.

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The problem of increasing the minimum wage is going to be felt most acutely by businesses with 5-20 employees.

 

 

Actually, it's felt most acutely by those already making between the new wage and 2x that wage; very few of them have their wage pinned to minimum in some "minimum plus $x" form, so they don't get a raise, (or they don't until enough of their colleagues leave that the employer has to do something, which can take months) but they see the kid behind the counter suddenly making only $0.50 less than they've worked to gain the skills to earn, for the exact same job he was earning $2 less for yesterday, and the also see their relative buying power diminish significantly as the fry guy can afford the same car/apartment/whatever that they've worked much harder for.

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The thing is... it's not only McDonald's who will be increasing prices.  It will also be the company that produces the lard that McDonald's cooks their fries in...  So, 2-3 cents is not the only thing we are talking about.  We are talking about increased cost overall of everything.

 

Basically, it's tantamount to the difference between buying gas in California versus buying gas in Texas... which bleeds into everything including buying milk in California versus buying milk in Texas and even building a house in California versus building a house in Texas.

 

Increasing cost (wage is a cost to a business) always increases the cost of living of the individual so that you have to be able to qualify the benefit of an increase in pay for a person making minimum wage to the cost of living increase for that same person caused by that increase in pay.

 

In a competitive market where there is more jobs than there are workers, increasing the minimum wage improves economic conditions.  But when there are more workers than there are jobs, increasing the minimum wage stunts economy.

 

So... if I was a politician, I would abolish minimum wage altogether and concentrate on keeping market conditions such that jobs will always be equal to or less than available workers.  Because that... has the most impact on the lowest wage a company will be willing to offer and still have somebody want to work for them.

Edited by anatess
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There's a very simple way to get low income wage earners to pay more taxes.  Increase the minimum wage.  And do it right this time, by pinning it to inflation.

 

Or maybe change education to a system that teaches a kid how to actually do something worth a competitive wage. It is not a question of low income earners paying more taxes, it is about a fair tax system that isn't punitive  toward those who achieve.

 

Too bad the so called wealthy are so demonized, yet they fund the government handouts and subsidies. Our tax system really sticks it to the middle class folks that are not rich but are not poor.

Edited by bytor2112
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I don't think it matters if the rich are paying their fair share. The current concept of wealth is meaningless except insofar as we agree it has meaning.

 

If we didn't agree dollars were worth anything, they wouldn't be. Gold - Same thing. With the exception of concrete measures of wealth, such as food, land ownership and wealth-creation centers such as factories, the current concept of the economy is meaningless.

 

I don't know how to fix it while we live in a world of scarcity(Even artificial scarcity in some places).

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I don't think it matters if the rich are paying their fair share. The current concept of wealth is meaningless except insofar as we agree it has meaning.

 

If we didn't agree dollars were worth anything, they wouldn't be. Gold - Same thing. With the exception of concrete measures of wealth, such as food, land ownership and wealth-creation centers such as factories, the current concept of the economy is meaningless.

 

I don't know how to fix it while we live in a world of scarcity(Even artificial scarcity in some places).

 

Even scarcity has no meaning except for what you assign to it.  Live in the US and then live in the Philippines... when you go to the movies in the US, the smallest tub of popcorn and drink cup you can get does not exist in the Philippines.  They're bigger than the biggest popcorn and drink Philippine theaters offer.  And you will never see left-over popcorn left in the seats.  If you glance into the trash bin of the theater exit in the US, more often than not you will see a ginormous tub of popcorn more than half-way full sitting inside.  So, for a Filipino looking into the US, scarcity does not exist here, so it is their dream to win the visa lottery and live la vida loca.

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Or maybe change education to a system that teaches a kid how to actually do something worth a competitive wage.

 

Oh now you're just being silly.

 

Next you'll say they should be taught how to dress and groom themselves like grownups so they don't show up for job interviews in shorts and a t shirt.

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Oh now you're just being silly.

 

Next you'll say they should be taught how to dress and groom themselves like grownups so they don't show up for job interviews in shorts and a t shirt.

 

Hmm... that could be the ticket!

 

:D

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Do the rich pay their fair share of taxes?

 

You might just as well ask if they pay their fair share of tithing?

I've always found it curious how some Latter Day Saints can be in favor of a progressive tax system (considering it "fair"), while at the same time believing the tithing program (completely UNprogressive) is fair. 

 

Seems to me that either God got it wrong (tithing) or we got it wrong (taxes).
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Great video showing who really pays the most in taxes.

Do the Rich Pay Their Fair Share?:

as dictated by Law? yeah probably. is the Law fair? probably not.|

that being said there are a lot of rich folk in the US that give more than their fair share back to society in some way (you just rarely hear about them).... and then you have all the parasitical ones.

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Do the rich pay their fair share of taxes?
 
You might just as well ask if they pay their fair share of tithing?
I've always found it curious how some Latter Day Saints can be in favor of a progressive tax system (considering it "fair"), while at the same time believing the tithing program (completely UNprogressive) is fair. 
 
Seems to me that either God got it wrong (tithing) or we got it wrong (taxes).

 

 

The rich pay enough, the middle/upper middle class gets soaked, and the poor to low-middle class get kid-glove treatment.  That being said, it's probably a stretch to insist that the tithe is what God intended that secular governments use as a model for taxation. 

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Depends on who you ask.

 

There are people who believe that until the rich is poor or the poor become rich it will never be fair.

 

Government makes that happen; I feel poor right up until I do my taxes, then realize I'm apparently rich in the .gov's eyes.

 

My $700 car and $300/mo apartment are apparently quite a bit more luxurious than I realized.

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The rich pay enough, the middle/upper middle class gets soaked, and the poor to low-middle class get kid-glove treatment.  That being said, it's probably a stretch to insist that the tithe is what God intended that secular governments use as a model for taxation. 

 

Having thought about this for some time -- I think I may disagree.  I think the poor should be taxed on their government subsidies and assistance.   I believe all citizens should be invested in their government and how taxes are spent.  Realizing that some may be concerned that the government is paying benefits with one hand and taxing with the other hand.  But I think so many problem would be solved by taxing the poor.  Like all citizens would realize that taxes slow the economy and take money from citizens and that government waist hurts all citizens - including the poor. 

 

Currently the poor have no dog in the fight to make government responsible for how taxes are spent.  In fact as I think about this the more it seems to me the by investing the poor in government that many problems in government would have greater incentive in the eyes of all citizens for effective resolution -- Including what is a fair taxation.

Edited by Traveler
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If you only pay $300 a month for rent, and manage to drive a reliable vehicle that is valued at $700, then you are rich!  :cool:

 

You make two false assumptions; reliable and valued at $700.  Blue book in excellent condition might be $700, but it's been wrecked at least twice before I got it, and it still needs quite a bit more work.

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