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Old 05-14-2018, 03:58 PM
 
24,956 posts, read 11,634,183 times
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Some of the most obscenely wealthy pay a tax rate of 14%. We now this because Romney released his taxes during his presidential run. in 2011 he paid a effective rate of 14%.


Meanwhile everyone making less then 100K paid that in social security and medicare alone. And then paid more on top of that.



wutitz is right about it being a fiction. But its a nice way to hide that you are often paying a higher rate then the truly wealthy.
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Old 05-14-2018, 04:11 PM
 
Location: Old Bellevue, WA
18,794 posts, read 13,594,333 times
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Quote:
Originally Posted by Elliott_CA View Post
Would employee's pay go up if payroll taxes were eliminated? No. Those funds would go to profits. For the last 15 years that's been the trend: as productivity and profitability increases, wages have been flat. Corporations are not sharing their success with employees.

http://phillipsandco.com/files/5615/...te_Profits.JPG


Well you, and all the other legion of posters who agree with you, disagree with the CBO, their army of PhD economists, and with most economists. See post #1. But you guys are proving my point that a majority of Americans don't understand this.


The reason it would not go to profits is competitive pressure. Say the 6.2% so-called "employer's share" were to disappear tomorrow. Your employer X might say "I'm going to keep that money for profits." But then the employer across the street will say, X is getting a bargain here. I'm going to offer you 3.1% of that. And so on, until the entire 6.2% is going to you. This is all econ 101. If you wish to argue it, your argument is with the CBO and the entire economics profession.
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Old 05-14-2018, 05:22 PM
 
7,146 posts, read 3,719,074 times
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Originally Posted by wutitiz View Post
The reason it would not go to profits is competitive pressure. Say the 6.2% so-called "employer's share" were to disappear tomorrow. Your employer X might say "I'm going to keep that money for profits." But then the employer across the street will say, X is getting a bargain here. I'm going to offer you 3.1% of that. And so on, until the entire 6.2% is going to you. This is all econ 101. If you wish to argue it, your argument is with the CBO and the entire economics profession.

Nonsense. If the employer saved that 6% and was unable to pocket it, competitive pressure would see it go towards lowering end consumer prices to gain market share. That is econ 101. Price competition far outweighs salary competition. Companies like Amazon seek to become more efficient in order to lower prices not increase salaries.
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Old 05-14-2018, 05:31 PM
 
2,253 posts, read 1,395,217 times
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Quote:
Originally Posted by wutitiz View Post
Well you, and all the other legion of posters who agree with you, disagree with the CBO, their army of PhD economists, and with most economists. See post #1. But you guys are proving my point that a majority of Americans don't understand this.


The reason it would not go to profits is competitive pressure. Say the 6.2% so-called "employer's share" were to disappear tomorrow. Your employer X might say "I'm going to keep that money for profits." But then the employer across the street will say, X is getting a bargain here. I'm going to offer you 3.1% of that. And so on, until the entire 6.2% is going to you. This is all econ 101. If you wish to argue it, your argument is with the CBO and the entire economics profession.
Why doesn’t the CBO advise Congress to pass laws to the IRS to allow the employees to take deductions on the payroll taxes their employer apparently doesn’t pay? Why should businesses get the economic benefit of shielding their income bu deducting payroll taxes, if it’s so “obvious” the cost is bore by the employees?

Clearly the tax law Congress has chosen to pass shows who they think really has the burden of these expenses.

Last edited by Thatsright19; 05-14-2018 at 05:44 PM..
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Old 05-14-2018, 05:33 PM
 
2,253 posts, read 1,395,217 times
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Quote:
Originally Posted by wutitiz View Post
Well you, and all the other legion of posters who agree with you, disagree with the CBO, their army of PhD economists, and with most economists. See post #1. But you guys are proving my point that a majority of Americans don't understand this.


The reason it would not go to profits is competitive pressure. Say the 6.2% so-called "employer's share" were to disappear tomorrow. Your employer X might say "I'm going to keep that money for profits." But then the employer across the street will say, X is getting a bargain here. I'm going to offer you 3.1% of that. And so on, until the entire 6.2% is going to you. This is all econ 101. If you wish to argue it, your argument is with the CBO and the entire economics profession.
What happened when private employers cut pensions? Did that pay gradually all return to the employees from competitive pressure?

When employers slashed on the job training and forced the cost of education onto the employees, did salaries rise?
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Old 05-14-2018, 06:32 PM
 
8,711 posts, read 2,406,950 times
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Originally Posted by jetgraphics View Post
WRONG.
All taxes come out of the pocket of the consumer.
Where else does the employer get the money to pay his employees?
And you can bet that the price is bumped high enough to cover his costs and still make a profit.
Or he goes bust.

Which also means if government ceased taxing business and labor, prices would plummet.
Not if giant tariffs are put on imported goods which we have been getting incredible bargains on.
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Old 05-14-2018, 09:08 PM
 
6,168 posts, read 3,260,777 times
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Quote:
Originally Posted by wutitiz View Post
I learned eons ago in econ 101 that the "employer's share" of social security contributions amounts to a bookkeeping fiction, an economic sleight of hand. Officially, the current rates are 6.2% (of income) paid by the employer, and 6.2% by the employee, for a total of 12.4%. There's also a 1.45% payment by employer and employee for Medicare.


All told, it adds up to 15.3% of every paycheck, capped currently at $128,400/yr.


The truth is that all 15.3% comes out of the employees' pockets. This is generally true of payroll taxes. The Congressional Budget Office is staffed with bunches of PhD economists who understand this. For all analysis,


https://www.cbo.gov/sites/default/fi...xRates2006.pdf


I knew a guy who owned a real estate business. When I told him the entire 15.3% comes out of employees' pockets, he looked at me in disbelief. "I write those [SS] checks," he exclaimed. I bet that not one in 100 Americans understand this, even though Social Security is not far from being 100 years old.
6 of one, half a dozen of another. It still goes toward the employee's benefit. And NO...the company would not automatically raise wages 6.2%, if the payroll tax were suddenly cut. Whoever thinks that doesn't understand business.

Your wages are set by the market...supply and demand. And in my earlier days, by discrimination.

The SS taxes paid by the employer can only be considered as costing the employees in the sense that all expenses for the business "cost" the employees. But that's not really true. The company needs to make a profit...but there's no cap on the profit. If the co. saves money on health insurance or toilet paper or payroll taxes, the company looks FIRST at that as more profit margin. Then, and only then, will it consider giving wage increases, IF necessary to keep their employees.

You only pay someone what the market dictates, or however much it takes to keep someone, and not one penny more.

This is a tired, repetitive conservative meme, where they keep trying to tie taxes of companies & the wealthy to working class & middle class jobs and wages. The two or not related in any meaningful way. And that's a fact.
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Old 05-14-2018, 09:58 PM
 
1,124 posts, read 1,228,679 times
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The cap of $128,400 is only for Social Security. There is no cap on the 1.45% Medicare rate
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Old 05-14-2018, 10:09 PM
 
48,973 posts, read 39,428,364 times
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Quote:
Originally Posted by wutitiz View Post
The points are a) the gov't lies to us by perpetuating this bookkeeping fiction; b)most Americans are not aware of it/don't understand it. A third point might be that few public schools have ever taught economics. IMO that is because the gov't doesn't want people to understand things like this.
I hate to break it to you but most Americans are morons and most highschools offer economics but dude, it's a hard class with math and stuff....sooooo you want it to be a mandatory class for graduation?

Because that won't happen because it will destroy graduation rates which is unacceptable or they'd have to dumb the class down to levels where those passing STILL wouldn't get your point.

Basically, we're having a conversation that the majority of Americans are either unwilling or incapable of ever having.

It's a grim fact.

So, ask yourself. Is this a nefarious government plot or are Americans lazy and stupid because they historically could be?
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Old 05-14-2018, 10:16 PM
 
48,973 posts, read 39,428,364 times
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Quote:
Originally Posted by bpollen View Post
6 of one, half a dozen of another. It still goes toward the employee's benefit. And NO...the company would not automatically raise wages 6.2%, if the payroll tax were suddenly cut. Whoever thinks that doesn't understand business.

Your wages are set by the market...supply and demand. And in my earlier days, by discrimination.

The SS taxes paid by the employer can only be considered as costing the employees in the sense that all expenses for the business "cost" the employees. But that's not really true. The company needs to make a profit...but there's no cap on the profit. If the co. saves money on health insurance or toilet paper or payroll taxes, the company looks FIRST at that as more profit margin. Then, and only then, will it consider giving wage increases, IF necessary to keep their employees.

You only pay someone what the market dictates, or however much it takes to keep someone, and not one penny more.

This is a tired, repetitive conservative meme, where they keep trying to tie taxes of companies & the wealthy to working class & middle class jobs and wages. The two or not related in any meaningful way. And that's a fact.
Excellent post. Now re-consider everything you just wrote in today's global economy.

Also, you are correct, corporate taxes (ignoring global competition) don't impact the employees much but they sure do impact the purchasers.

Again, good post. +1
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