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Old 05-14-2018, 10:18 PM
 
Location: NYC
11,821 posts, read 7,695,291 times
Reputation: 12814

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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
Depends how big you are, any business less than 2,000 are paying their share or get nailed by the IRS. When you are as big as Apple, Google, or Facebook. The IRS has a honor system with these companies they take what they can get from them.

When you see the state dept years ago warned the EU not to tax Apple or Google for hiding the tax shelter in Ireland you know who's side the government works for.
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Old 05-14-2018, 10:29 PM
 
1,025 posts, read 559,196 times
Reputation: 300
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.
wutitiz, I disagree with your post. The portion of FICA payroll tax levied upon employees is certainly paid by those employees and are not passed on to anyone;(although some of us can conceive portions of it actually being passed on to the employees' dependents).

Generally, an enterprises “normal” expenses are passed on to their customers. Wages, (a normal business expense) is not “passed on” to their employees, they were “earned” by their employees, and that includes employees paid on a commission basis.
The consequences of enterprises' attempts to pass on extraordinary expenses are usually to the enterprise's competitive disadvantage. The FICA payroll tax levied upon employers is a normal commercial enterprise expense.

Enterprises sometimes do attempt to reduce portions of their expenses that they pass on to customers in order to gain some competitive advantage or to defray some other of the enterprise's deficits or to accept lesser profit margins. Lesser profit margins are the rationale upon which many enterprises justify describing their businesses model as “discount pricing”.

Commercial enterprises do not generally operate as altruistic organizations. Increased or reduction of commercial enterprises taxes do not generally affect their wage scale policies, although enterprise management would prefer that their employees and voters would believe such a nonsensical story.

Respectfully, Supposn
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Old 05-15-2018, 05:23 AM
 
6,166 posts, read 3,251,225 times
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The corporations and companies and the wealthy just got an historically HUGE tax cut. Programs are being cut, departments and agencies' budgets are being slashed, in order to transfer that money to those tax cut beneficiaries. Some companies started seeing the benefits in 2017, although the tax bill takes full effect in 2018, and continues to GROW (only for the wealthy) for a decade.

Raise your hand if you got a big wage increase because your employer is getting a windfall of money that will continue to pour down for the foreseeable future!

Of course not. Your wages aren't increased because your boss has more money in his pocket. Your wages are dictated by the market, and how much it takes to keep you (if they care if you stay), as well as local factors. But your wages are not dictated by how much money your boss has in his pocket at any given moment, whether from increased sales or a tax cut or decreased health insurance premiums.

A few, a very few, companies, gave a one-time bonus to employees to celebrate the tax cut the companies are getting. But for the most part...no. The tax cut = more profit for the company. They don't raise wages or create jobs from it. Taxe are not materially related to the business reasons to add jobs or raise wages. In fact, cutting taxes, if it means cutting services, can cut down on the business for some companies, resulting in job losses.

If you cut funding that affects a local school or hospital, that facility may close. Then that means all the employees at those facilities who live in that area may move to be near their new employer, if and when they find one. That means that area businesses will suffer. The area businesses...the ones with the tax cut money in their pockets. Ask them then whether they'd have that wad of cash or whether they'd like all those customers back. The area businesses then have to start laying off. This is what just happened in Kansas, after Republican Brownback pushed big tax cuts there. It decimated their economy. After Brownback left, the state had to raise taxes again to get the economy back on track.

No...businesses don't add to jobs or wages because they have more money in their pockets, whether from tax cuts or because toilet paper prices decreased. Those things are dictated by the market and the economy.
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Old 05-18-2018, 04:13 PM
 
Location: Old Bellevue, WA
18,794 posts, read 13,579,606 times
Reputation: 7921
Quote:
Originally Posted by oceangaia View Post
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.
(emphasis added).

Salary competition is price competition--salary is just the price of labor.


One thing I think many get jumbled over is the difference between market changes over time and a 'one fell swoop' fiat rule from government.


Market changes such as the pension issue mentioned by someone, or the emergence of new business models like Walmart and Amazon are in the former category, while the 6.2% SS contribution is in the latter.


Again, suppose Joe Clerk and Joe Boss have decided that his labor is worth $10/hour, and have agreed to that price. Then Joe Politico comes along and says 62 cents of that $10 must be sent to Washington DC. The value of Joe Clerk's labor has not changed. Joe Boss is not going to be willing to pay an additional 62 cents for it. Otherwise why would not Joe Clerk have already marched in and demanded 62 cents more prior to the 62 cent diversion? Joe must take a 62 cent pay cut to $9.38, or seek a new job.


By the same token, suppose that the next year, Joe Politico decides to drop the diversion. Joe Clerk's labor is still worth $10, so he will get a 62 cent raise. Otherwise the employer across the street will notice that Joe Boss is getting $10 worth of labor for $9.38 of pay. In other words he's getting 62 cents of free labor. So the guy across the street offers to drop that to 31 cents of free labor. He's still getting a bargain. And then the boss down the street offers 10 cents...and so on, until the full 62 cents is back in Joe Clerks pocket.
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Old 05-18-2018, 06:01 PM
 
7,045 posts, read 3,701,331 times
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Quote:
Originally Posted by wutitiz View Post
(emphasis added).

Salary competition is price competition--salary is just the price of labor.

Again, suppose Joe Clerk and Joe Boss have decided that his labor is worth $10/hour, and have agreed to that price. Then Joe Politico comes along and says 62 cents of that $10 must be sent to Washington DC. The value of Joe Clerk's labor has not changed. Joe Boss is not going to be willing to pay an additional 62 cents for it. Otherwise why would not Joe Clerk have already marched in and demanded 62 cents more prior to the 62 cent diversion? Joe must take a 62 cent pay cut to $9.38, or seek a new job.

By the same token, suppose that the next year, Joe Politico decides to drop the diversion. Joe Clerk's labor is still worth $10, so he will get a 62 cent raise. Otherwise the employer across the street will notice that Joe Boss is getting $10 worth of labor for $9.38 of pay. In other words he's getting 62 cents of free labor. So the guy across the street offers to drop that to 31 cents of free labor. He's still getting a bargain. And then the boss down the street offers 10 cents...and so on, until the full 62 cents is back in Joe Clerks pocket.

Don't play dumb. You know I'm talking about end consumer market price.


And no, you're just flat out wrong in your examples. That's not how it works in the real world. Else the recent tax cuts to businesses would have resulted in lots of big pay increases.
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Old 05-18-2018, 06:25 PM
 
Location: Old Bellevue, WA
18,794 posts, read 13,579,606 times
Reputation: 7921
Quote:
Originally Posted by oceangaia View Post
Don't play dumb. You know I'm talking about end consumer market price.


And no, you're just flat out wrong in your examples. That's not how it works in the real world. Else the recent tax cuts to businesses would have resulted in lots of big pay increases.
How is quoting your exact words 'playing dumb?' The Trump tax cuts were not of a payroll tax, so that is a different topic. I just refer you back to post #1 and the quote from the CBO. We can go around and around on this, and clearly will never get anywhere, but do you seriously want to disagree with the CBO and their army of econ PhDs?


Here is another piece I ran across on payroll taxes.
https://taxfoundation.org/what-are-p...who-pays-them/


Quote:
Who Really Pays Payroll Taxes?

Perhaps one of the best-kept secrets of payroll taxes is that employees effectively pay almost the entire payroll tax, instead of splitting the burden with their employers.
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Old 05-18-2018, 08:24 PM
 
10,265 posts, read 6,495,798 times
Reputation: 10837
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.
I don't get what you mean. You get a salary and your share is taken out from your paycheck and the owner puts in their share or do you mean something different?
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Old 05-18-2018, 10:54 PM
 
5,221 posts, read 2,377,031 times
Reputation: 5111
Quote:
Originally Posted by greywar View Post
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.
Everyone, rich and poor, pays the same rate on the same type and quantity of income.
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Old 05-19-2018, 06:40 AM
 
2,240 posts, read 1,386,969 times
Reputation: 4894
Quote:
Originally Posted by wutitiz View Post
How is quoting your exact words 'playing dumb?' The Trump tax cuts were not of a payroll tax, so that is a different topic. I just refer you back to post #1 and the quote from the CBO. We can go around and around on this, and clearly will never get anywhere, but do you seriously want to disagree with the CBO and their army of econ PhDs?


Here is another piece I ran across on payroll taxes.
https://taxfoundation.org/what-are-p...who-pays-them/
Go ahead and take a tax deduction on both sides of the payroll taxes you’re allegedly paying and see where that gets you.
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Old 05-19-2018, 10:28 AM
 
Location: Myrtle Creek, Oregon
11,047 posts, read 11,455,634 times
Reputation: 17205
Quote:
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.
It also means that my income would skyrocket, since I could just rob banks and nobody would stop me. I could also move into a much nicer house, just by killing the occupants and taking it. Darn those taxes anyway.
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