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Old 06-19-2018, 04:59 AM
 
1,025 posts, read 559,196 times
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Quote:
Originally Posted by Led Zeppelin View Post
Not quite. If you worked full time earning $7.25 per hour for the whole year, your taxes would be around 12% of your $15K annual income. Payroll taxes are taxes imposed on employers or employees and are usually calculated as a percentage of the salaries that employers pay their staff. Payroll taxes generally fall into two categories: deductions from an employee's wages, and taxes paid by the employer based on the employee's wages.

Ask somebody working for tips and getting paid about 2.15 an hour if they pay taxes. ...
Led Zeppelin and Larry Siegel, refer to post #18. Bottom line: if enterprises taxes were reduced, they would continue paying no more than they consider as necessary to recruit and retain the quality of labor they're willing to accept.
Due to the minimum wage laws and the concept of wage differentials, enterprises (in aggregate), can pass only extremely small proportions of their expenses onto employees or to any other providers of goods and services their enterprises require.
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Old 06-19-2018, 05:16 AM
 
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Quote:
Originally Posted by bobsell View Post
Minimum wage employees pay social security and Medicare taxes. So yes, taxes are passed on to employees.
BobSell, we're discussing the question of enterprises passing THEIR taxes and other expenses onto employees.

[You may find the 1st post of the thread:
FICA is a regressive tax. of interest.

If we eliminated half of FICA earmarked for Social Security, and the entire Medicare portion of FICA, (it would reduce both enterprises and employees taxes by 4.55% of payroll). If we replaced the lost revenues with a 4.55% federal sales tax, it would be of slight net revenue gain to the working poor and increase net tax revenues for Social Security, and Medicare.]
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Old 06-19-2018, 08:31 AM
 
Location: Copenhagen, Denmark
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Excise taxes are definitely passed onto consumers. The % depends on the own price elasticity of demand.
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Old 06-19-2018, 08:40 AM
 
5,221 posts, read 2,377,031 times
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Quote:
Originally Posted by Supposn View Post
TaxPhd, excerpted from the post you quoted: A substantial portion of most enterprises labor costs are covered by minimum-rate laws and cannot be reduced. Due to the concept of wage differentials, it is less feasible for enterprises to reduce their labor costs that are beyond mandated minimum rates.
Thus, enterprises can pass on extremely small portions of their expenses on to employees. ...

You didn't read, or simply do not agree with that?

The federal minimum wage rate doesn't affect all wage scales equally, but it does affect all USA wage scales. Half of a $14.50/Hr wages can't be legally reduced, and the enterprise did not altruistically choose to pay that much, but due to the concept of wage differentials, the enterprise considered themselves to be compelled to pay that level of wage in order to recruit and retain that particular quality of labor.

If enterprises shop for cheaper supplies without sufficient regard for quality, they're likely to purchase very expensive bargains that cost them more than the price reduction's worth. It's not fully the same, but there are unintended costs due to attempting to use lesser qualified or motivated labor.

I read it, and I addressed it in my point #2 that you quoted. Perhaps you ought to read it again. . .
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Old 06-19-2018, 07:33 PM
 
Location: Ohio
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Quote:
Originally Posted by Supposn View Post
If we eliminated half of FICA earmarked for Social Security, and the entire Medicare portion of FICA, (it would reduce both enterprises and employees taxes by 4.55% of payroll). If we replaced the lost revenues with a 4.55% federal sales tax, it would be of slight net revenue gain to the working poor and increase net tax revenues for Social Security, and Medicare.]
It would not increase net tax revenues for Social Security and Medicare.

There's a reason why the US government chose a payroll tax instead of a sales tax to fund both Social Security and later Medicare, and that reason is a payroll tax affects one and only one component of production, and that is labor cost.

And, yes, both approaches were examined intensively.

A sales tax on finished goods only would not generate sufficient revenues, while a sales tax on all intermediate and transitional stages would result in prices increases, reducing overall sales and the revenues generated.

Increased prices on durable good like autos, result in consumers delaying purchases, resulting in lay-offs by auto-makers, and then subsequent lay-offs by parts manufacturers and suppliers, and then lay-offs by ancillary businesses that provide support.

Quote:
Originally Posted by Supposn View Post
The federal minimum wage rate doesn't affect all wage scales equally, but it does affect all USA wage scales.
No, it doesn't, since the Cost-of-Living varies dramatically from location to location across the country. Federal minimum wage increases have no effect on higher wage earners in low Cost-of-Living areas.

Quote:
Originally Posted by hitpausebutton2 View Post
Like i said some taxes are to be eaten up by the business, not for the consumer.
Businesses do not eat taxes. All taxes are passed onto consumers. Some businesses will eat temporary cost increases over the short term, perhaps one or two quarters, before passing those costs onto consumers. Such was the case when gasoline prices continued climbing to reach $4.00/gallon. Federal carriers absorbed the costs for a few quarters, before levying fuel surcharges and other fees to recover costs onto wholesalers and distributors, who passed the costs onto retailers, who raised prices on consumers.

The inability of a business to pass the costs of taxes onto consumers, passes the cost onto employees in the form of reduced wage increases or reduced benefits, or not extending additional benefits, and often by reducing the starting wages for new hires.
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Old 06-19-2018, 08:36 PM
 
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Quote:
Originally Posted by Mircea View Post
It would not increase net tax revenues for Social Security and Medicare.

There's a reason why the US government chose a payroll tax instead of a sales tax to fund both Social Security and later Medicare, and that reason is a payroll tax affects one and only one component of production, and that is labor cost.

And, yes, both approaches were examined intensively.

A sales tax on finished goods only would not generate sufficient revenues, while a sales tax on all intermediate and transitional stages would result in prices increases, reducing overall sales and the revenues generated.

Increased prices on durable good like autos, result in consumers delaying purchases, resulting in lay-offs by auto-makers, and then subsequent lay-offs by parts manufacturers and suppliers, and then lay-offs by ancillary businesses that provide support. ...
Mircea, USA's entire payrolls are less than half of the entire sales volumes that could be applicable to a general sales tax.
Thus, we could reduce the SECA and FICA payroll taxes from 15.3% to 6.2%, replacing lost revenues with a 4.55% general sales tax. That's an extremely slight reduction of net direct and indirect FICA now paid by employees; this assumes employees entire employment incomes as being subject to the general sales tax).

The 4.55% reduction of payrolls levied upon enterprise's, would be for most enterprises, a far greater than a 5% reduction of their corporate income tax rate. That reduction of costs will be reflected in reduced prices of their products.
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Old 06-19-2018, 08:55 PM
 
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Originally Posted by Supposn:
The federal minimum wage rate doesn't affect all wage scales equally, but it does affect all USA wage scales.
Quote:
Originally Posted by Mircea View Post
...No, it doesn't, since the Cost-of-Living varies dramatically from location to location across the country. Federal minimum wage increases have no effect on higher wage earners in low Cost-of-Living areas. ...
The federal minimum wage rate affects all USA wage scales and the concept of wage differentials is no less valid within our lower wage rate states.
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Old 06-19-2018, 09:34 PM
 
1,025 posts, read 559,196 times
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Quote:
Originally Posted by Mircea View Post
...Businesses do not eat taxes. All taxes are passed onto consumers. Some businesses will eat temporary cost increases over the short term, perhaps one or two quarters, before passing those costs onto consumers. Such was the case when gasoline prices continued climbing to reach $4.00/gallon. Federal carriers absorbed the costs for a few quarters, before levying fuel surcharges and other fees to recover costs onto wholesalers and distributors, who passed the costs onto retailers, who raised prices on consumers.

The inability of a business to pass the costs of taxes onto consumers, passes the cost onto employees in the form of reduced wage increases or reduced benefits, or not extending additional benefits, and often by reducing the starting wages for new hires.
Mircea, A substantial portion of most enterprises labor costs are covered by minimum wage rate laws and cannot be reduced.
Due to the concept of wage differentials, it is less feasible for enterprises to reduce their labor costs that are beyond mandated minimum rates. Enterprise considered themselves compelled to pay the wage scales they determined to be required in order to recruit and retain particular quality of labor. Thus, enterprises can (in aggregate), pass on extremely small portions of their expenses on to lower-wage employees. For many, if not most enterprises, lower-wage employees comprise the majority of payroll costs.

If enterprises shop for cheaper supplies without sufficient regard for quality, they're likely to purchase very expensive bargains that cost them more than the price reduction's worth. It's not fully the same, but there are unintended costs due to attempting to use lesser qualified or motivated labor.

Enterprises certainly prefer to pass on all of their expenses, but due to legal and competitive restrictions, their preferences are not always satisfied.
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Old 06-21-2018, 10:14 AM
 
2,360 posts, read 1,027,668 times
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Quote:
Originally Posted by Mircea View Post
It would not increase net tax revenues for Social Security and Medicare.

There's a reason why the US government chose a payroll tax instead of a sales tax to fund both Social Security and later Medicare, and that reason is a payroll tax affects one and only one component of production, and that is labor cost.

And, yes, both approaches were examined intensively.

A sales tax on finished goods only would not generate sufficient revenues, while a sales tax on all intermediate and transitional stages would result in prices increases, reducing overall sales and the revenues generated.

Increased prices on durable good like autos, result in consumers delaying purchases, resulting in lay-offs by auto-makers, and then subsequent lay-offs by parts manufacturers and suppliers, and then lay-offs by ancillary businesses that provide support.



No, it doesn't, since the Cost-of-Living varies dramatically from location to location across the country. Federal minimum wage increases have no effect on higher wage earners in low Cost-of-Living areas.



Businesses do not eat taxes. All taxes are passed onto consumers. Some businesses will eat temporary cost increases over the short term, perhaps one or two quarters, before passing those costs onto consumers. Such was the case when gasoline prices continued climbing to reach $4.00/gallon. Federal carriers absorbed the costs for a few quarters, before levying fuel surcharges and other fees to recover costs onto wholesalers and distributors, who passed the costs onto retailers, who raised prices on consumers.

The inability of a business to pass the costs of taxes onto consumers, passes the cost onto employees in the form of reduced wage increases or reduced benefits, or not extending additional benefits, and often by reducing the starting wages for new hires.
We all knew they wont dip into their profit margin.. i mean come on.. it not going to kill your business to eat least 10-20% of it when your banking millions. After everything is said and done.
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Old 06-24-2018, 05:43 PM
 
4,383 posts, read 8,678,519 times
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Quote:
Originally Posted by Supposn View Post
Mircea, A substantial portion of most enterprises labor costs are covered by minimum wage rate laws and cannot be reduced.
Due to the concept of wage differentials, it is less feasible for enterprises to reduce their labor costs that are beyond mandated minimum rates. Enterprise considered themselves compelled to pay the wage scales they determined to be required in order to recruit and retain particular quality of labor. Thus, enterprises can (in aggregate), pass on extremely small portions of their expenses on to lower-wage employees. For many, if not most enterprises, lower-wage employees comprise the majority of payroll costs.

If enterprises shop for cheaper supplies without sufficient regard for quality, they're likely to purchase very expensive bargains that cost them more than the price reduction's worth. It's not fully the same, but there are unintended costs due to attempting to use lesser qualified or motivated labor.

Enterprises certainly prefer to pass on all of their expenses, but due to legal and competitive restrictions, their preferences are not always satisfied.
This is what you have wrong, that statement is just not true as has been pointed out many times. Most labor in the USA is not covered by minimum wage laws. A very small portion is.
As noted taxes are shared by three groups, customers, employees and owners. The ability of the business owner to pass on his cost increase to his worker is determined on by the scarcity of the worker's skill, if the skill is scarce the cost the majority of the burden will not be borne by the worker, if it is then it will be. Because if the worker does not have a scarce skill and the employer decides to pass on the cost to the worker, his risk will not be large because if the worker leaves, he can hire someone else from a large pool of workers.
And of course in some times, all labor will be relatively scarce, and in that case the burden will not be borne by the worker at all.
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