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Let's say the Federal Government cut Corporate Taxes to 0% and mandated a minimum wage of $24 per hour for large corporations and $15 per hour for small businesses. Both would increase with future inflation. Is this something that could potentially work? Keep in mind that the Corporate Tax would be cut to 0% so inflation would probably be minimal and other jobs would be created because there would be more money, etc.
It would most likely work but the oligarchy we now live in versus a true democracy would never allow for it. If and when the practice of employing CEOs and other top brass who feed at the trough of corporate profits becomes more restricted, there's a chance perhaps.
1. The corporate income tax can’t and won’t go away. That’s a non-starter. Not to mention, why in the hell would a reduction in one expense (taxes) result in another random expense increasing...just because. If the price of aluminum in my widget goes down and I have more money, does that mean I need to pay my employees more for the same production? No.
2. You can’t legislate labor to be ACTUALLY be more valuable. It will simply be eliminated, and the new minimum for those left behind will become zero.
3. Once people flipping burgers go from 8 to 24 an hour, when does my raise from 45 to 61 kick in? And what do you expect will happen to the quality of small business labor when I only get 15 an hour flipping burgers at joes local burger place...but McDonald’s has to pay 24 for the same burger flipper? Why do they have to pay more for the same value of labor? Your lust for the deep pocket syndrome?
Last edited by Thatsright19; 08-15-2018 at 07:09 AM..
This line of thinking is flawed, so here's a simple counterfactual to illustrate.
The current scenario:
ABC Company makes and sells its products with no cost of production except labor and they have a 20% tax rate and labor costs of 50% of revenues.
This is to point out that corporate interests do not benefit from this arrangement so how would there ever be support for it from the monied interests?
Not to mention it’s very punitive on certain industries
You take a company with fewer employees that may have higher average salaries like say Eli Lilly and compare that to a company with hundreds of thousands of low cost employees like a Walmart or a target. Service industry would be crushed whereas manufacturering may be largely untouched in certain industries. But then they still get the lowered taxes...
One gets punished on its labor cost much more steeply. So, in this bizarro world scenario you proposed, you’re not even always going after the bigger companies...you’re going after bigger companies in lower margin businesses that have a different business model.
Normally your ability to generate profits determines if your business model needs to be changed...but in your world you want to make an arbitrary decision that some business models of companies of an arbitrary size are no good.
Last edited by Thatsright19; 08-15-2018 at 08:14 AM..
Let's say the Federal Government cut Corporate Taxes to 0% and mandated a minimum wage of $24 per hour for large corporations and $15 per hour for small businesses. Both would increase with future inflation. Is this something that could potentially work? Keep in mind that the Corporate Tax would be cut to 0% so inflation would probably be minimal and other jobs would be created because there would be more money, etc.
Point of Failure:
I would place my business in CheapWorkeristan and sell to the rich US consumers, paying no tax in doing so.
To prevent that situation, you would need tariffs that adjust the price as high as the labor difference. By making labor even higher, the tariff amount would become obscene and trigger WTO issues, as well as driving up the price of inputs for domestic industries.
It's totally cool to think of ideas though. It's just a lot more nuanced in reality.
Shows how people have been brainwashed to think they only "make it' when their foot is on the neck of others. The Rat Race has hit it's perfect stride.....never did I imagine.
I made $5 an house at unskilled or slightly skilled labor in rural TN in 1974.
I made the same or more in NJ...in 1976.
Those wages, adjusted for basic inflation, would be $23 to $27 an hour today.
Yet people have been brainwashed...and, let's face, those doing the brainwashing are VERY rich people (Heritage, Cato, Kochs, Mercers and many others) to say that I must have become wealthy making that $5 an hour.
In fact, it was so little that I, a semi-skilled framing carpenter (by 76...in 74 I was not) that I stopped doing that particular subcontract work after one house.
Yet Americans are fine with someone making 1/3 that money and having to pee in a jar for the priv.
Is there anywhere it stops? No. I can answer that that. It doesn't. This is exactly why wages have gone nowhere in 40+ years.
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