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You can say that again! Republicans in Michigan created a nonhomestead tax on Other People's Property and it's wildly popular. It is a local millage (replacing a portion of state school aid) which must be periodically renewed by voters and it usually passes by margins of 3-1 or better.
Homeowners sure know free money when they see it. Those Republicans sure know how to tax!
Its funny how people divide society according to their needs: aka "providers and recipients".
I know folks who see us as black and white people, those who have and have nots, Christians and atheists, yankees and southerners, citizens and illegal aliens, city dwellers and rednecks, conservatives and liberals, the obese and those in shape, creationists and evolutionists, pro life and pro choice, gay and straight.
I invite posters to pick the "correct division" as well as adding more categories. It can be fun.
Is that right? Will you please explain just how they do that? This I have to hear. All ears aned waiting.
In the meantime we will be providing for you.
That's easy:
Low-wage workers pay state and federal income taxes, as federal income taxes as well as most state income taxes kick in at incomes below the poverty line. A childless adult working full time at minimum wage pays $500/yr in federal income tax.
Low-wage workers also create profits for their employers and landlords - profits which are often taxes at the higher marginal rates (e.g. 28% and up). I had one minimum wage job where every employee was in the 10% marginal tax bracket, total payroll was under $500K, and our employer was making $3M annually and thus paying the top tax rate. If our wages had been higher, total tax revenue would have declined because our higher wages would have been taxed at 10% or 15% rather than the top rate our employer was paying.
Low-wage workers have lower marriage rates and shorter lifespans than those with higher incomes. This means we are more likely than others to pay into Social Security for decades without taking out what we paid in. Since we have lower marriage rates, we leave behind fewer eligible survivors to collect survivors' benefits. Think of it as upward redistribution to those who live longer and stay married.
State taxes tend to be regressive and this is where most of the upward redistribution occurs. Sales taxes kick in at the first dollar of spending and are flat. Income taxes often kick in well below the poverty line and often are flat or have middle/upper income tax breaks. Property taxes are often higher on rental property, which is where low-wage workers live. (e.g. Arizona taxes rents, Michigan has a nonhomestead tax, many other states have "split roll" property taxes where homeowners enjoy a preferential rate.)
Local housing and zoning regulations impose substantial costs on low-wage workers. Thomas Sowell brilliantly explained this upward redistribution in his 1981 book Markets and Minorities (Chapter 7). Since Sowell has tons of cred, you should believe him.
Employees provide labor. Customers provide money. Business owners receive the benefits
Sheesh! Employees get a check on payday--an even trade. Customers get the goods--an even trade. Business owners organize the whole mess, follow the regulations, file a ton of paperwork, provide jobs (an even trade) and goods (an even trade) and if the employees don't like it or the customers don't like it, they don't show up.
I'd make a slight revision to this. Actually I think there are 3 classes:
1)providers
2)recipients
3)siphons
Class 3 are those people who stand alongside that great river of cash flowing between 1 & 2, siphoning off 10, 20, or even as much as 80%, before letting the rest flow on it's way to #2. Class 3 would be basically politicians, bureaucrats, lobbyists, corporatists, etc. All those who tap into the gov't cash flow and take some out before it makes its way to the eventual end users.
So for food stamps:
1) Taxpayers are providers
2) Users are recipients
3) JP Morgan Chase is a siphon
And in turn the low-wage workers are provided for BY the other classes.
As in roads, schools, water, sewage police, firemen and every other thing they are involved in.
A childless adult working full time at minimum wage pays $500/yr federal income tax plus $1100 payroll taxes. Also pays state income taxes which usually kick in well below the poverty line, plus state sales taxes, plus property taxes embedded in rent. Many states tax rental property at higher rates than owner-occupied homes, so low-wage workers are paying a disproportionate share of property taxes, and thus may well be subsidizing local roads, schools, water, sewage, police, firemen, etc for homeowners.
For example, the school property tax rate on rental property in Michigan is 4 times the school property tax rate on owner-occupied homes.
I wonder how much the "provider class" will profit from the "recipient class" when it becomes a French Revoltion style "let them eat cake". The middle class; what is left of it; is bearing the brunt of the policies made by the upper class. Look at the numbers. We are forcing this country to a two layered system. It is the haves and the have-nots and it is a slippery slope.
Considering that's 10% of a minimum wage income with nothing to show for it and a good chance of never getting back one dime of it.
At least the middle class has something to show for it, e.g. mortgage interest deductions, capital gains exclusion on their home, and a sufficiently long lifespan to get back what they paid into Social Security and then some.
But they still receive much more back in dollars and services than they have ever paid in.
My father in law is 89 years old. He exceeded what he paid into SS about 16 years ago.
How is this sustainable?
Exactly. Social Security has lasted this long without yet imploding, funded by low-wage workers who paid in for decades without getting back a dime.
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