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The narrative from conservatives is that if people have more money in their pocket prices will go up.
I'm sure what this would be so difficult to understand. If you increase the minimum wage the expense to the company making that product has increased and the profit margin has decreased if they sell it at the same price point. The likely scenario is they will increase the price. This has absolutely nothing to do with how much money the employee has in their pocket and that increase they have seen is going to be sucked up by higher prices.
If you decrease taxes on a business the profit margin on their product increases. That may choose to pocket that money, invest it in their business or decrease the cost of their product.
you are confused. tax cutting does not have a deflationary effect. In fact it is hard to understand why you would even think it would.
What I said was....
Quote:
Tax cuts do not raise the costs of goods like raising the minimum wage would. If anything it lowers them
That doesn't mean it will lower them, what happens with the cost of goods largely depends on what the company decides to do with it. If they are involved in highly competitive market you can expect them to go down. If they are looking to expand they will reinvest it. If they are in good position they may decide to pass it on the stockholders.
That doesn't mean it will lower them, what happens with the cost of goods largely depends on what the company decides to do with it. If they are involved in highly competitive market you can expect them to go down. If they are looking to expand they will reinvest it. If they are in good position they may decide to pass it on the stockholders.
That is simultaneously true with minimum wage, it strongly depends on the good or service. Your theory is correct in some cases, but in terms of inflation, the aggregate effect of a minimum hike is pretty negligible. Inflation rates typically don't rise after minimum wage increases, and economists know this after looking at decades of macro data. Probably because modest wage hikes aren't the doomsday scenario some claim.
Do minimum wage hikes cause job loss, theoretically yes - but there are a lot of confounding variables at play. For one, the empirical data suggests that the supply of labor is more inelastic that was traditionally thought, even in the face of technological advancement. Two, it strongly depends on the strength of the local economy. A city like Seattle can probably absorb a minimum wage handily and still see robust job growth in the low wage industries. For a city like Akron or Gary, minimum wage hikes may be counterintuitive considering COL.
We kept hearing from you guys that one off the reasons we couldn't give min wage hikes is because it would cause inflation... All that extra money you gave the poor wouldn't matter because goods would increase in price to offset the raises...
So what happened? Help us understand Conservative economics where extra money in the hands of a lot of workers causes inflation when it comes from wage increases, but not when it comes from tax cuts...
well since the corporations pass their taxes on to the consumer...we actually could see prices come down
well since the corporations pass their taxes on to the consumer...we actually could see prices come down
so ends the thread
Corporate profits are at record high, they're not passing anything on to the consumer. Prices won't go down if you lower corporate tax rates, I can guarantee that.
Corporate profits are at record high, they're not passing anything on to the consumer. Prices won't go down if you lower corporate tax rates, I can guarantee that.
oh really......
THEN WHY are liberals constantly saying, that if we go to singlepayer , taking the health insurance bill off employers, that everyone will get massive raises???
THEN WHY are liberals constantly saying, that if we go to singlepayer , taking the health insurance bill off employers, that everyone will get massive raises???
Probably because corporations aren't the only employers. The argument that prices are high because corporations aren't making enough money makes zero sense.
The narrative from conservatives is that if people have more money in their pocket prices will go up. Why isn't this true for tax cuts? Or else it's just another lie from the right.
This thread is just more proof that liberals still don't grasp the difference between income earned and income given by the state.
Have you seen who is getting the tax cuts? Of course not, why bother knowing anything about the topic. The people making minimum wage aren't going to be seeing any tax cuts, even though the left tries it's hard to pay less than zero taxes. Someone making $100,000 a year getting to keep more of what he/she earned isn't going to make the price of hamburgers go up like government forcing a business to pay someone more than they're worth to make that burger.
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