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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...
This may be about one of the most senseless posts I have read in a long time. LOL
Tax cuts do not raise the costs of goods like raising the minimum wage would. If anything it lowers them and you the consumer have more money in your pocket to buy those goods.
If you need any further explanation beyond that I can't be of any help.
Tax cuts do not raise the costs of goods like raising the minimum wage would. If anything it lowers them.
Not sure how it will pay off in reality given many variables in play, but from a pure economic theory standpoint on perspective of the demand side, I think you have it wrong.
The tax cut and wage increase both behave the same; they both boost your take-home income. Economic theory says that with more disposable income, people should spend more on goods and services, ie demand should go up. And if demand goes up, then absent other changes in supply, equilibrium prices should go up.
It's intuitive. If you are selling popcorn and ten people demand your product, you might sell it for X price per bag. Now of suddenly fifty people are demanding your product and your supply is the same, are you going to charge the same, more, or less per bag? If you're a profit-maximizing market agent, you'll charge more.
Again, who knows how it will play out in reality. You also have Fed rate activity, changes in supply (they're also getting tax cuts), external shocks to the economy, changes in population, price elasticity and substitution for various goods, etc. Lots of interdependent variables changing. But the market economics theory is clear on this from the consumer side.
This may be about one of the most senseless posts I have read in a long time. LOL
Tax cuts do not raise the costs of goods like raising the minimum wage would. If anything it lowers them and you the consumer have more money in your pocket to buy those goods.
If you need any further explanation beyond that I can't be of any help.
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.
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...
The left really does not have a grasp of economics or even math, do they?
You obviously don't realize that wages are paid by businesses, and that wages are a part of every product or service that they offer. And businesses (unlike government) can not (long term anyway) spend more than they bring in. An increase in their costs (wages) drives an increase in prices.
A cut in personal income taxes has no impact on the business that pays that wage. The wage and the business cost are unchanged.
There MIGHT be an increase in prices due to inflation, driven by extra cash in the hands of consumers driving demand. But that, in turn, may be more than offset by the reduced taxes those businesses pay.
Some days all I can do is shake my head and wonder just what we as taxpayers are getting for all that money we spend on education children...
Wage increase = "company" outlaying more money = product price goes up to cover that higher outlay (else they simply go out of business).
Tax credits = "Gov" taking in less money = no direct involvement with any product at all...
There's more complexity, such as how the tax changes impact businesses, and that could very well lead to product pricing increases, but the OP question was in Kindergarten terms, so they should suffice for explanation too.
We kept hearing from you guys that one off the reasons we couldn't give min wage hikes is because it would cause inflation
I actually never heard that one.
What they were suggesting was that raising the min wage would artificially compress the range of wages, to the point where a barista was earning nearly as much as a professional job or a managerial role.
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...
I am not sure what you are rattling about, could you explain? Will there be an increase in inflation? Maybe but that is going to happen one or the other. Inflation has been low for too long, it is bound to increase regardless of tax cuts. Not to mention an increase in the GDP would be a positive.
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