y
Quote:
Originally Posted by FLgirl727
It stands to reason that any increase in income.... across the board, would result in an increase in revenue.
Could be why job creation was such a hot topic during this past election. Raising people's income from zero would also have resulted in an increase in tax revenue. Too bad the population didn't fall for that one.
|
Uh, it doesn't work that way. There are many facets of Economics that are counter-intuitive.
It might seem that raising tax rates increases tax revenues, or that raising wages increases tax revenues, but those actions do not operate in vacuum. You have to look at the entire whole.
Wages are determined by the Supply & Demand for a given skill-set in a give labor market. Each labor market is unique.
With respect to labor markets, or any market in the US, you can for the most part tie them to MSAs (Metropolitan Statistical Areas).
So, in the Los Angeles MSA -- a labor market -- Supply & Demand might say a warehouse worker gets $8.50/hour while in another market, say the Baton Rouge MSA, Supply & Demand says a warehouse worker gets $15/hour.
If you try to force wages for warehouse workers in Los Angeles to $15/hour to match those in Baton Rouge, you will fail...you will lose both tax revenues and jobs and then end up spending money to support the job losers.
Economically...
Mircea
Quote:
Originally Posted by jackmccullough
People misspeak all the time and it generally doesn't mean anything.
|
Right. When Rumsfeld said Flight 93 was shot down, it was just a Freudian Slip. He was merely fantasizing about Flight 93 being shot down by an AIM-9G fired from an F-16 that just happened to knock the port engine off of its struts, causing Flight 93 to crash in the manner that it did.
Quote:
Originally Posted by jackmccullough
Raising the minimum wage probably won't raise tax revenue that much because minimum wage workers pay the lowest income tax rates.
|
That, plus the fact that they get a free tax payer gift in the form of EITC -- so not only do they not pay taxes, they bleed America dry.
Quote:
Originally Posted by jackmccullough
As for raising the retirement age, that probably remains to be seen. There are a couple of points:
1. We're already in the middle of a process of gradually raising the age to full Social Security retirement eligibility.
|
I'm not sure how you could draw that conclusion, unless you're referring to the Boomer Cohorts that have full-retirement step-increased at two month intervals from 66 years to 67 years.
Quote:
Originally Posted by jackmccullough
2. It may be a zero-sum game because raising the retirement age may be keeping older people in jobs that would otherwise be filled by younger people, and who have no employment process if those jobs are "blocked".
|
It is not a zero-sum game. You lose. Raising the full-retirement age only results in people retiring early between 58-65 years on Social Security Disability --- in which case they draw 100% of their benefits instead of a reduced benefit rate.
Quote:
Originally Posted by jackmccullough
As the economy improves and more people get back to work, companies will see that they have higher demand for their goods and services. That will lead them to produce more, which will lead them to need to hire more workers, those workers will have more money to spend, and the economy will improve, aggregate demand will increase, employment will increase, tax revenue will increase, and social benefit expenditures will decrease.
Keynes and Krugman are right, the Republicans and Europeans are wrong.
|
Krugman is wrong.
Your unemployment problems are not caused by a lack of demand.
Your unemployment problems are the result of surplus/excess labor.
Those workers who compete in the global economy are not competitive, due to the fact that there is a huge disparity between the wages of American workers and foreign workers.
That resulted in massive job losses, which then put downward pressure on wages. The net effect is that US global workers are being hired into non-global jobs that pay less, causing a reduction in household wages. That has been the general trend in the US since the mid 1990s.
You can see that here....
National Average Wage Index
1951-1960: 4.09%
1961-1970: 4.45%
1971-1980: 7.31%
1981-1990: 5.34%
1991-2000: 4.35%
2001-2010: 2.64%
You can also see it here....
1990 $37,655
..... -0.72%
1991 $36,847
..... -2.15%
1992 $37,900
..... 2.86%
1993 $37,602
..... -0.79%
1994 $37,926
..... 0.86%
1995 $38,259
..... 0.88%
1996 $38,503
..... 0.64%
1997 $39,600
..... 2.85%
1998 $41,073
..... 3.72%
1999 $42,027
..... 2.32%
2000 $43,066
..... 2.47%
2001 $42,609
..... -1.06%
2002 $41,952
..... -1.54%
2003 $41,718
..... -0.56%
2004 $42,425
..... 1.70%
2005 $42,296
..... -0.31%
2006 $42,206
..... -0.21%
2007 $42,430
..... 0.53%
2008 $41,773
..... -1.55%
Average wage/salary per tax return filed.
The driving force in your Depression-era was surplus/excess labor.
The cause of the surplus/excess labor was the electromechanical revolution, combined with new innovations in manufacturing processes, such as the assembly line method and labor improvements such as increasing the amount of foot-candles per square foot in office and manufacturing facilities.
That increased production and efficiency, resulting in excess labor. That caused the 1925 Recession which led to the bust of the housing bubble, which in turn led to the 1928 Recession, which in turn led to the 1930 Recession -- that, and then errors made by both the Federal Reserve and government exacerbated the situation.
It was WW II that absorbed your surplus/excess labor, and at the end of the war, you went right back into the 1946 Recession.
What absorbed that surplus/excess labor was the Marshall Plan, the Bretton Woods Agreement, and the fact that the US was the only country with high manufacturing capacity that hadn't been devastated by the war. Your very bad foreign policy -- which is coming back to bite you in the ass now -- did the rest.
Your present recessionary state is also caused by surplus/excess labor.
Once Millennium Fever/Y2K ended, you started having surplus/excess labor pile up; it continued as jobs naturally left the US because of the huge wage disparity, and it continues now.
Your surplus/excess labor caused your housing bubble to collapse in 2005, just like it did in 1925.
As development continues in the world, and as it spreads from China/India to Central Asia then to sub-Saharan Africa, you will continue to build surplus/excess labor, since Americans cannot compete globally.
As far as higher demand, that goes right out the window when you end the FICA payroll tax holiday and the FICA tax rate goes back to 6.2%; it will end when you raise HI (Medicare) taxes to 3.12%; if you don't raise Medicare taxes, then the cuts to Medicare will have the same effect; and then you have to raise FICA from 6.2% to at least 7.5% immediately --- even though it should be 9.0%-9.5% and then you'll have to step-increase the FICA tax rate annually by 0.5%-0.6% each year through 2025, but then I'm just assuming you want to keep Social Security and not abandon it.
And then of course Obamacare will redirect cash Capital from all sectors of your economy into the health care sector, which is a dead end.
Watch what happens...
Mircea
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
