Creating Fair Taxation

Why should they? Here are the unemployment numbers for New York and California: 472,607 and 1,053,000.

the right is simply cognitively dissonant about the "facts of life".

 

That is true but often the compensation for the labor in wages and benefits doesn't fully fund the costs of the individual in providing that labor. The person providing the labor has mandatory expenditures for shelter (housing), energy, food, clothing, transportation, medical services, etc. and if the compensation isn't enough to provide for these expenditures then the person is operating at a loss.

To demonstrate this let's assume you're a painting contractor and you sell your services "by-the-hour" plus materials and your painter receives $30/hr can you afford to sell your painting service for only $20/hr? Of course not because your mandatory cost in providing the labor is greater than the revenue you receive from that labor. A person also has mandatory costs that they must fund with their labor but they often don't receive enough in compensation to fully fund the costs (which drives the necessity for government welfare assistance to fund those mandatory expenditures).

We can refer to the MIT Living Wage Calculator that has quantified the minimum (mandatory) costs of living for different households throughout the United States to understand the scope of the problem. The Living Wage Calculator requires the selection of a state and county so I'm going to select Los Angeles county in California because I grew up there.

http://livingwage.mit.edu/counties/06037

If I happened to be a married man with one infant child that my wife was raising at home I'd require $49,964 in income from my employment just to meet the minimum/mandatory costs of my household. That's basically $24/hr for a full 2,080 hour work-year. If both my wife and I happened to be working then we'd have to earn $58,265 combined or $29,132.50 each so each of us would need to be earning at least $14/hr.

There are millions of jobs out there that don't even meet this minimum wage requirement and anyone stuck in one of these jobs is "operating at a loss" and cannot be expected to survive for long on that compensation.

But this is a tax proposal and not an income proposal. I've addressed this simply by creating the "Household Exemption" so that the person/household typically isn't taxed on income necessary for their minimum/mandatory expenditures. Driving someone that's already operating at a loss into even losing more with another mandatory expense makes no sense at all. We don't require a business to pay taxes if it's losing money so why would we require a person/household to pay taxes if they're losing money?

 

They shouldn't.

The New York Times is one of many New York papers, and 472,607 - 176,116 would reduce unemployment to 296,491.

While facts are facts, there is nothing cognitively dissonant about examining the underlying factual causes on a case by case basis which may differ greatly while leading one to claim a resultant singular fact.

 

capitalism's natural rate of unemployment is a fact of capital life that the right seems to ignore.

 

When all available jobs are filled the number of those who remain unemployed would represent a true natural rate of unemployment for that instance of time. A figure of 5% or 5.3% is simply an arbitrary number which government has led us to believe to be acceptable by maintaining it.

 

Why do we have so many numbers, but only an official number that is more political than economical.

 

That is precisely equivalent to claiming all food is the same because it all comes out as $#!+.

Try again.

 

Sure. Any company always has an opening for a salesman who can bring in revenue of $100X in return for a salary of $X.

And this is supposed to mean what, exactly?

 

That is a non sequitur.

I'm speaking of fact, not legality.

No, it's just a thing you have to pretend not to know about.

No, they are just a thing that yields facts that prove you wrong.

False. I have been very clear, and the context is the income tax system.

Incorrect. Some of the second type are highly productive and earn enough to afford yachts and airplanes. I've known a few -- a very few.

Bid up the prices of each other's rent-seeking privileges.

So, explain for me again why we extend favorable tax treatment to them when they DESTROY jobs and health security for the second.

Now that really is gibberish. As is:

Wrong again. Google, "Pigovian tax" and start reading.

Panama Papers. 'Nuff said.

 

Numbers are infinite. People, current voters and future voters, tend to be more responsive to numbers which impose little or nothing upon them and/or reward them.

It's true, a dollar is a dollar, but by taxing based on the source of the dollar government is more able to micromanage the economy, to the benefit of some while to the detriment of others with the primary objective of a producing greater revenues to the government.

Obviously you're claiming that ALL job ads are for salesmen, but are they really?

 

Workers are compensated for the value of the work they perform. Should employers pay single persons less than a married person with 3 children since their necessary expenditures are much different?

 

No. It is a response to a false dichotomy...that you created. Do you care to prove your false dichotomy?

No, that's what's funny...you're speaking of abstract unempirical ideals. There is no measurement of a moral statistical fact. But you believe it should propagate the value of an autonomous human being to society....and be legally binding? Don't take money that doesn't belong to you, Bro. Not without disclosing what it will pay for...in actuality.

You're not capable of managing policy for a modern nation. Even Putin would shake his head at you.

You don't have to pretend my friend.

https://en.wikipedia.org/wiki/Hall%E2%80%93Rabushka_flat_tax[/QUOTE]

But you only care about the "income tax" system? What about capital gains, or carried interest, or a national VAT tax, or the IRS? This plan would eliminate the need for deductions and income tax credit. Both terrible levers of power for people who don't really care about outcomes.

So you think the whole government system is powered by people who get back tax refunds? Today. Those people already get a negative tax payment. So what are you arguing about exactle?

Housing is not a privilege. It is keeping you from being dragged out in the street.

There is no health security, treatment nor biologically wise.

Thought experiment: Let's say you need a kidney transplant. And let's say you can go price shopping to have this procedere. There is a doctor in Seattle that can do your operation for $10,000. There is a doctor in Witchita that can do it for $9,500. And there is a doctor that can do it in Mexico for $1000. Where do you go to get your kidney transplant done?.....There is no market transparency for medical care. You don't know how much you actually pay, and you never will as long as you keep your head in the sand.

What income have you produced that incrued you a Pigovian Tax? None? That's what I thought. Whom are you protecting?

That's because of your adherence to income tax. Income tax and capital gain should be the same.

 

You're actually presenting a false analogy. The human body requires certain nutritional elements such as calories, protein, vitamins, etc. and if you don't consume those essential nutrients you will become sick and possibly die. The types of food a person consumes is irrelevant so long as it contains the essential nutritional elements. The nutritional elements in food that are required for the human body to be healthy and survive are the same regardless of the food source that contains those elements.

For example the human body doesn't really care if you eat an orange or eat a lemon to supply it with Vitamin C. The human body needs the Vitamin C and will absorb it from whatever food source contains it.

The nutritional elements of the food are the same just like dollars are the same. By analogy some food sources might be a "$50 bill" while others are a "$20 bill" but in the end we all need the same amount of "food" to survive just like we all need the same amount of dollars, that does vary based upon household demographics and location as reflected by the MIT Living Wage Calculator, to survive in today's economic society.

All dollars spend the same just like all nutrients contained in food are consumed by the human body the same.

 

This is actually false. Workers are compensated based upon how easy it is for the employer to replace them. Most people can dig a ditch so the compensation for digging ditches is very low because there are so many replacements for the worker. Very few people are trained (educated) to preform the tasks of a medical doctor so the compensation is much higher because there are fewer replacements for doctors.

The opposite of this question is:

Should employers pay a single person more than a married person with three children since their necessary expenditures are much different?

From a philosophical perspective I refer to John Locke's Second Treatise on Civil Government, Chapter 5, on the (natural) Right of Property where he establishes that the labor of the person is to provide for their support and comfort so each, at a minimum, should each should always have enough compensation from employment to fund their necessary/mandatory expenditures and each should have something left over to use for discretionary expenditures that provide some comfort.

Of course we're not referring to maximum compensation but instead to minimum compensation and philosophy doesn't necessarily reflect reality so let's see what would happen if we applied the philosophy without any pragmatic considerations for reality using the MIT Living Wage Calculator to address your question. For this I'm going to select Phoenix Arizona that's in Maricopa County.

http://livingwage.mit.edu/counties/04013

An adult with three children would require a minimum annual income before taxes in wages and benefits of $78,133 or about $37.60/hr for a standard 2080 hr work-year.
A single adult without children would require a minimum annual income before taxes in wages and benefits of only $22,192 or about $10.67/hr for a standard 2080 hr work-year.

In both cases this only addresses the "support" that John Locke refers to without any consideration for "comfort" based upon the labor of the person.

If we're to establish a "minimum wage" for all workers we could, in theory, based upon the above establish it at $37.60/hr that would meet the philosophical argument that both are entitled to minimum compensation for "support" (mandatory spending) while the amount for "comfort" (discretionary spending) is a variable. It's great from a philosophical perspective but it's not very pragmatic because the single person would be receiving over $50,000/yr in compensation for discretionary spending while the family of four wouldn't receive any compensation for discretionary spending.

So we have a divergence between the philosophy and the reality if we address a single mandatory minimum wage that we have to address pragmatically. There are considerations when we address reality pragmatically.

First and foremost is the understanding that the minimum wage does not affect the competitiveness of enterprise so long as it's applied to all enterprise. It's a "baseline" similar to the minimum cost of rent in a community for the enterprise. They can pay more but not less and it applies across the board to all enterprises.

We don't want to establish the minimum wage arbitrarily high because that can adversely affect us relative to international trade where foreign nations don't have the same baseline for compensation even though international trade is only a minority percentage of our economy.

We must understand that one of the primary aspirations of most single workers is to create a family in the future and that some discretionary compensation (i.e. compensation above the cost of living) needs to be allocated to them for this purpose.

So where do we establish the "minimum wage" for all workers is subjective to some degree. It needs to be above the $10.67/hr required just for the cost of living for the single worker while arguably below the $37.60/hr for the person supporting three children.

While ultimately there is subjectivity related to establishing a "one-size-fits-all" minimum wage there still has to be some statistical foundation for the decision and I'd use the "average family size" as that foundation.

"The average family size in the United States is 3.59. The average children per household is 2.4."

http://www.answers.com/Q/United_states_average_family_size

To fit within the parameters of the average family size and number of children per household I'd use two statistics from the Living Wage Calculator.

The cost of living for a single working adult with one child (or non-working spouse) is $47,219 and the cost of living for two adults (one working) and two children is $50,116. The average income for both is $48,667.50 which equals $23.40/hr as a pragmatic minimum wage for the United States. This minimum wage is also enough for two working adults to support three children because they would have $97,344/yr that covers their minimum cost of living of $79,852 leaving them a little left over for their "comfort" (discretionary spending) on things like vacations with their kids and investing for retirement.

It's not a "perfect" solution but it is a pragmatic solution and every enterprise can afford to provide $23.40/hr by revising their business plan to accommodate it just like their business plan covers the cost of the rent they pay for their business.

 

This thread is actually about federal taxation and not the minimum wage but the above provides some insight on how the tax proposal works.

The "Exemption" proposed is based upon median income for a family of four at about $50,000/yr and if we applied a minimum wage of $23.40/hr and fulltime employment then several things happen. First of all we know that you can't jump from the current $7.25/hr to $23.40/hr overnight because it would be devastating to the economy. It requires time for a business plan to accommodate significant changes in costs of any kind. Eventually it would compress compensation reducing the income of high income households to fund the increase in the income for the lowest income households. To a minor degree it would also increase gross domestic product because some of in increase in compensation for the lowest paid workers would result in slightly higher pricing related to the labor they provide. It would also changed the median wage by increasing the lowest compensation paid. All of this is incalculable, at least for me, so I'm going to stick to using my "baseline" even though I know it would change.

So, using my baseline of the $50,000/yr household exemption, and not changing it based upon family size (even though it would vary based upon family size) the single parent with one child earning $48,672/yr based upon the $23.40/hr minimum wage still would not have any federal income tax obligation. They'd have a few dollars in income above their cost of living but not much and still wouldn't have any federal income tax obligation.

On the other hand the two working parents with three children, both earning minimum wage, would have $97,344/yr in income and $47,344 would be taxable income. Based upon the calculated tax rate of 24% from 2014 their tax obligation would be $11,360 plus $7,447 in FICA taxes for a total of $18,807 in taxes leaving them with $78,537 which is still enough to live on based upon the Living Wage Calculator that establishes the necessary "after-tax" income of $69,801 for the household. That's not a lot of "surplus" income if that same household contributes 10% of their net income to retirement (not accounted for by MIT) of course so they're still not doing all that well but they're getting by. Of course they probably wouldn't have to contribute to retirement if my privatization proposal for Social Security was also adopted because the full 15.3% of FICA/Payroll taxes on their gross income below $50,000 each would be going into private investment accounts and they'd be multi-millionaires by the time they retire.

As noted this isn't completely accurate but it does give some idea of how things would change with a much higher minimum wage. The tax rates would probably also drop because more income is being generated, less welfare assistance is required, eventually Social Security all but goes away, and Medicare goes away completely over time.

 

We need better solutions at lower cost.

 

Should we expect that to be accomplished by electing politicians to serve in Federal government exercising power over the States and the people?

Those who are poorest and pay little or no taxes are unlikely to vote for any politician who would provide less for them and those who have the greatest wealth/income are unlikely to vote for any politician who would take more from them than they could recoup as a result. More government aid and spending results in the poorest acquiring more, and as a result their spending results in increased wealth and/or income for the richest. Primarily, it is the middle class working taxpayers who are hit the hardest.

 

That depends upon two criteria. First is whether it's an issue of national importance where all states are affected and second is whether the states are responsible or not. Generally speaking the federal government only steps in when the states have failed to adequately address an issue. For example federal aid to education came into existence because the states were failing to provide enough funding for education. The EPA came into existence because the states were failing to adequately protect the environment.

I've never believed the claim that people vote based upon how they personal benefit (or don't) benefit from government. It's been my experience that people are more divided based upon whether the politician is empathetic to the needs of the poor or whether the politician doesn't seem to care about the needs of the poor and not whether they personally benefit from the different policies and spending (or lack thereof) based upon the empathy. I've never benefited from welfare programs (excluding Social Security recently) but I still look for politicians that are empathetic to the needs of those that are in need. I'm not a Democrat and don't vote along any party lines but I'm still looking for a politician that addresses poverty because it's a serious problem for America. Personally I like proposals that reduce the poverty so that the necessity to mitigate the effects of poverty with welfare assistance are reduced.

Reducing the poverty reduces the necessity for the government aid and spending to mitigate the effects of the poverty. In response to a question addressing a "minimum wage" I ran some calculations for you and it came out with an argument for a minimum wage of about $23/hr and a minimum wage of that amount would unquestionably eliminate hundreds of billions of dollars in government welfare assistance because the workers wouldn't need it anymore. It attacks "poverty" and would dramatically reduce the poverty that drives the necessity to mitigate the effects of poverty with welfare assistance.

Of course the reason that the middle to upper-middle class income households are carrying the bulk of the personal income tax burden is because of our nefarious tax codes where the super-wealthy deriving their income from capital gains pay lower tax rates that are basically 1/2 of what working Americans pay on the same income. My tax proposal corrects that tax problem. People also tend to ignore that it's the low to middle income tax households that carry the burden related to the Social Security taxes that account for about 1/3rd of all federal revenue while the wealthy contribute very little to these taxes.

Once again I've tried to resolve these issues with my tax proposal on both personal income taxes as well as Social Security taxes.

 

what about, equal application of the law?

 

What about it?

 

there is no need to resort to any fallacy of appeals to the masses.

 

How BOT like a response.

 

it merely and Only, requires some clue and some Cause. equal application of the law is simpler than political passions of the moment.

 

But not everyone lives in Kansas.

 

This erroneous belief needs to be corrected.

When all forms of taxation which includes federal income taxes, Social Security taxes, excise taxes, state taxes, local taxes, etc., are included the lowest income households in the United States have the highest tax burden relative to income of any income group. What we've found historically is that some organizations selectively address only a specific tax, such as the federal income tax, while ignoring all of the other taxes the low income household pay to disparage the poor and claim that they're not "paying their fair share" but that is a nefarious deception on the part of those organizations.

In a study several years ago it was found that in Washington the low income households had 14-times the total tax burden relative to income when compared to the high income households in the state. 14-TIMES THE TAX BURDEN RELATIVE TO INCOME. Admittedly Washington was the worst state for the poor to live in based upon all taxation but all of the states reflected the poor had a higher tax burden relative to income than the wealthy.

Total tax burden relative to income isn't even close in the United States because the low income household always pays far more than the high income households.