Quote:
Originally Posted by alansmithee
It just seems to me that most companies would just pocket the payroll tax, or use that money to offset the loss of profit due to lowering prices. Again, the company isn't obligated to return the cash to the workers.
I don't work for Microsoft, but by reading the papers I found out about their cash surplus and what they were planning on doing with it. Why weren't workers there arguing for higher pay? Relying upon workers to force the hand of a business is rarely effective. Most people don't currently understand that businesses have to pay approx. double of their pay in various payroll taxes, why would they understand not having to pay it? At best, I could see it forstalling some layoffs, but I think even that is doubtful.
Again, a consumption tax might work in a true free market system, but that isn't what we have. Honestly I don't know of anyplace with a free market system. One of the most important things necessary for a free market economy to work efficiently and hold up to many theories is perfect information for all participants. And that is one thing almost always lacking, which gives those with more information (and usually higher income/money) more power in dealing with those without all the information.
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I guess there are a couple of ways to look at this.
First, our populace needs to be as educated on this issue as possible. Not an easy task, but a necessary one regardless of the type of tax system in place.
I would also assume that some "rules" would apply. Not every company would increase salaries because of the new found money, but some would. The companies that recognize this and increase salaries would then be the "hot" companies to work for. Competing companies would then have to "shit or get off the pot." All it takes is a few companies to recognize this and the ball would start rolling. And, I honestly believe that some companies would do this and start the trend.
As to the free market idea. Philosphically speaking, there is no such thing as 100%. Using that argument, there is no such thing as a totally free market. The best we can do is to try and achieve free market status and I think the U.S. is ahead of the curve on this. In terms of the availibility oif information, I see that trend changing dramatically every day.