Taxes - Page 2 - Tilted Forum Project Discussion Community

smooth · 11-28-2004, 10:14 PM

Quote:

Originally Posted by KMA-628

How would this model be better for the worker?

The American goes home with $100.00 gross.

The European goes home with $45.00 gross.

That American will make over twice what the European will. Factor in tax rates and the difference is even higher.

I may be reading your post wrong, but that just doesn't make sense to me.

I wouldn't say you were reading my post "wrong."
Directly under the portion of my post that you quoted I answered the point you raise.

Quote:

We might wonder about the plight of each worker who now only earns half as much ($45 income rather than a single worker making $100).

But two responses to this:
a) higher productivity would increase profits. It might be that you would actually have $200 to spend on labor, so you could have the workers produce for 6 hours.

b) two workers in a family could conceivably work for 3 hours each (6 total is still less than 10) and be able to reap the same total financial reward, while allowing each member to be productive work force (satisfying and healthful for economy) and family time (satisfying and healthful for society).

So from your answer to Manx regarding the inability to increase productivity (inherently in the job function), I can understand how point (a) wouldn't apply.

But point (b) would in that both parents from a home could share the workforce burden. Not to say that you should hire both people in a household, but I hope you're following what I'm putting down now.

GMontag · 11-29-2004, 08:50 AM

Quote:

Originally Posted by KMA-628

Everything follows this rule. Be it cars, labor, food, etc. (baring substitution)

There are a great many things that do not follow the laws of supply and demand. There are many products that are essential to life for the person who needs it, and therefore the demand will be there regardless of what price it costs. Do you really think that someone who either gets a certain medicine or dies will want that medicine less if the cost goes up?

KMA-628 · 11-29-2004, 07:54 PM

Quote:

Originally Posted by smooth

But point (b) would in that both parents from a home could share the workforce burden. Not to say that you should hire both people in a household, but I hope you're following what I'm putting down now.

What if the person is single?

What if both parents already work?

/still makes no sense to me
//besides, how do you guarantee increased productivity?

KMA-628 · 11-29-2004, 08:37 PM

Quote:

Originally Posted by smooth

But don't get hung up on that very glib example, please. Refuting those specific figures isn't the point, but to use it heuristically. For example, to further flesh this out. We might wonder about the plight of each worker who now only earns half as much ($45 income rather than a single worker making $100). But two responses to this: a) higher productivity would increase profits. It might be that you would actually have $200 to spend on labor, so you could have the workers produce for 6 hours. b) two workers in a family could conceivably work for 3 hours each (6 total is still less than 10) and be able to reap the same total financial reward, while allowing each member to be productive work force (satisfying and healthful for economy) and family time (satisfying and healthful for society).

You might be in the perfect position to try an experiment. You could, for example, strike a deal with one of your laborers that essentially states: I increase pay, reduce your hours, but your productivity needs to increase X amount (to be determined so the overall equation remains basically static). Try that for a month or two with your employee. If the productivity doesn't increase, back to the American model of driving wages down and increasing hours. I personally think that model produces downward pressure on producivity.

Sorry, I have to use numbers, it makes more sense to me.

Scenario: SERVICE TYPE INDUSTRY

Let's say I charge my customers $25.00/hr for the labor my employees provide (negate taxes, etc.)

Worker "A" is an average producer and gets paid $12.50/hr for an eight-hour day (no overtime). If I can keep at least seven of his working hours billable, I will gross $175.00 for Worker "A". My net profit would be $75.00/hr.

Worker "B" is an above-average producer and gets paid more an hour than Worker "B" (let's say $17.00/hr). I can only charge my customers $25.00/hr. I can't say that the price would be $25.00 an hour if you get my average tech or $35.00/hr if you want my above average tech (even if I try and tell them that the time on site would be less so their bill would probably be less--nobody is going to believe me anyway).

The law of averages says that of my techs, some will be average, some below-average and some above-average. There is no way for me to only keep "above-average" techs. There just aren't enough people out there to fill this role. When I was running crews in this type of situation, one out of five techs was "above-average", the one "above average" tech did get paid more, but our hourly rate was the same, regardless of which tech showed up on site. (plus they were union, so there was nothing I could do there--ever try and get a union worker to voluntarily be more productive, regardless of the pay? I was on a site in Mass. where the union stipulated what the techs made, that they got at least XX hours of overtime and nobody could set requirements for them--i.e. pull 1500 ft of wire a day, they could only be told to pull 1500 ft of wire, time limits were not allowed)

In other words, this idea could not work in a service-type industry. The first step would require that American unions be abolished, which will never happen.

Scenario: Manufacturing Plant

Worker "A" is an average worker and gets paid $10.00/hr. His average output is 5 units an hour and I sell the units for $75.00 a piece. Each piece costs me $50.00 in parts to make. On an eight-hour day (again, I don't want to pay overtime, it kills my profit) I will make a net profit of $920.00 on Worker "A" for one work day (taxes, variable costs excluded). My per unit net profit is $23.00.

Worker "B" is far more productive and gets paid $15.00/hr. His average output is 8 units/hr. and works for 3 hours (that is an increase in productivity of more than 50% which would be pretty fantastic). For Worker "B"'s workday, I make a gross profit of $1,800.00. After paying costs and paying labor, my net profit is $550.00. My per unit net profit is $23.13

An increase of $0.13? Statistically, paying either worker in either of the above fashions means the same thing to me. I make the same amount of profit either way.

However, our average guy, Worker "A", brings home $100.00 per day gross.

Mr. Above Average, the guy who increased his productivity over 50%, brings home less than half-that.

Let's say both guys are single.

It pays better to be average, huh?

What are the chances that I could average a 50% increase in productivity for every worker that the plan is offered to? Every percent point drop in productivity means a similar drop in profit to me as the owner.

What would be an acceptable increase in productivity?

As the owner of the plant, I don't care, my per unit profit stays the same regardless and the money I will make each year stays the same (as long as the increased productivity of the workers getting higher pay/less hours never falls below 50%)

/sorry, it sounds nice, but I don't see the numbers working. Unless, of course, I am wrong with my numerical assumptions (which I thought were on the optimistic side).

Publius · 11-29-2004, 10:19 PM

I have often pondered the relative arguments for the different tax schemes and it has occurred to me that all of them in one form or another carry varying degrees of unfairness. In examining this question, then, I will attempt to walk you through my thinking and like most of my posts here this will probably turn into a short essay, so please bear with me.

To begin with we must examine the (brief) history of taxation. In state of nature (I am a fan of Locke’s view of the state of nature, so this may seem familiar to other fans of Locke) all property is held in common. One is free to take for one’s use from the common to the extent that one can make use of that which one takes. That is to say, I can take a piece of property, say an acre of land, for my self so long as I am able to “work” or use that acre of land. If, for whatever reason, I am only able to use ½ of that acre then I have taken more then I can properly use and the ½ that I am not using returns to the common. Now, since we are not talking exclusively about property as land, but also as chattel, lets extend this doctrine. In the state of nature I am allowed to remove from the common resources (food stuffs, materials, personal belongings) only to the extent that I may use them before they spoil. So, to use an example by Locke, I can gather together as many acorns as I like only so long as I will be able to use that which I take for myself. If I take more then I can use then I have taken in excess and the remainder should be returned, or left in, the common. Accordingly, the rule in the state of nature can be thought of as, One may take from the common only to the extent one can make use of what one takes, and may take no more than this.

However, of course we no longer live in the state of nature (if man ever did), but in a “civil” society. The invention of society brings with it the ability for one to trade certain items one possesses for that from another, leading to a system of bartering. This allows one to take more of a certain items, say acorns, out of the common then one could possibly use, but trade those excess acorns to someone else for say walnuts. Now bartering in such a way will necessarily restrict one to only take from the common only so much as one will be able to either use or trade before it spoils which still limits the total amount one would be able to take from the common. The eventual outcome of bartering (in most societies), is the invention of currency.

Currency, as it develops in most societies, tends to be precious metals, jewels, or other non-perishable items. In themselves this objects have very little worth besides the “artificial” worth given to them by the society. Over time they come to represent the fruit on ones labor allowing one to take much more (acorns) from the “common” then one could possibly ever hope to use, trade those acorns for currency, and store up as much currency as one possibly can. Furthermore, this now allows one to trade one’s time to work for others in gathering (acorns) from the common, and in exchange for one’s time one receives currency for one’s pay, rather then a share of the acorns. It is through this process that there is the eventual destruction of the “common” nearly altogether because one can now “hire” others to work the land, or other property, rather then do all the work one’s self. It is important to keep in mind, however, that currency has no “actual” worth other then that given to it by the members of a particular society and in the end its value is still a representation of one’s work (or that of others working for one).

It is also important to look out how societies were first formed. According to Locke, one leaves the state of nature (presuming one was ever actually in a state of nature) to join in society because as a collective whole, one it better able to protect against the intrusion upon one’s right by another. It is for one’s own benefit then that one chooses to join society (of course those who are born into society never are given this choice, but presumably they would chose to remain in that society if it were given to them). In the beginning, well, you know the rest. Needless to say no matter what view you have of how man came to be in existence, the family structure was the first human society. In the sort of family structure found in the state of nature, the “self” is not as important as the “whole” of the family such that the emphases is not upon the “I” but upon the “we”. In the first societies based around the family unit, then, property was held in common. That is to say, the very first societies were communist, in their truest form (not the mangled form promoted by Stalin and his ilk). In such a society there was no need for “taxation” because all was held in common. As societies grew, they still maintained much of the form of the family structure (think American Indian tribes or Scottish Clans). Basically societies at this point grew to include the extended family. Much of the old system remained at play, property in a society of this form was still very much held in common, but we begin to see a shift to a more socialistic form of society. There still does not exist a true form of taxation in the early stages of these societies but they do begin to exist. Members are required to contribute to the whole of the community because here still we see the emphases placed upon the “we” rather then the “I”.

Eventually what we end up with as these small familiar societies grow are “city states”, usually with one family or the other coming to dominate over the others and the establishment of a monarchy. As soon as the monarchy comes into play, the reason for taxation changes drastically. Now rather then one contributing for the support of the extended familiar structure one is being taxed to support monarchy who “may” in turn provide for ones security if they are a “good”, or may simply take from one to support themselves if they are not. Therefore the Monarchy introduces a new reason for taxation, to support the sovereign. Now here is where I would digress I bit from the views held by Locke, embracing instead a view more properly held by Rousseau, being that a just society exist for no other reason then for the protection of one’s right and as soon as it ceases to do so it is no longer just and one immediately returns to a state of nature in regards to the sovereign and one’s fellow man. Given time I might be able to dream up a system of Monarchy that would be just in protecting one’s rights (say the current system technically in place in England for example) but generally speaking, Monarchy’s or any other scheme of governance where there is a superior sovereign above which this is no other, are prima facia unjust, but I digress (the phrase “give me liberty or give me death” comes to mind).

Eventually, a republican form of society will arise where there is no sovereign because everyone is subject to the same laws of the land. The major change we see take place between early society and the republic form of society is a gradual shifting of the focus for the common existence of society from the “we” to the “I”. This shift is most pronounced in a Monarchy, if you are the monarch of course, but more properly in a Capitalistic form of society much like we have today. The tendency is lose focus upon why society exists in the first place, and that is for the preservation of the individual’s right (life, liberty and property, according to Locke, or life, liberty and the pursuit of happiness, according to Jefferson, not necessarily in the order given in either case) and for the promotion of the common good (which after nearly 4 pages, go ahead copy/paste this part over to word remembering to double space, brings us back to taxation).

From what I have read here, most people agree that society necessary entails some form of taxation for its support. The extent to which taxation should be required is what is in question. There are those who support a very minimalist view in that the government should only take the very minimal needed to support bare bones necessities and no more. But what are the “bare bones” necessities of society? You see this is the problem, everyone has a different view about what the government should and should not be involved in providing for. Here I tend to side most closely with a Jeffersonian view of government (which should come as no surprise to those who have read my posts before). Government should safeguard my rights to (in this order) liberty, life, and the free pursuit (not right to, but right to pursue) happiness. As such there are a great many thing that government should undertake, public education being the chief of these. For you see, (as Jefferson oft noted) an educated public is the keystone to any republican form of society. I think a great deal of the problem debated today (often on this very bored) could be resolved by greater education of our society (but again I find myself digressing). National security of course is a must (can secure rights without it), as are public works projects. The list could go on and on of course but I think you get the idea.

How these governmental undertakings would be best funded, of course, is another hot topic for debate. On the one hand you have the side that argues that those who have the most “property” for lack of a better term here, should pay the most toward public funds because they have gained the most from the benefits offered to them by society and have the most “excess property” to spare. On the other hand you have those who claim that everyone should be required to pay equal shares of their “property” because it is somehow unfair to require more from those who have more. There are of course different taxing schemes that purport to be more “fair” then others based upon one’s view of how taxes should be levied varying from straight tariffs (usually paid on “luxury” items, a round about way of taxing the rich by the way and functioning as a “graduated tax”) supported by our founders and the primary source of income for our country until 1913 and the adoption of the 16th Amendment (which by the way was introduced and promoted by Republicans), income tax (graduated or otherwise) which our founders were vehemently opposed to, “property” tax (taxation based upon the amount of assets one possessed, also opposed by our founders), real-estate tax (commonly called property tax), sales tax, and many other varying schemes (stamp tax etc.).

Personally, I support a graduated income tax, period. Those with greater disposable income should pay more then those without or with less. Why? Because they not only have benefitted more from society then other but they also have a greater amount to lose if that society is not supported. Additionally, (partial) redistribution of wealth is necessary for maintaining a stable society for without a controlled redistribution of wealth from the top to the bottom what you end up with is with more and more wealth flowing to the top, with less and less being divided up amongst the bottom. This inevitably leads to revolution by the bottom against those hoarding the wealth and the destruction of society (don’t kid yourselves into believing it can’t happen here when if you look at history it has happened at some point to nearly every great civilization in the world and is commonly occurring in countries around the world today).

Now then the final topic I want to address here is how the two (primary) sides view taxation. On the one hand you have the “liberals” who in addition to public works projects want to provide “social programs”. These “social programs” cover a broad rainbow of issues from art, public parks, unemployment, adult educations, etc. On the other hand you have the “conservatives” who claim (claim being the operative word) that government should only take what is necessary to provide the bare necessities for society and leave the “social programs” to private individuals. You see the problem is that while the “liberals” come right out and tell you where they are going to spend your money and why, the “conservatives” claim they are going to save you money and then spend it anyway. Its not lying exactly, its just not being forthcoming in their true intentions.

Example: Bush claims the traditional republican stance of lower taxes, cutting pork spending, and that the rich shouldn’t be charged significantly more then the poor in taxed simply because they have more excess resources. But here he is trying to have his cake and eat it to. Let me explain. Under Bush’s new tax plan, the average family in America was given addition tax credits to reduce the amount they were required to pay in federal income tax. One of the largest of these credits is the “child credit”. So then take two average families. The average family has consists of about 4 ½ persons and combined income is about $58,000. Presuming that this is the “classic” family unit that equals out to be Mom, Dad, and 2 ½ children. Now then, take another family, say me and my wife (our present combined income is somewhat sort of the national average but that is because I returned to school to further my education and we are living on one income, but for the sake of this example lets presume that the incomes are equal). Now then, your classic family is going to pay less in income tax then me and my wife. Why? Well thanks in large part to the child credit. Although the classic family will be using up much more social programs then my wife and I will, we will pay for more of it then they will because we have a greater amount of excess income. So people, this is about as close to and apples to apples example as I can give, under the traditional “conservative” income tax scheme, families who use more of societies governmentally funded social programs will pay less then families who use less. Talk about robbing from one side to give to the other. How are they able to get away with such trickery? Well you have to understand that the “conservatives” primary base is “family values”, so you see its all in how you package taxation for resell to the masses. It is ok to tax me and my wife more because of our excess, but it is not ok to tax Bill Gates more for his excess, because will all the vast amounts of money he has, some of it will trickle down eventually (but again I digress).

The primary problem I see in the disconnect between “liberals” and “conservatives” view on taxation is a matter of degree. It is between the rural viewpoint and the urban viewpoint (I’m sure you have all seen the map of red and blue America). Growing up in very rural America in a very red portion of the country I was indoctrinated with the rural conservative view of society. You see ( and I’m most of you who also grew up in rural America or live there now would agree) there lies a fundamental difference in world views. In rural America there is still a great sense of the “we” in society. If your neighbor is in trouble and needs some help, you go help him, its just what you do. Having lived a good portion of my life now in urban areas I can tell you that often times you are lucky to even know who your neighbor is, let alone if they are in any sort of trouble. In the country if you fall on hard times and your family runs out of food, the community will often come together and make sure you are fed until you can get back on your feet again. In urban society this tasks falls upon those “social charity programs” that conservatives complain about so much. In rural America if you can’t pay your bills with “currency” you can still usually work out some form of barter system to get the goods and services you need (example: my father ran a small tax accounting practice for many years, many of his clients were unable to pay his fees with currency so instead they would trade him crops, meets, or exchange services. One example is when a rancher had a rather lengthy audit by the IRS. This rancher ran a fairly large operation and was a millionaire many times over on paper, but in reality didn’t have dime to his name. So in exchange for my father’s work the rancher gave my dad a entire side of beef, already processed and stored at the local meet locker. Now there is now way my family could have used an entire side of beef, so my dad traded half of it to a local mechanic for repairing our truck. Try doing that in a city).

Ironically, if you follow where most of the money goes, it is often those who are against high taxes and graduated taxation of the rich, who receive the most benefits from these vary same “social programs”. Farmers and small businesses would be hosed were it not for governmental subsidy resulting in price controls. The “family value” constituency would be in for a real shock if they were required to pay for all the goods and services that they consumed from “social programs”. So in short, while I do not necessarily support a robbing from Peter to pay Paul sort of tax system, it is fair to require those with greater excess to contribute more for the greater good. I just wish people would wake up to what it is they are truly receiving and ask themselves are they willing to live without it? If not, then pony up on tax day and quit your complaining.

GMontag · 11-29-2004, 10:46 PM

Quote:

Originally Posted by KMA-628

Scenario: SERVICE TYPE INDUSTRY

Let's say I charge my customers $25.00/hr for the labor my employees provide (negate taxes, etc.)

Worker "A" is an average producer and gets paid $12.50/hr for an eight-hour day (no overtime). If I can keep at least seven of his working hours billable, I will gross $175.00 for Worker "A". My net profit would be $75.00/hr.

Worker "B" is an above-average producer and gets paid more an hour than Worker "B" (let's say $17.00/hr). I can only charge my customers $25.00/hr. I can't say that the price would be $25.00 an hour if you get my average tech or $35.00/hr if you want my above average tech (even if I try and tell them that the time on site would be less so their bill would probably be less--nobody is going to believe me anyway).

The law of averages says that of my techs, some will be average, some below-average and some above-average. There is no way for me to only keep "above-average" techs. There just aren't enough people out there to fill this role. When I was running crews in this type of situation, one out of five techs was "above-average", the one "above average" tech did get paid more, but our hourly rate was the same, regardless of which tech showed up on site. (plus they were union, so there was nothing I could do there--ever try and get a union worker to voluntarily be more productive, regardless of the pay? I was on a site in Mass. where the union stipulated what the techs made, that they got at least XX hours of overtime and nobody could set requirements for them--i.e. pull 1500 ft of wire a day, they could only be told to pull 1500 ft of wire, time limits were not allowed)

In other words, this idea could not work in a service-type industry. The first step would require that American unions be abolished, which will never happen.

Wait, how do you have above and below average producing techs? The "product" they are producing is hours billable to the customer. All the techs are producing that product at the same rate, as long as they are actually working.

smooth · 11-29-2004, 11:40 PM

Quote:

Originally Posted by KMA-628

Sorry, I have to use numbers, it makes more sense to me.

Scenario: SERVICE TYPE INDUSTRY

Let's say I charge my customers $25.00/hr for the labor my employees provide (negate taxes, etc.)

Worker "A" is an average producer and gets paid $12.50/hr for an eight-hour day (no overtime). If I can keep at least seven of his working hours billable, I will gross $175.00 for Worker "A". My net profit would be $75.00/hr.

Worker "B" is an above-average producer and gets paid more an hour than Worker "B" (let's say $17.00/hr). I can only charge my customers $25.00/hr. I can't say that the price would be $25.00 an hour if you get my average tech or $35.00/hr if you want my above average tech (even if I try and tell them that the time on site would be less so their bill would probably be less--nobody is going to believe me anyway).

The law of averages says that of my techs, some will be average, some below-average and some above-average. There is no way for me to only keep "above-average" techs. There just aren't enough people out there to fill this role. When I was running crews in this type of situation, one out of five techs was "above-average", the one "above average" tech did get paid more, but our hourly rate was the same, regardless of which tech showed up on site. (plus they were union, so there was nothing I could do there--ever try and get a union worker to voluntarily be more productive, regardless of the pay? I was on a site in Mass. where the union stipulated what the techs made, that they got at least XX hours of overtime and nobody could set requirements for them--i.e. pull 1500 ft of wire a day, they could only be told to pull 1500 ft of wire, time limits were not allowed)

In other words, this idea could not work in a service-type industry. The first step would require that American unions be abolished, which will never happen.

Scenario: Manufacturing Plant

Worker "A" is an average worker and gets paid $10.00/hr. His average output is 5 units an hour and I sell the units for $75.00 a piece. Each piece costs me $50.00 in parts to make. On an eight-hour day (again, I don't want to pay overtime, it kills my profit) I will make a net profit of $920.00 on Worker "A" for one work day (taxes, variable costs excluded). My per unit net profit is $23.00.

Worker "B" is far more productive and gets paid $15.00/hr. His average output is 8 units/hr. and works for 3 hours (that is an increase in productivity of more than 50% which would be pretty fantastic). For Worker "B"'s workday, I make a gross profit of $1,800.00. After paying costs and paying labor, my net profit is $550.00. My per unit net profit is $23.13

An increase of $0.13? Statistically, paying either worker in either of the above fashions means the same thing to me. I make the same amount of profit either way.

However, our average guy, Worker "A", brings home $100.00 per day gross.

Mr. Above Average, the guy who increased his productivity over 50%, brings home less than half-that.

Let's say both guys are single.

It pays better to be average, huh?

What are the chances that I could average a 50% increase in productivity for every worker that the plan is offered to? Every percent point drop in productivity means a similar drop in profit to me as the owner.

What would be an acceptable increase in productivity?

As the owner of the plant, I don't care, my per unit profit stays the same regardless and the money I will make each year stays the same (as long as the increased productivity of the workers getting higher pay/less hours never falls below 50%)

/sorry, it sounds nice, but I don't see the numbers working. Unless, of course, I am wrong with my numerical assumptions (which I thought were on the optimistic side).

It doesn't serve our interests to create examples and counter-examples to illustrate how it could or could not work. I was giving you a glib example of the argument in Rifkin's book of how it does work in the European model. I'm not opposed to you pointing out what you think are problems, but how can you know whether he addressed those issues without reading his complete argument?

My post was intended to encourage you to read Jeremy Rifkin's book wherein he outlines the historical evidence for what I typed, not argue the hypotheticals you are now raising. I mean, maybe I could go point for point, but why? He already did it

I should point out, however, that even in your example it doesn't "pay to be average." In your second example, worker B works almost two-thirds less time than worker A and makes only half as much. If you increased his hours to 6 (still less than 8, which worker A does), he makes as much as worker A. But the Eurpean model is that worker B prefers to take a pay cut and only work a fraction of the time.

That was the premise of me and Rifkin's argument: that people would prefer to make a wage that allows them to have more time out of the factory, rather than the goal itself being making more money.

So yes, I would prefer to work 3 hours and earn $50 bucks than work 8 hours and earn $100.

And I wouldn't even need to double my output to do that: a 50% increase in productivity is not working twice as hard--that would be a 100% increase in productivity.

madsenj37 · 12-01-2004, 10:44 AM

Quote:

Originally Posted by KMA-628

Um, no.

Fact: a side-effect of raising the minimum wage is a decrease in the demand for labor. i.e. an increase in unemployment. That means less taxes going to the "social programs".

Forcing a system out of equilibrium will most always have negative side effects.

The other problem is that no one will ever agree on exactly what a "living wage" is. $6.50? $7.00? $8.00? $10.00? or even higher.

Those were my thoughts exactly.

pedro padilla · 12-02-2004, 06:08 PM

Quote:

Originally Posted by Ustwo

Some taxation may be needed, I will not argue that, but taxes should not be used to take money from one group of people to give to another, for the sake of buying votes. That is robbery.

Wow, You nailed it. Sure you don´t want to retract that statement?

KMA-628 · 12-02-2004, 07:44 PM

Quote:

Originally Posted by GMontag

Wait, how do you have above and below average producing techs? The "product" they are producing is hours billable to the customer. All the techs are producing that product at the same rate, as long as they are actually working.

Keyword: Service Industry (i.e. repair technicians)

And yes, I have run crews for many years, you get good techs and you get bad techs.

Example: Customer calls in for a service call

Tech "A" (above average) runs the call in less than an hour without needing help

Tech "B" finally calls for tech support after fiddling with the stuff for an hour. Two hours later it is fixed.

In all honesty, Tech "B" brings me in more money because he has twice the billable hours as Tech "A", but the fear is that the customer will notice that the guy doesn't know what he is doing.

KMA-628 · 12-02-2004, 07:51 PM

Quote:

Originally Posted by smooth

It doesn't serve our interests to create examples and counter-examples to illustrate how it could or could not work. I was giving you a glib example of the argument in Rifkin's book of how it does work in the European model. I'm not opposed to you pointing out what you think are problems, but how can you know whether he addressed those issues without reading his complete argument?

My post was intended to encourage you to read Jeremy Rifkin's book wherein he outlines the historical evidence for what I typed, not argue the hypotheticals you are now raising. I mean, maybe I could go point for point, but why? He already did it

I should point out, however, that even in your example it doesn't "pay to be average." In your second example, worker B works almost two-thirds less time than worker A and makes only half as much. If you increased his hours to 6 (still less than 8, which worker A does), he makes as much as worker A. But the Eurpean model is that worker B prefers to take a pay cut and only work a fraction of the time.

That was the premise of me and Rifkin's argument: that people would prefer to make a wage that allows them to have more time out of the factory, rather than the goal itself being making more money.

So yes, I would prefer to work 3 hours and earn $50 bucks than work 8 hours and earn $100.

And I wouldn't even need to double my output to do that: a 50% increase in productivity is not working twice as hard--that would be a 100% increase in productivity.

Smooth -

I have to use the above method because it is the way I analyze things.

Also, what if the person is single/divorced? They would be screwed under the Euro plan.

I just don't see it as having any advantages. I really don't care if I get more leisure time, I want more money, period. I have XX dollars that I need to make in order to maintain, after that, it is all free money. To cut my salary in half would make me work in the red, I just couldn't afford to lose half of my income, regardless of the leisure time involved.

Also, this plan wouldn't work in my situation: Only one working parent. We do it this way so that a parent is watching the kids (i.e. someone else doesn't raise my kids) and we also do it to save the $420.00 a week it would cost us (yes, that is an accurate number). The other parent (namely me) is busy going back to school and starting a company at the same time. We need 100% of my wife's income to survive.

I look at this idea (and I think I gave it a fairly objective look) and I just don't see any benefit to it.

madsenj37 · 12-03-2004, 02:05 AM

If I can pay $8.00 an hour and I need three workers, the most I can pay $24. With a living wage of say $12, I can only hire two workers. One job is lost. Two people may be earning more, but one is now jobless, and my firm gets less work done. A living wage is essentially a subsidy, because it guarantees a certain amount will paid. Subsidies cause a surplus of labor. So workers will be paid more, but less jobs will exist. The only way to support these out of job workers is with welfare, since all the jobs will be taken. Welfare costs money, the taxpayer will have to pick up the costs of firms being less productive. since no one will be living below the poverty level, the increase in wage will most likely be offset by the higher taxes. The higher the living wage, the higher the taxes and the higher the unemployment rate.

stevo · 12-03-2004, 06:23 PM

Quote:

Originally Posted by smooth

I was giving you a glib example of the argument in Rifkin's book of how it does work in the European model.

I should point out, however, that even in your example it doesn't "pay to be average." In your second example, worker B works almost two-thirds less time than worker A and makes only half as much. If you increased his hours to 6 (still less than 8, which worker A does), he makes as much as worker A. But the Eurpean model is that worker B prefers to take a pay cut and only work a fraction of the time.

That was the premise of me and Rifkin's argument: that people would prefer to make a wage that allows them to have more time out of the factory, rather than the goal itself being making more money.

The reason Europeans work less hours is because of taxes. They have higher tax rates than in the US. They take home a smaller percentage of their salary than American workers. At some point leisure time is more valuable than those extra hours of work because the compensation for those extra hours is now being paid in taxes. Its called the Laffer curve. look here. http://www.bized.ac.uk/virtual/econo.../inctaxth5.htm

madsenj37 · 12-04-2004, 01:18 AM

Thats a very interesting link and site as well, stevo22.

stevo · 12-04-2004, 03:57 PM

Isn't economics fun?

12-03-2004, 02:05 AM	#52 (permalink)
madsenj37 Still searching... Location: NorCal For Life	If I can pay $8.00 an hour and I need three workers, the most I can pay $24. With a living wage of say $12, I can only hire two workers. One job is lost. Two people may be earning more, but one is now jobless, and my firm gets less work done. A living wage is essentially a subsidy, because it guarantees a certain amount will paid. Subsidies cause a surplus of labor. So workers will be paid more, but less jobs will exist. The only way to support these out of job workers is with welfare, since all the jobs will be taken. Welfare costs money, the taxpayer will have to pick up the costs of firms being less productive. since no one will be living below the poverty level, the increase in wage will most likely be offset by the higher taxes. The higher the living wage, the higher the taxes and the higher the unemployment rate. __________________ "Only two things are certain: the universe and human stupidity; and I'm not certain about the universe." -- Albert Einstein Last edited by madsenj37; 12-03-2004 at 02:15 AM..

12-04-2004, 01:18 AM	#54 (permalink)
madsenj37 Still searching... Location: NorCal For Life	Thats a very interesting link and site as well, stevo22. __________________ "Only two things are certain: the universe and human stupidity; and I'm not certain about the universe." -- Albert Einstein

11-29-2004, 10:19 PM	#45 (permalink)
Publius Crazy Location: Never Never Land	I have often pondered the relative arguments for the different tax schemes and it has occurred to me that all of them in one form or another carry varying degrees of unfairness. In examining this question, then, I will attempt to walk you through my thinking and like most of my posts here this will probably turn into a short essay, so please bear with me. To begin with we must examine the (brief) history of taxation. In state of nature (I am a fan of Locke’s view of the state of nature, so this may seem familiar to other fans of Locke) all property is held in common. One is free to take for one’s use from the common to the extent that one can make use of that which one takes. That is to say, I can take a piece of property, say an acre of land, for my self so long as I am able to “work” or use that acre of land. If, for whatever reason, I am only able to use ½ of that acre then I have taken more then I can properly use and the ½ that I am not using returns to the common. Now, since we are not talking exclusively about property as land, but also as chattel, lets extend this doctrine. In the state of nature I am allowed to remove from the common resources (food stuffs, materials, personal belongings) only to the extent that I may use them before they spoil. So, to use an example by Locke, I can gather together as many acorns as I like only so long as I will be able to use that which I take for myself. If I take more then I can use then I have taken in excess and the remainder should be returned, or left in, the common. Accordingly, the rule in the state of nature can be thought of as, One may take from the common only to the extent one can make use of what one takes, and may take no more than this. However, of course we no longer live in the state of nature (if man ever did), but in a “civil” society. The invention of society brings with it the ability for one to trade certain items one possesses for that from another, leading to a system of bartering. This allows one to take more of a certain items, say acorns, out of the common then one could possibly use, but trade those excess acorns to someone else for say walnuts. Now bartering in such a way will necessarily restrict one to only take from the common only so much as one will be able to either use or trade before it spoils which still limits the total amount one would be able to take from the common. The eventual outcome of bartering (in most societies), is the invention of currency. Currency, as it develops in most societies, tends to be precious metals, jewels, or other non-perishable items. In themselves this objects have very little worth besides the “artificial” worth given to them by the society. Over time they come to represent the fruit on ones labor allowing one to take much more (acorns) from the “common” then one could possibly ever hope to use, trade those acorns for currency, and store up as much currency as one possibly can. Furthermore, this now allows one to trade one’s time to work for others in gathering (acorns) from the common, and in exchange for one’s time one receives currency for one’s pay, rather then a share of the acorns. It is through this process that there is the eventual destruction of the “common” nearly altogether because one can now “hire” others to work the land, or other property, rather then do all the work one’s self. It is important to keep in mind, however, that currency has no “actual” worth other then that given to it by the members of a particular society and in the end its value is still a representation of one’s work (or that of others working for one). It is also important to look out how societies were first formed. According to Locke, one leaves the state of nature (presuming one was ever actually in a state of nature) to join in society because as a collective whole, one it better able to protect against the intrusion upon one’s right by another. It is for one’s own benefit then that one chooses to join society (of course those who are born into society never are given this choice, but presumably they would chose to remain in that society if it were given to them). In the beginning, well, you know the rest. Needless to say no matter what view you have of how man came to be in existence, the family structure was the first human society. In the sort of family structure found in the state of nature, the “self” is not as important as the “whole” of the family such that the emphases is not upon the “I” but upon the “we”. In the first societies based around the family unit, then, property was held in common. That is to say, the very first societies were communist, in their truest form (not the mangled form promoted by Stalin and his ilk). In such a society there was no need for “taxation” because all was held in common. As societies grew, they still maintained much of the form of the family structure (think American Indian tribes or Scottish Clans). Basically societies at this point grew to include the extended family. Much of the old system remained at play, property in a society of this form was still very much held in common, but we begin to see a shift to a more socialistic form of society. There still does not exist a true form of taxation in the early stages of these societies but they do begin to exist. Members are required to contribute to the whole of the community because here still we see the emphases placed upon the “we” rather then the “I”. Eventually what we end up with as these small familiar societies grow are “city states”, usually with one family or the other coming to dominate over the others and the establishment of a monarchy. As soon as the monarchy comes into play, the reason for taxation changes drastically. Now rather then one contributing for the support of the extended familiar structure one is being taxed to support monarchy who “may” in turn provide for ones security if they are a “good”, or may simply take from one to support themselves if they are not. Therefore the Monarchy introduces a new reason for taxation, to support the sovereign. Now here is where I would digress I bit from the views held by Locke, embracing instead a view more properly held by Rousseau, being that a just society exist for no other reason then for the protection of one’s right and as soon as it ceases to do so it is no longer just and one immediately returns to a state of nature in regards to the sovereign and one’s fellow man. Given time I might be able to dream up a system of Monarchy that would be just in protecting one’s rights (say the current system technically in place in England for example) but generally speaking, Monarchy’s or any other scheme of governance where there is a superior sovereign above which this is no other, are prima facia unjust, but I digress (the phrase “give me liberty or give me death” comes to mind). Eventually, a republican form of society will arise where there is no sovereign because everyone is subject to the same laws of the land. The major change we see take place between early society and the republic form of society is a gradual shifting of the focus for the common existence of society from the “we” to the “I”. This shift is most pronounced in a Monarchy, if you are the monarch of course, but more properly in a Capitalistic form of society much like we have today. The tendency is lose focus upon why society exists in the first place, and that is for the preservation of the individual’s right (life, liberty and property, according to Locke, or life, liberty and the pursuit of happiness, according to Jefferson, not necessarily in the order given in either case) and for the promotion of the common good (which after nearly 4 pages, go ahead copy/paste this part over to word remembering to double space, brings us back to taxation). From what I have read here, most people agree that society necessary entails some form of taxation for its support. The extent to which taxation should be required is what is in question. There are those who support a very minimalist view in that the government should only take the very minimal needed to support bare bones necessities and no more. But what are the “bare bones” necessities of society? You see this is the problem, everyone has a different view about what the government should and should not be involved in providing for. Here I tend to side most closely with a Jeffersonian view of government (which should come as no surprise to those who have read my posts before). Government should safeguard my rights to (in this order) liberty, life, and the free pursuit (not right to, but right to pursue) happiness. As such there are a great many thing that government should undertake, public education being the chief of these. For you see, (as Jefferson oft noted) an educated public is the keystone to any republican form of society. I think a great deal of the problem debated today (often on this very bored) could be resolved by greater education of our society (but again I find myself digressing). National security of course is a must (can secure rights without it), as are public works projects. The list could go on and on of course but I think you get the idea. How these governmental undertakings would be best funded, of course, is another hot topic for debate. On the one hand you have the side that argues that those who have the most “property” for lack of a better term here, should pay the most toward public funds because they have gained the most from the benefits offered to them by society and have the most “excess property” to spare. On the other hand you have those who claim that everyone should be required to pay equal shares of their “property” because it is somehow unfair to require more from those who have more. There are of course different taxing schemes that purport to be more “fair” then others based upon one’s view of how taxes should be levied varying from straight tariffs (usually paid on “luxury” items, a round about way of taxing the rich by the way and functioning as a “graduated tax”) supported by our founders and the primary source of income for our country until 1913 and the adoption of the 16th Amendment (which by the way was introduced and promoted by Republicans), income tax (graduated or otherwise) which our founders were vehemently opposed to, “property” tax (taxation based upon the amount of assets one possessed, also opposed by our founders), real-estate tax (commonly called property tax), sales tax, and many other varying schemes (stamp tax etc.). Personally, I support a graduated income tax, period. Those with greater disposable income should pay more then those without or with less. Why? Because they not only have benefitted more from society then other but they also have a greater amount to lose if that society is not supported. Additionally, (partial) redistribution of wealth is necessary for maintaining a stable society for without a controlled redistribution of wealth from the top to the bottom what you end up with is with more and more wealth flowing to the top, with less and less being divided up amongst the bottom. This inevitably leads to revolution by the bottom against those hoarding the wealth and the destruction of society (don’t kid yourselves into believing it can’t happen here when if you look at history it has happened at some point to nearly every great civilization in the world and is commonly occurring in countries around the world today). Now then the final topic I want to address here is how the two (primary) sides view taxation. On the one hand you have the “liberals” who in addition to public works projects want to provide “social programs”. These “social programs” cover a broad rainbow of issues from art, public parks, unemployment, adult educations, etc. On the other hand you have the “conservatives” who claim (claim being the operative word) that government should only take what is necessary to provide the bare necessities for society and leave the “social programs” to private individuals. You see the problem is that while the “liberals” come right out and tell you where they are going to spend your money and why, the “conservatives” claim they are going to save you money and then spend it anyway. Its not lying exactly, its just not being forthcoming in their true intentions. Example: Bush claims the traditional republican stance of lower taxes, cutting pork spending, and that the rich shouldn’t be charged significantly more then the poor in taxed simply because they have more excess resources. But here he is trying to have his cake and eat it to. Let me explain. Under Bush’s new tax plan, the average family in America was given addition tax credits to reduce the amount they were required to pay in federal income tax. One of the largest of these credits is the “child credit”. So then take two average families. The average family has consists of about 4 ½ persons and combined income is about $58,000. Presuming that this is the “classic” family unit that equals out to be Mom, Dad, and 2 ½ children. Now then, take another family, say me and my wife (our present combined income is somewhat sort of the national average but that is because I returned to school to further my education and we are living on one income, but for the sake of this example lets presume that the incomes are equal). Now then, your classic family is going to pay less in income tax then me and my wife. Why? Well thanks in large part to the child credit. Although the classic family will be using up much more social programs then my wife and I will, we will pay for more of it then they will because we have a greater amount of excess income. So people, this is about as close to and apples to apples example as I can give, under the traditional “conservative” income tax scheme, families who use more of societies governmentally funded social programs will pay less then families who use less. Talk about robbing from one side to give to the other. How are they able to get away with such trickery? Well you have to understand that the “conservatives” primary base is “family values”, so you see its all in how you package taxation for resell to the masses. It is ok to tax me and my wife more because of our excess, but it is not ok to tax Bill Gates more for his excess, because will all the vast amounts of money he has, some of it will trickle down eventually (but again I digress). The primary problem I see in the disconnect between “liberals” and “conservatives” view on taxation is a matter of degree. It is between the rural viewpoint and the urban viewpoint (I’m sure you have all seen the map of red and blue America). Growing up in very rural America in a very red portion of the country I was indoctrinated with the rural conservative view of society. You see ( and I’m most of you who also grew up in rural America or live there now would agree) there lies a fundamental difference in world views. In rural America there is still a great sense of the “we” in society. If your neighbor is in trouble and needs some help, you go help him, its just what you do. Having lived a good portion of my life now in urban areas I can tell you that often times you are lucky to even know who your neighbor is, let alone if they are in any sort of trouble. In the country if you fall on hard times and your family runs out of food, the community will often come together and make sure you are fed until you can get back on your feet again. In urban society this tasks falls upon those “social charity programs” that conservatives complain about so much. In rural America if you can’t pay your bills with “currency” you can still usually work out some form of barter system to get the goods and services you need (example: my father ran a small tax accounting practice for many years, many of his clients were unable to pay his fees with currency so instead they would trade him crops, meets, or exchange services. One example is when a rancher had a rather lengthy audit by the IRS. This rancher ran a fairly large operation and was a millionaire many times over on paper, but in reality didn’t have dime to his name. So in exchange for my father’s work the rancher gave my dad a entire side of beef, already processed and stored at the local meet locker. Now there is now way my family could have used an entire side of beef, so my dad traded half of it to a local mechanic for repairing our truck. Try doing that in a city). Ironically, if you follow where most of the money goes, it is often those who are against high taxes and graduated taxation of the rich, who receive the most benefits from these vary same “social programs”. Farmers and small businesses would be hosed were it not for governmental subsidy resulting in price controls. The “family value” constituency would be in for a real shock if they were required to pay for all the goods and services that they consumed from “social programs”. So in short, while I do not necessarily support a robbing from Peter to pay Paul sort of tax system, it is fair to require those with greater excess to contribute more for the greater good. I just wish people would wake up to what it is they are truly receiving and ask themselves are they willing to live without it? If not, then pony up on tax day and quit your complaining.

12-04-2004, 03:57 PM	#55 (permalink)
stevo Rail Baron Location: Tallyfla	Isn't economics fun?