BF2S Forums Taxes increase or Spendings cut?

Spending cuts - no thanks. We need serious infrastructural development for many years to come and our healthcare system is under serious pressure right now. I won't be happy until I see a subway to Dublin airport and motorways linking Dublin to Cork, Galway and Limerick.

Last edited by CameronPoe (2008-01-11 06:56:52)

sergeriver wrote:

I know most people will say spendings cut, but in which areas would you reduce the spendings?  Is it possible to help the economy cutting taxes?

Reaganomics?

It helps is the source of the problem is with the producers lacking capital investment, and not the consumers.

I would cut spending on pork projects and subsidies to otherwise failing industries , and raise taxes on the higher income groups (if you make 500 million a year, who cares if the government taxes you 100 million a year, you're still rich as all hell)

Neither are necessary really.  A government just needs to spend our money more efficiently and allocate budgets more effectively.  Missing the odd war here and there might save a few pennies as well.

Your poll is biased against tax cuts.

How does it help the wage earner by punishing the wage payer?  The rich people are the ones who hire the poor people in this world.

Best answer: don't raise minimum wage.  Let the free market determine as much as possible.  Get rid of Unions.

All of these would lead to the best economy in the long run, without a doubt.

I will post this, and then go into a detailed explanation of what I mean, after I put some Ramen noodles in the Microwave. 

G3|Genius wrote:

Your poll is biased against tax cuts.

How does it help the wage earner by punishing the wage payer?  The rich people are the ones who hire the poor people in this world.

Best answer: don't raise minimum wage.  Let the free market determine as much as possible.  Get rid of Unions.

All of these would lead to the best economy in the long run, without a doubt.

I will post this, and then go into a detailed explanation of what I mean, after I put some Ramen noodles in the Microwave. 

Getting rid of unions would be a complete disaster for the majority of the populace. Expect a dive in median wages, crappy job security, poor worker rights, etc. etc.

Look at the US from the 70s to the current day for example. Reganomics was terrible for the average Ameican. It moved US workers from best paid in the world to worst paid in the industrial world with the worst labour rights, a complete death of job security and a massive assault on the human right to form a union.

As far as `how does it help wage earners by tax increases?`, if everyone's taxes go up by a fixed percentage, the bulk of the extra money gained by the government comes from the rich and their high incomes. If this money is then spent on something that benefits everyone, eg, health, police, fire dept., social security, public transport or whatever everyone gains equally. Ultimately the majority of the people get more money's worth of benefit than if everyone paid for it themselves.

The trickle down effect is a big fat pile of bullshit founded neither in reasonable theory or even remotely in reality. It's simply a convinient blanket to use to convince people to accept tax cuts for the rich in the hope that the rich decide to use this extra money to do something useful that may benefit them at some point in the future.

http://www.nytimes.com/2007/04/12/business/12scene.html

How do we measure the economy?  Simple.  How much are people spending?  The more money people spend, the better the economy is.

Obviously, then, the key to having a healthy economy is making sure that people have enough money.  Where do people get their money?  Most of us get money from our jobs.  We went to work for a company owned by someone with money, and we said, "If you are willing to give me some of your money, I will help you make more money."

Now, part of human nature is to make sure that we ourselves are taken care of.  Your employer, the business owner, wants to make as much money for himself as he can.  You, the employee, also want to make as much money as you can.  Everybody wants to make as much money as they can.  Obviously. 

If an employer does not pay well enough, he will have a hard time holding onto employees, which means he will always need to be hiring new people, and never be able to run a truly efficient business.  If I have a toilet scrubbing business, and I hire people to scrub toilets for $100 an hour, would I get applicants?  Absolutely!  And they would stay with me for a long time, because they would be making more money than most people.  However, if I only pay minimum wage, will I get anyone to work with me?  Probably not.  I would have to pay someone significantly more in order to have them stay with me on the job.

The key for an employer to maximize his net income is to pay the least amount of money to be able to still run an efficient business.

OK.  Now, to answer my above question:  How does it help the wage earner by punishing the wage payer?

I am a partner in a Small Business along with my Father and my Uncle.  We own a Laser Tag facility in Northern NJ called Laser One, which opened 11 months ago.  I am an employer.

There is an age-old saying that goes "you have to spend money to make money."  This is definitely true.  The initial build-out for Laser One cost $750,000.00.  That is a ton of money, by most people's standards.  After we finished building it, we had to start to run the business, so we hired people.  We have about 30 teenagers on our payroll.  Our monthly labor cost is roughly $12,000.00.  On the payroll we have an Operations Manager who is on Salary, An assistant manager who is a college student making a couple bucks more than minimum wage, and a couple dozen minimum wage earners.

Now, fortunately, our business is doing well.  Most people lose money their first year in business, and we are fortunate enough to have come out on top.  Actually, we did better than we expected to do, and we made a few improvements to our facility.

When we bought our Laser Tag system, we bought the software and the computers, blah blah blah, and we bought 30 Laser Tag packs.  This is so that up to 30 people can play in our arena at one time.  However, during our busiest times, we would max out our arena and people would sometimes have to wait an hour to play, so we bought 10 more packs.

10 packs cost us $30,000.00.  We had to spend money to make money.

Now we get to the issue in your opening post.

If we start taxing the rich people, and take money away from them, they will have less money to invest (spend).  Let's take my business for an example.

New Jersey's minimum wage right now is $7.15.  There is legislation in the works to raise it to $8.50.  That is a 19% increase!  So we'll take our yearly labor cost and increase it by 19%.  $144,000.00*1.19=$27,360, maybe more after payroll taxes. 

Which means that we would not be able to make that $30,000 investment next year.

But how does this affect the economy?  Simple.  I have 33.33% more packs in my arena, which means that I can accomodate more people, and on my busiest times, people have a better experience, so they come back more often.  This generates more business for me, so I have to hire more people so that I can handle the higher volume of traffic coming into my store.

As employers need to higher more people, the lower the employment rate gets.  The lower the unemployment rate, the harder it is for an employer to find employees, the more he has to offer in order to get people to work for him so that he can run an efficient business and make money.

Now, what happens when the government says, "we're going to raise minimum wage."  This does not help me make more money at all.  As a matter of fact, it is making me less money.  So what do I do as an employer?  Just take a $30,000 hit?  I can't do that!  So I have to give my employees fewer hours, and raise my prices.  Ultimately, whenever you tax a business, you do not tax the business, you tax the consumer.  Remember when that dumb lady spilled McDonalds coffee in her lap, and won a multi-million dollar lawsuit?  McDonalds raised their prices after that.  WE paid that.

Anyway, the result of this is inflation.  With my prices higher than they were, $1.00 buys that much less stuff.  That, and since I have to cut back on the hours I give my employees, I keep only the best employees, and the weakest employees I have to let go.  And they raise the unemployment rate.

This begs the question: why, then, do they keep raising minimum wage?  It isn't to help your average high school student.  It isn't to help the business owner.  It's to help the Unions.

Most Union Charters have written clearly that when minimum wage goes up, the Union worker's wages go up accordingly.  Obviously the Union Workers love this: they get more money for doing the same exact amount of work!  And because they like this so much, they keep electing the officials who raise minimum wage.

The answer is, it's a very easy way to buy votes.  This is why Unions overwhelmingly vote Democrat.  Democrats raise taxes, raise minimum wage.  It's a beautiful symbiotic relationship.

Unions ruin business.  We see what they are doing right now with the writer's strike.  Those of us in the NY Metropolitan area see all the time what happens when mass transit workers strike.  Unions interfere with the natural course of economics.

This is how you stimulate an economy: Keep the minimum wage low.  This is number one.  And decrease the amount of influence Unions have in politics.

G3|Genius wrote:

How do we measure the economy?  Simple.  How much are people spending?  The more money people spend, the better the economy is.

Obviously, then, the key to having a healthy economy is making sure that people have enough money.  Where do people get their money?  Most of us get money from our jobs.  We went to work for a company owned by someone with money, and we said, "If you are willing to give me some of your money, I will help you make more money."

Now, part of human nature is to make sure that we ourselves are taken care of.  Your employer, the business owner, wants to make as much money for himself as he can.  You, the employee, also want to make as much money as you can.  Everybody wants to make as much money as they can.  Obviously. 

If an employer does not pay well enough, he will have a hard time holding onto employees, which means he will always need to be hiring new people, and never be able to run a truly efficient business.  If I have a toilet scrubbing business, and I hire people to scrub toilets for $100 an hour, would I get applicants?  Absolutely!  And they would stay with me for a long time, because they would be making more money than most people.  However, if I only pay minimum wage, will I get anyone to work with me?  Probably not.  I would have to pay someone significantly more in order to have them stay with me on the job.

The key for an employer to maximize his net income is to pay the least amount of money to be able to still run an efficient business.

OK.  Now, to answer my above question:  How does it help the wage earner by punishing the wage payer?

I am a partner in a Small Business along with my Father and my Uncle.  We own a Laser Tag facility in Northern NJ called Laser One, which opened 11 months ago.  I am an employer.

There is an age-old saying that goes "you have to spend money to make money."  This is definitely true.  The initial build-out for Laser One cost $750,000.00.  That is a ton of money, by most people's standards.  After we finished building it, we had to start to run the business, so we hired people.  We have about 30 teenagers on our payroll.  Our monthly labor cost is roughly $12,000.00.  On the payroll we have an Operations Manager who is on Salary, An assistant manager who is a college student making a couple bucks more than minimum wage, and a couple dozen minimum wage earners.

Now, fortunately, our business is doing well.  Most people lose money their first year in business, and we are fortunate enough to have come out on top.  Actually, we did better than we expected to do, and we made a few improvements to our facility.

When we bought our Laser Tag system, we bought the software and the computers, blah blah blah, and we bought 30 Laser Tag packs.  This is so that up to 30 people can play in our arena at one time.  However, during our busiest times, we would max out our arena and people would sometimes have to wait an hour to play, so we bought 10 more packs.

10 packs cost us $30,000.00.  We had to spend money to make money.

Now we get to the issue in your opening post.

If we start taxing the rich people, and take money away from them, they will have less money to invest (spend).  Let's take my business for an example.

New Jersey's minimum wage right now is $7.15.  There is legislation in the works to raise it to $8.50.  That is a 19% increase!  So we'll take our yearly labor cost and increase it by 19%.  $144,000.00*1.19=$27,360, maybe more after payroll taxes. 

Which means that we would not be able to make that $30,000 investment next year.

But how does this affect the economy?  Simple.  I have 33.33% more packs in my arena, which means that I can accomodate more people, and on my busiest times, people have a better experience, so they come back more often.  This generates more business for me, so I have to hire more people so that I can handle the higher volume of traffic coming into my store.

As employers need to higher more people, the lower the employment rate gets.  The lower the unemployment rate, the harder it is for an employer to find employees, the more he has to offer in order to get people to work for him so that he can run an efficient business and make money.

Now, what happens when the government says, "we're going to raise minimum wage."  This does not help me make more money at all.  As a matter of fact, it is making me less money.  So what do I do as an employer?  Just take a $30,000 hit?  I can't do that!  So I have to give my employees fewer hours, and raise my prices.  Ultimately, whenever you tax a business, you do not tax the business, you tax the consumer.  Remember when that dumb lady spilled McDonalds coffee in her lap, and won a multi-million dollar lawsuit?  McDonalds raised their prices after that.  WE paid that.

Anyway, the result of this is inflation.  With my prices higher than they were, $1.00 buys that much less stuff.  That, and since I have to cut back on the hours I give my employees, I keep only the best employees, and the weakest employees I have to let go.  And they raise the unemployment rate.

This begs the question: why, then, do they keep raising minimum wage?  It isn't to help your average high school student.  It isn't to help the business owner.  It's to help the Unions.

Most Union Charters have written clearly that when minimum wage goes up, the Union worker's wages go up accordingly.  Obviously the Union Workers love this: they get more money for doing the same exact amount of work!  And because they like this so much, they keep electing the officials who raise minimum wage.

The answer is, it's a very easy way to buy votes.  This is why Unions overwhelmingly vote Democrat.  Democrats raise taxes, raise minimum wage.  It's a beautiful symbiotic relationship.

Unions ruin business.  We see what they are doing right now with the writer's strike.  Those of us in the NY Metropolitan area see all the time what happens when mass transit workers strike.  Unions interfere with the natural course of economics.

This is how you stimulate an economy: Keep the minimum wage low.  This is number one.  And decrease the amount of influence Unions have in politics.

The minimum wage is not good economics, on that I will agree. But at the end of the day lowering the minimum wage is hardly likely to increase public funds - people will take a step decrease in earnings, thus decreasing tax take from them and there are vastly more employees than employers so a mismatch will occur given that the tax take from employers couldn't possibly make up the shortfall - so at the end of the day you are simply advocating cutting spending.

Last edited by CameronPoe (2008-01-11 08:29:07)

G3|Genius wrote:

CameronPoe wrote:

Or not as the case may be. Investing in the third world instead of the home nation FTW!

Which is a rich nation giving money to a poor nation.  Go on...

At the expense of the underclasses in your own nation. Go on...

G3|Genius wrote:

I'm saying, if we raise the amount of money an individual makes by letting the market determine itself, we will not need to raise taxes because the overall gross income of the individual will go up.

You are assuming that a free market will result in maximisation of what a person earns, which with your abolition of a minimum wage is almost certainly incorrect. In fact it just hands employers the money that the employees once made, which they can choose to not reinvest in their own economy (or invest in a foreign economy as most big corporations are doing these days in the likes of China and India).

Ive got job security regardless of the state of the economy

Pug wrote:

Other

Which is?
Myself, i picked tax increase, we will always have money, the country needs us, think of the NHS, free, quality healthcare, or costly, quality healthcare?

PureFodder wrote:

Raise minimum wages -> people with more money -> people spending more money -> stimulation of weak demand -> companies selling more things, expanding, more jobs etc.

Disagree. Raising mininum wages is not progressive. It should be a last resort. It warps the supply and demand relationship for a start which is never good. Having said that - no one answer is correct, different measures are appropriate for different situations at different times, and the economy is a complex beast that constantly needs to be maintained.

Last edited by CameronPoe (2008-01-11 09:09:43)

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