Taxes are Orthogonal to Wages

2012-05-17 08:16:24 by jdixon

I've been reading about taxing the rich and high unemployment and how the middle class is dying for as long as I can remember. What no one seems to be talking about is that these problems are orthogonal, not causal. Raising the taxes on billionaires is not going to buoy the middle class' ability to buy a new car. And neither will lowering taxes on the rich have the adverse affect. We're no more likely to see a trickle down effect from the government raising taxes as we are from lowering them.

What we really should be asking is what can we do to motivate business owners to increase employee wages without regulation? I'm not sure there is a good answer for that. I think this is a systemic problem within our upper class, one tied to a sense of privilege and a lack of personal responsibility to community.

I don't have any answers. I just wanted to get these thoughts down and see what others think.

Comments

at 2012-05-18 09:58:59, Michael Gorsuch wrote in to say...

I can't help but wonder if the business owners can afford to increase wages, and if so, by how much? My intuition (for whatever that's worth) has me thinking that business is not quite as profitable in the most common sectors as it used to be.

at 2012-05-22 04:53:43, Jim Bailey wrote in to say...

I am wondering if you have seen this http://bit.ly/Kay6ZS the answer is you won't but you can reduce the friction conflict such legislation will cause by conversations like this. Unfortunately the Anarchist utopia I am working quietly to wards is still some centuries away.

at 2013-01-02 13:56:04, TP wrote in to say...

Nice blog. I would not normally comment on this kind of post but here goes.

It doesn't matter.

There are going to be winners and losers in society. When you raise wages across the board whether it is a government mandated minimum wage or if employers just feel all giddy and raise it. It will be all well and good until inflation strikes. Employers increase wages, employers wants to net X per year. Employer raises prices of service to net X per year.

After a while we are back to where we started from and everyone wants to raise the minimum wage again.

http://www.cato.org/pubs/pas/pa106.html

Again, nice blog!

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