If minimum wage were raised ...

[Againsheila]

 

[OnePercenter]

Did you pull that number out of thin air, or just make it up?

As for strangling regulations, here is one example.

Here's Walmart's numbers. Do the math.

WMT Annual Income Statement - Wal-Mart Stores Inc. Annual Financials

Your example is an underfunded business. Try again.

Perhaps you should walk me through your version of the math. Even if I go really stupid, and assume that they pay income on the entire $446.95 billion they earned last year, and then assumed that $5.34 billion they paid in income taxes was their entire tax burden, I come up with a tax rate that is exactly 100 times higher than the one you have. In other words, not only would I have to not know that no one pays taxes on their revenue, I would also have to not know how to figure percentages.

XXXXXXX

Sure. 7.94B ÷ 446.95B = 0.017764850654435619196778163105493

Anything else?

 

[BillyZane]

Here's Walmart's numbers. Do the math.

WMT Annual Income Statement - Wal-Mart Stores Inc. Annual Financials

Your example is an underfunded business. Try again.

Perhaps you should walk me through your version of the math. Even if I go really stupid, and assume that they pay income on the entire $446.95 billion they earned last year, and then assumed that $5.34 billion they paid in income taxes was their entire tax burden, I come up with a tax rate that is exactly 100 times higher than the one you have. In other words, not only would I have to not know that no one pays taxes on their revenue, I would also have to not know how to figure percentages.

XXXXXXX

Sure. 7.94B ÷ 446.95B = 0.017764850654435619196778163105493

Anything else?

You divided backwards there bud It would be $446.9B / $7.94B = for roughly 5.6%

 

[Dragonlady]

Walmart, and other corporations, pay taxes on their NET income, not their gross income. Walmart paid an effective tax rate of 31%, based on their net income.

 

[BillyZane]

Walmart, and other corporations, pay taxes on their NET income, not their gross income. Walmart paid an effective tax rate of 31%, based on their net income.

What on God's green Earth does that have to do with the minimum wage? I mean Wal Mart certainly didn't cut back on executive compensation because of their taxes.

With $16B in net profits for the year, a person would be hard pressed to argue that Wal Mart couldn't afford to raise hourly wages a little.

And further, if wages were higher and welfare subsidies were lower, perhaps EVERYONE'S taxes would go down, including Wal Marts.

But I'd bet you this. Ask Wal Mart if they would trade a $10 an hour min wage for a 20% tax rate , and I bet their accountants would turn that down right fast.

 

[OnePercenter]

Perhaps you should walk me through your version of the math. Even if I go really stupid, and assume that they pay income on the entire $446.95 billion they earned last year, and then assumed that $5.34 billion they paid in income taxes was their entire tax burden, I come up with a tax rate that is exactly 100 times higher than the one you have. In other words, not only would I have to not know that no one pays taxes on their revenue, I would also have to not know how to figure percentages.

XXXXXXX

Sure. 7.94B ÷ 446.95B = 0.017764850654435619196778163105493

Anything else?

You divided backwards there bud It would be $446.9B / $7.94B = for roughly 5.6%

For corporations, the effective tax rate is computed by dividing total tax expenses by the firm's earnings before taxes.

Effective Tax Rate Definition | Investopedia

So Walmart's effective tax for 2012 is 7.94B divided by 446.95B = 0.02

 

[OnePercenter]

Walmart, and other corporations, pay taxes on their NET income, not their gross income. Walmart paid an effective tax rate of 31%, based on their net income.

Effective tax is total taxes divided by total income. For Walmart it's 2%. For the average married couple it's 12%.

 

[Quantum Windbag]

Here's Walmart's numbers. Do the math.

WMT Annual Income Statement - Wal-Mart Stores Inc. Annual Financials

Your example is an underfunded business. Try again.

Perhaps you should walk me through your version of the math. Even if I go really stupid, and assume that they pay income on the entire $446.95 billion they earned last year, and then assumed that $5.34 billion they paid in income taxes was their entire tax burden, I come up with a tax rate that is exactly 100 times higher than the one you have. In other words, not only would I have to not know that no one pays taxes on their revenue, I would also have to not know how to figure percentages.

XXXXXXX

Sure. 7.94B ÷ 446.95B = 0.017764850654435619196778163105493

Anything else?

Which is approximately 1.8%, not 0.01%, which is what you claimed.

 

[asterism]

Sure. 7.94B ÷ 446.95B = 0.017764850654435619196778163105493

Anything else?

You divided backwards there bud It would be $446.9B / $7.94B = for roughly 5.6%

For corporations, the effective tax rate is computed by dividing total tax expenses by the firm's earnings before taxes.

Effective Tax Rate Definition | Investopedia

So Walmart's effective tax for 2012 is 7.94B divided by 446.95B = 0.02

Are you honestly going to say that Wal Mart hat $447 Billion in EARNINGS?




That's some funny stuff there. So riddle me this, oh Captain of Industry, what was Wal Mart's Revenue? You claim they had earnings of $446.95B in earnings.

 

[asterism]

Walmart, and other corporations, pay taxes on their NET income, not their gross income. Walmart paid an effective tax rate of 31%, based on their net income.

Effective tax is total taxes divided by total income. For Walmart it's 2%. For the average married couple it's 12%.

Correct, income not revenue. The average married couple doesn't have COGS. You're clearly not a very educated "one percenter." No wonder you're a liberal.

 

[Care4all]

Walmart, and other corporations, pay taxes on their NET income, not their gross income. Walmart paid an effective tax rate of 31%, based on their net income.

Effective tax is total taxes divided by total income. For Walmart it's 2%. For the average married couple it's 12%.

Correct, income not revenue. The average married couple doesn't have COGS. You're clearly not a very educated "one percenter." No wonder you're a liberal.

but they do have elecetric bills and heat bills and water bills, and sometimes lawn maintenance and repair of their homes, and the costs of maids, costs of leasing or buying a car etc etc etc....which are expenses that are similar to businesses, that businesses can write off....effective rates are not comparable between individuals and business UNLESS you calculate taxes on the gross income revenues of both imho.....it may not be defined or calculated that way but to compare, equally and fairly, it should be...again, imo.

We are BOTH, the individual and the business, suppose to pay taxes only on our PROFITS....yet, from what I have read, 60% of all tax filers, only use the short form.....? And maybe that is what the standard deduction is for....???? the deduction from our income....??? but it is NOT nearly enough to cover what it takes.....and having all those individuals filing the short form, no matter the income, only to have operating expenses equal to the one FLAT standard deduction amount is insane.....for the gvt to use that net as our profits, on the individual

 

[OnePercenter]

Effective tax is total taxes divided by total income. For Walmart it's 2%. For the average married couple it's 12%.

Correct, income not revenue. The average married couple doesn't have COGS. You're clearly not a very educated "one percenter." No wonder you're a liberal.

but they do have elecetric bills and heat bills and water bills, and sometimes lawn maintenance and repair of their homes, and the costs of maids, costs of leasing or buying a car etc etc etc....which are expenses that are similar to businesses, that businesses can write off....effective rates are not comparable between individuals and business UNLESS you calculate taxes on the gross income revenues of both imho.....it may not be defined or calculated that way but to compare, equally and fairly, it should be...again, imo.

We are BOTH, the individual and the business, suppose to pay taxes only on our PROFITS....yet, from what I have read, 60% of all tax filers, only use the short form.....? And maybe that is what the standard deduction is for....???? the deduction from our income....??? but it is NOT nearly enough to cover what it takes.....and having all those individuals filing the short form, no matter the income, only to have operating expenses equal to the one FLAT standard deduction amount is insane.....for the gvt to use that net as our profits, on the individual

You've missed the point. Effective tax rates are to compare (apples to apples) two or more taxable entities.

 

[OnePercenter]

You divided backwards there bud It would be $446.9B / $7.94B = for roughly 5.6%

For corporations, the effective tax rate is computed by dividing total tax expenses by the firm's earnings before taxes.

Effective Tax Rate Definition | Investopedia

So Walmart's effective tax for 2012 is 7.94B divided by 446.95B = 0.02

Are you honestly going to say that Wal Mart hat $447 Billion in EARNINGS?




That's some funny stuff there. So riddle me this, oh Captain of Industry, what was Wal Mart's Revenue? You claim they had earnings of $446.95B in earnings.

Actually that's from Wal-Mart Stores Inc. Annual Financials.

 

[OnePercenter]

Perhaps you should walk me through your version of the math. Even if I go really stupid, and assume that they pay income on the entire $446.95 billion they earned last year, and then assumed that $5.34 billion they paid in income taxes was their entire tax burden, I come up with a tax rate that is exactly 100 times higher than the one you have. In other words, not only would I have to not know that no one pays taxes on their revenue, I would also have to not know how to figure percentages.

XXXXXXX

Sure. 7.94B ÷ 446.95B = 0.017764850654435619196778163105493

Anything else?

Which is approximately 1.8%, not 0.01%, which is what you claimed.

Is that the new RWN math?

 

[OnePercenter]

Walmart, and other corporations, pay taxes on their NET income, not their gross income. Walmart paid an effective tax rate of 31%, based on their net income.

Effective tax is total taxes divided by total income. For Walmart it's 2%. For the average married couple it's 12%.

Correct, income not revenue. The average married couple doesn't have COGS. You're clearly not a very educated "one percenter." No wonder you're a liberal.

Income/total income/revenue are the same thing.

 

[hunarcy]

Walmart, and other corporations, pay taxes on their NET income, not their gross income. Walmart paid an effective tax rate of 31%, based on their net income.

While Obama's supporters over at GE paid ZERO in 2010. Don't see much commentary on that.

General Electric Paid No Federal Taxes in 2010 - ABC News

 

[OnePercenter]

Walmart, and other corporations, pay taxes on their NET income, not their gross income. Walmart paid an effective tax rate of 31%, based on their net income.

While Obama's supporters over at GE paid ZERO in 2010. Don't see much commentary on that.

Answer this: How much of the ability for GE to do this came from Republicans? Then you'll have your answer.

 

[itfitzme]

If the minimum wage was raised in a year the effect would be non existent.

So no jobs would go overseas because of the raise?

Or would the job loss and the job creation balance out?

This would happen if you mandated a "Living Wage"


1) Normal Goods
a. Businesses dealing in normal goods will see an increased demand in sales. In the short term there will be a limited number of these goods, and thus, the increased demand will create a sharp increase of prices.

b. Businesses dealing in normal goods will need to buy more supplies/raw materials to keep up with the demand for their finished goods. The increased demand in supplies/raw materials will likewise raise sharply the prices of supplies/raw materials.

c. Businesses dealing in normal goods will need to hire more workers to keep up with the increased demand. They will do so hesitantly, as the cost of labor has likewise increased. A higher amount of scrutiny will be applied to job applicants as the applicants work experience must justify the new wage.

Ever wonder why we no longer have high school students gaining work experience servicing cars and filling tanks at service stations for small wages and tips? Blame the minimum wage. And fuel is a necessity good.

a. In the short run, the increased demand for normal goods cannot be supplied by U.S. firms. Therefore, we will rely more heavily on imports. This will skew the balance of trade further out of our favor, and therefore, increase the national debt. See section 5 for further analysis on imports.

2) Inferior Goods
a. Businesses dealing in inferior goods will see an immediate decline in demand combined with their shareholders selling their stock. Millions would lose their jobs. The vast majority of employees will not gain employment until the pricing adjustments in the markets settle.

3) Small Businesses
a. Small businesses will not be able to afford the increased price of labor, combined with the increased price of raw materials/supplies. They will simply shut their doors. Small corporations will likewise see their stock plummet and millions will lose their jobs. Large corporations with a lot of reserve capital and large amounts of credit will be able to run deficits in the short run, filling and expanding in the vacuum left by small businesses and small corporations in the long run.

4) Wages
a. Let’s just say for example that the new “living” minimum wage is double the current federal minimum wage: $7.25 x 2= $14.5/hr (+-$30,160 per year). The people who would supposedly benefit the most would be low skilled workers right? Now what about the moderate skilled workers who were making $15/hr already? Would they sweat in the hot sun all day as a construction worker if they knew they could make the same stocking shelves at Wal-Mart? Would they freeze in the winter as an HVAC repairman crawling under people’s houses if they could make the same amount sweeping the floors as a janitor? Would you? Employers dealing in construction, heating/air, plumbing, etc., will need to considerably increase wages to keep their staff on board. Indeed, all skilled labor employers would need to increase the wages of their workers in order to remain competitive in the market for skilled labor, or else, their competitors will grab them. Moreover, high skilled labor would need to increase their pay and benefits.

5) Imports

a. In the short run the new demand for goods and services cannot possibly keep up with the increased demand for normal goods. Those goods will need to be imported if consumer demand is to be met. Thereby, the balance of trade will push the United States further into debt.

b. The increased demand for imports will likewise increase the price for imported goods. Poorer countries would not be able to compete with the United States, and therefore, the result would be more world poverty. Indeed, overseas firms that can make a higher dollar from the increase in U.S. demand will gladly sell to us as opposed to poorer countries that pay less.

This would not be unlike when the U.S. incentivized the production of ethanol, making the production of corn more popular to U.S. based rice farmers. As we filled the gap by importing rice from foreign countries, other countries such as the Philippines had food riots.

Note: increasing tariffs on imports in an attempt to punish foreign competitors will have a reverse effect of further increasing the prices of our limited domestic goods and services.

c. Having established that the increased demand for raw materials will be met from imports, investors will invest heavily in the expansion of overseas firms to produce those imports. With the new minimum wage at 14.50 combined with the highest corporate tax rate in the world, corporations dealing in raw materials are incentivized more than ever before to outsource jobs where the taxes are low, the labor is cheap, and the regulatory environment is more advantageous.

d. There is good news. Some foreign overseas workers will see an increase in jobs and a decrease in unemployment. If the decrease in unemployment is enough, the demand for labor will increase wages and befits for their workers.

It would not be unlike Taiwan, Singapore, Hong Kong, or South Korea during the 70’s 80’s and 90’s whereas they experienced rapid economic growth and became “Tiger Economies.”

6) Assuming that the “living” minimum wage were to work.

a. You would see a decline in college graduates. The largest motivating factor to become educated is so that a future worker can increase his/her marketability in the job market. If a person could make a reasonable living simply by graduating high school, or even dropping out of high school, he or she has lost much of the incentive to seek higher education or become more skilled. This would pollute the workforce with low skilled labor creating an environment of which the U.S. economy falls behind the rest of the world.


Important Note: I did not truly go into the effects of doubling the labor costs of all minimum wage businesses, and the contributions of $2,307.24 in addition to the full time minimum wage salary of $30,160 per year. (The employer must match your 6.2% Social Security Tax and your 1.45% Medicare tax). So one employee on a “living” minimum wage at $14.5/hr. comes to roughly $32,467.64 per annum. Then the business needs to worry about federal and state taxes, rent, electricity, advertising, legal fees, water, supplies/materials, training, maintenance/repair, interest on loans, insurance, perhaps franchise fees, & etcetera. If you want to take it a step further think about 401K, paid vacation, healthcare, education benefits, and maternity leave, among other perks. The cost of all of this will skyrocket.

Conclusion: The disparity of wealth will still be there, the prices of goods and service will
increase, and in the long run we still have the same, probably more, amount of poverty we started off with. In the interim, however, we accomplished the following:

1) The new poverty line (100% poverty level) is $22,980 per year as opposed to the original $11,490 for a single person.
2) The Consumer Price Index has perhaps doubled if not more.
3) The national debt skyrocketed due to a disadvantageous balance of trade.
4) The rate of overseas investment and outsourced jobs dramatically increased.
5) High unemployment.
6) An increased market share for large corporations at the expense of small corporations and small businesses.

If you can get around all these problems then go ahead, institute a “living minimum wage.”

That is all nice for one scenario given the "all other things being what they are" assumptions hold.

The reason education level requirements have increased has nothing to do with wages. It has to do with the increase in education levels. At one time, anyone could get a job as a teller at a bank, assuming you were not a creaton. Now, a bachelor's degree is often a deciding point. Why? Because as more and more people become educated, return on education declines. There was a time, in 1910, when a high school diploma would land you a management position.

It would be fun to go down your list and find definitive proof and disproof for each point.

Some seem credible, under specific conditions. Others, like "You would see a decline in college graduates. " are obviously incorrect.

The problem isn't the minimum wage level so much as the differential from low to high wages. The spread. It is the spread that has to change.

And, yeah, that absolute advantage problem with China is knarly.

The basic conditions are that GDP = PQ. No matter what you do, Q isn't gonna rise unless there are more workers, more hours, and more efficiency. Simply increasing the min wage isn't necessarily going to improve the problem unless either the massive losses in the work force recover and the income differential declines.

The minimum wage should never have been allowed to fall in real dollars in the first place. At a minimum, all other things being equal, it should be tied to COLA. That would at least eliminate the SNAP programs for minimum wage workers. If there are programs available to the labor force and min wage isn't pegged to COLA, then the simple effect is that wages will fall below the poverty level and programs will pick them up.

The reality of the economy, of the labor market, is that if someone can live off of collecting cans and sleeping under the freeway overpass, then someone will have to.

In the bigger picture, it really doesn't matter how low income earners put together their package of sustanance. It can be either all income, some income and programs, income programs and bartering. Whatever, it all comes out of the Q in GDP = PQ. In the long run, GDP = PQ = MV, and the V can be dropped. In the end, it isn't the price that matters, that is just a nominal variable. The real variables are quanity, labor hours, employment level, and efficiency.

We can play the game anyway we want to. Slavery, poverty level wage workers, or taxes balancing incomes and corporate profits. It all comes out the same.

How ever we cut it, Quantity divided by population has the identical average regardless of how it is distributed. And left to it's own devices, the bottom wage will be as low as it can go.

I like your list. It is well thought out, as a starting point. I hope to come back to it later. It is, though, only one of a number of ways things could go, depending on other circumstances. I am not sure if the list, in it's entirety, entirely internally compatable and consistent. My first impression is that some are true under one set of particular circumstances while others are true under other.

 

[FA_Q2]

If the minimum wage was raised, in a year everyone who was poor would be just as poor.

Probably correct.

So what?

You know who wouldn't be as poor? People like you and me who are paying taxes to go towards welfare for people who are being paid welfare wages.

I'd love for my taxes to be less. If that means McDonalds has to pay $10 per hour , than so be it.

You assume incorrectly that welfare would decrease with higher wages. That is false. After the market settles back down, $10 becomes the new $7 as prices reflect the changes. Those welfare benefits would need to change to reflect the new market realities. Without increasing those benefits you essentially achieve one thing – reducing the value of welfare.

If that is the goal then why bother with the wage increase, just reduce the benefits directly without all the other destructive practices that you are creating with arbitrary wage increases.

 

[Quantum Windbag]

Effective tax is total taxes divided by total income. For Walmart it's 2%. For the average married couple it's 12%.

Correct, income not revenue. The average married couple doesn't have COGS. You're clearly not a very educated "one percenter." No wonder you're a liberal.

but they do have elecetric bills and heat bills and water bills, and sometimes lawn maintenance and repair of their homes, and the costs of maids, costs of leasing or buying a car etc etc etc....which are expenses that are similar to businesses, that businesses can write off....effective rates are not comparable between individuals and business UNLESS you calculate taxes on the gross income revenues of both imho.....it may not be defined or calculated that way but to compare, equally and fairly, it should be...again, imo.

We are BOTH, the individual and the business, suppose to pay taxes only on our PROFITS....yet, from what I have read, 60% of all tax filers, only use the short form.....? And maybe that is what the standard deduction is for....???? the deduction from our income....??? but it is NOT nearly enough to cover what it takes.....and having all those individuals filing the short form, no matter the income, only to have operating expenses equal to the one FLAT standard deduction amount is insane.....for the gvt to use that net as our profits, on the individual

People make choices that negatively impact their taxes, and the way to fix that is punish the smart people? Are you sure you aren't a communist?