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Playing devil's advocate, what happens to businesses in the presence of an even higher regulatory and tax environment and what will the impact of increased taxe
by floppydisk 11y ago
Playing devil's advocate, what happens to businesses in the presence of an even higher regulatory and tax environment and what will the impact of increased taxes be on employment and business viability as well as the cost of living?
For the sake of argument, think about businesses with razor thin margins like restaurants. In the presence of increased taxes, their margins significantly diminish, if not vanish, and it becomes increasingly unviable for the business to stay in business. Once they shutter their doors, the tax base and employment decreases. Extending the argument, consider other organizations that have a healthier margin and are growing and hiring. The presence of substantially increased taxation raises the costs of growth (re: hiring) and raises the costs of employing Americans and earning money in America which reduces their ability to compensate employees / develop new products etc. Yes, they might have the margin to pay the increased tax rate, but the tradeoff is they lose money that goes into R&D, increasing salaries, hiring more people, and other business activities we think are good and useful.
As a consumer, I'm also curious to know what this does to my cost of living. Prices will not stay static and if businesses are incurring higher costs to produce goods and services, those get reflected in price. Given wages aren't keeping pace with inflation, what will a sudden price shock do to the cost of living in the face of businesses adjusting prices to address the new taxes? This could take people who are getting by now and turn them into a new wave of impoverished as necessary goods and services increase in price or it could prevent UBI from achieving its goal because prices keep rising to offset the tax rate which puts goods and services outside what people can afford on UBI.
- ricardobeat 11y ago> For the sake of argument, think about businesses with razor thin margins like restaurants. In the presence of increased taxes, their margins significantly diminish, if not vanish, and it becomes increasingly unviable for the business to stay in business. Once they shutter their doors, the tax base and employment decreases. That's a big assumption. As long as there is demand in a free market, they will stay in business and prices will adjust accordingly. Or not, since they might get more business from all these people who now have a minimum income. Also consider that the trend is for operational costs to go down with continued automation of the whole production chain.
- brbsix 11y agoThe OP's point about certain businesses disappearing is valid. Just as an example, pizza parlors may disappear. Instead that demand will be satiated by highly efficient instant delivery services (with no storefront and almost no staff) or perhaps not at all. Do you see many elevator attendants lately? Also to be clear, we're not talking about anything remotely like a free market.
- rm_-rf_slash 11y agoMost restaurants derive most of their cost from labor. With basic income in and minimum wage out, you can pay people much less than you had to before. Yes, you may pay more in taxes, but that's from profit after everything else has been taken care of. So if you end up with less total profit than before, it sucks, but your control over the situation is far more variable than if you had to simply suck it up and plan to pay your $9.00/hr dishwasher at least $15/hr in three years.
- home_boi 11y agoIt's the opposite. The utility of money decreases as the amount of money owned/earned goes up. $9/hr to a person without basic income is worth more than $9/hr to a person with basic income. Now people need more money to gain the same utility as they could have previously gained without basic income. Why would people wash dishes if they didn't need to pay the bills?
- rm_-rf_slash 11y agoSure, a dishwasher might not need to work to pay for rent and heat, but... Can they afford nice clothing to attract people they like? Can they save up for college? For their kids? Can they play the latest games? See the latest movies? Do they enjoy cigarettes, alcohol, or other recreational drugs? Do they like to eat out? Do they want a higher standard of living when they "retire?"
- home_boi 11y agoPeople would be less willing to work for those goods than for rent and heat, so employers would have to pay higher wages.
- ambicapter 11y agoThose people sound useless. The same way its less expensive to house the homeless than to chase around with cops, I feel like its better to just pay them to stay in their own little world.