5 ms·

I find this to be credible - at some level, it'll certainly hurt. The problem as I see it is that some people say "aha, see, that doesn't work", but then stop

by davidw 9y ago

I find this to be credible - at some level, it'll certainly hurt. The problem as I see it is that some people say "aha, see, that doesn't work", but then stop there. There is a real problem in that some people (not all who make minimum wage, and not only those who make minimum wage) have real problems making ends meet. What's the best way to help them?

ithinkinstereo 9y ago
Increase social services funding by taxing the rich and closing tax-dodging loopholes (like capital gains, etc.).
- Stanleyc23 9y ago
  can you elaborate on this capital gains tax loophole?
  - dragonwriter 9y ago
    Long-term capital gains are taxed lower than normal generic income (at rates lower than the same person would pay in income tax) which in turn taxed lower than labor income (which is, in addition to regular income tax, subject to payroll tax.) Closing the capital gains tax loophole is, presumably, a reference to stopping some or all of this favorable treatment.
    - thehardsphere 9y ago
      1. That's not a "loophole", it's a deliberate feature of tax law. 2. Changing that would not do anything to solve this problem (even if you think it should be solved through more government spending, it wouldn't raise much money)
    - WalterBright 9y ago
      It's less of a loophole than one might think, because much of long term capital gains is illusory due to inflation.
    - Veelox 9y ago
      Just to make sure I understand you, you are advocating counting long-term capital gains as ordinary income?
      - dragonwriter 9y ago
        I'm explaining what it is likely the upthread poster was referring to when talking about closing the capital gains tax loophole, not advocating anything. (I have advocated better aligning the treatment of capital, labor, and generic other income, but the details involve more than just counting long-term capital gains as ordinary income.)
        Veelox 9y ago
        I missed that you were filling in for someone else, thank you for the explanation.
bradleyjg 9y ago
A UBI.
thehardsphere 9y ago
Don't take away the only entry point to employment in the economy that those people have until we actually have a good answer to that question.
- davidw 9y ago
  Part of my point is that some people very loudly point out the flaws of minimum wages - and they have some valid arguments - but them seem to hem and haw a lot about finding better solutions for that subset of people who are in real trouble.
  - thehardsphere 9y ago
    And my point is that, it is fine to want to help people, but doing something that clearly hurts them is not the right way to do that. Maybe those better solutions have the same dynamics. Economics is all about trade-offs; many of them are hard to evaluate and some of them are not worth making. Minimum Wage increases to $15/hour seem more and more to be not worth making.
    - topmonk 9y ago
      I think whether this hurts people, at least in the long run, depends, though. Taking a job which provides no on-the-job training, and takes no skill keeps someone where they are. Because they aren't learning anything they are stuck doing jobs at this level forever. If a person is prodded into learning a skill in order to reach the bottom($15/hour) rung, and then at the $15/hour level, the person is doing skilled work, they will be defacto receiving on-the-job training, since they are providing some skill. As long as there is a big enough social safety net, and access to resources like the library and the internet, unskilled and unemployed people will at least have the opportunity and a motive to learn. It's really too early to tell whether a higher minimum wage will result in a more skilled, educated populous in the long run. But it does fit the data that most (all?) first world countries have a relatively high minimum wage and social safety net. It could be argued that a high minimum wage is partly how they got there.
dtehranian 9y ago
Many have trouble making ends-meat because they lack skills that the market will pay for. Long term solution: Get more people skills that employers will pay for. Another solution to help low wage/low skilled workers, is a negative tax rate: https://en.wikipedia.org/wiki/Earned_income_tax_credit https://en.wikipedia.org/wiki/Earned_income_tax_credit
- bradleyjg 9y ago
  The problem with a negative income tax, especially when coupled with many other means tested programs at the state and federal level, is that you create a situation where there are very high effective marginal tax rates. Sometimes even exceeding 100%.
miguelrochefort 9y ago
People really need to be more frugal.
tim333 9y ago
Dunno the best way but there are a lot of things that can be done and have been tried in various countries. Negative income tax, free healthcare and education, social or subsidised housing and so on. Maybe in the future basic income will be a thing.

by davidw 9y ago

ithinkinstereo 9y ago

Increase social services funding by taxing the rich and closing tax-dodging loopholes (like capital gains, etc.).

Stanleyc23 9y ago
can you elaborate on this capital gains tax loophole?
- dragonwriter 9y ago
  Long-term capital gains are taxed lower than normal generic income (at rates lower than the same person would pay in income tax) which in turn taxed lower than labor income (which is, in addition to regular income tax, subject to payroll tax.) Closing the capital gains tax loophole is, presumably, a reference to stopping some or all of this favorable treatment.
  - thehardsphere 9y ago
    1. That's not a "loophole", it's a deliberate feature of tax law. 2. Changing that would not do anything to solve this problem (even if you think it should be solved through more government spending, it wouldn't raise much money)
  - WalterBright 9y ago
    It's less of a loophole than one might think, because much of long term capital gains is illusory due to inflation.
  - Veelox 9y ago
    Just to make sure I understand you, you are advocating counting long-term capital gains as ordinary income?
    - dragonwriter 9y ago
      I'm explaining what it is likely the upthread poster was referring to when talking about closing the capital gains tax loophole, not advocating anything. (I have advocated better aligning the treatment of capital, labor, and generic other income, but the details involve more than just counting long-term capital gains as ordinary income.)
      - Veelox 9y ago
        I missed that you were filling in for someone else, thank you for the explanation.

bradleyjg 9y ago

A UBI.

thehardsphere 9y ago

Don't take away the only entry point to employment in the economy that those people have until we actually have a good answer to that question.

davidw 9y ago
Part of my point is that some people very loudly point out the flaws of minimum wages - and they have some valid arguments - but them seem to hem and haw a lot about finding better solutions for that subset of people who are in real trouble.
- thehardsphere 9y ago
  And my point is that, it is fine to want to help people, but doing something that clearly hurts them is not the right way to do that. Maybe those better solutions have the same dynamics. Economics is all about trade-offs; many of them are hard to evaluate and some of them are not worth making. Minimum Wage increases to $15/hour seem more and more to be not worth making.
  - topmonk 9y ago
    I think whether this hurts people, at least in the long run, depends, though. Taking a job which provides no on-the-job training, and takes no skill keeps someone where they are. Because they aren't learning anything they are stuck doing jobs at this level forever. If a person is prodded into learning a skill in order to reach the bottom($15/hour) rung, and then at the $15/hour level, the person is doing skilled work, they will be defacto receiving on-the-job training, since they are providing some skill. As long as there is a big enough social safety net, and access to resources like the library and the internet, unskilled and unemployed people will at least have the opportunity and a motive to learn. It's really too early to tell whether a higher minimum wage will result in a more skilled, educated populous in the long run. But it does fit the data that most (all?) first world countries have a relatively high minimum wage and social safety net. It could be argued that a high minimum wage is partly how they got there.

dtehranian 9y ago

Many have trouble making ends-meat because they lack skills that the market will pay for. Long term solution: Get more people skills that employers will pay for. Another solution to help low wage/low skilled workers, is a negative tax rate: https://en.wikipedia.org/wiki/Earned_income_tax_credit https://en.wikipedia.org/wiki/Earned_income_tax_credit

bradleyjg 9y ago
The problem with a negative income tax, especially when coupled with many other means tested programs at the state and federal level, is that you create a situation where there are very high effective marginal tax rates. Sometimes even exceeding 100%.

miguelrochefort 9y ago

People really need to be more frugal.

tim333 9y ago

Dunno the best way but there are a lot of things that can be done and have been tried in various countries. Negative income tax, free healthcare and education, social or subsidised housing and so on. Maybe in the future basic income will be a thing.