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Why I'm not hiring
- toxicflavor 16y agoAnother explanation for why Bogen Communications is not hiring might have to do with their declining financials: http://www.bogen.com/aboutus/financials/#historical http://www.bogen.com/aboutus/financials/#historical
- ratsbane 16y agoGood observation. The decision to hire comes down to a very simple "will hiring this person cause us to make more money than the person costs us." He's blaming the cost side of the equation for all of the decision to not to hire. He could just as easily blame himself for having failed to streamline his company's old-school high-markup sales network.
- mattmaroon 16y agoI'm sure the author blames that on Obama too.
- gahahaha 16y agoWhat total utter crap. Taxes is the price you pay for a civilized society, and the US has far less taxes that most western countries, and as a result is arguably less civilized. Millionaires whining to other millionaires in the WSJ. Spare me.
- jswinghammer 16y agoHe has to make the calculation about hiring people. If he doesn't feel comfortable hiring he shouldn't. Why do you feel as though you're in a position to tell him what his reasons are or should be? Taxes take money out of the private sector and thus reduce the pool of capital for private sector job creation. Our taxes go to fund bankers and wars. That's why we're in such bad shape. If they went to build roads and bridges no one would care so much.
- CodeMage 16y agoIf the problem is how the taxes are being spent, do you really think that not hiring is the correct solution?
- davidw 16y agoHe's not just "making calculations about hiring people" - he's engaging in politics, and Hacker News fell for it.
- thetrumanshow 16y agoTo be sure. But it is nice, once in a while, to be reminded of how insane the numbers actually are.
- gahahaha 16y agoInsane. Really? American taxes are VERY low by almost any measure. http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu... You could argue that you don't get much for them, but that wouldn't be true either. Most government programs are very popular, but it is strangely still popular to hate the government. The logical disconnect there should be obvious.
- orangecat 16y agoMost government programs are very popular, but it is strangely still popular to hate the government. The logical disconnect there should be obvious. Most people will enthusiastically support programs that take $2 from other people and give $1 to them. If you have lots of programs like that they're clearly wasteful in aggregate, but each individual one will have vocal supporters.
- jbooth 16y agoYeah, except he's not actually calculating. He's just delivering a pre-scripted rant with a little argument to authority, "I make hiring decisions". Great, I feel better. He's paying almost as much for his end of the health insurance as the total tax take. What's he whine about? Taxes. Who's providing more bang for the buck, the health insurance company or the relevant federal, state and local governments? Does he have kids in school? Does this guy even look at his own numbers?
- changhiskhan 16y agoSo a government that collects 100% of your income as taxes would create the most civilized society?
- gahahaha 16y agoNo. (See: Laffer, Arthur)
- davidw 16y ago> So a government that collects 100% of your income as taxes would create the most civilized society? This is the sort of comment that drags down discussions about politics. No one is advocating that sort of thing here. In fairness, the comment changhiskhan is replying to, that US is "arguably less civilized" is quite a mouthful as well, and is the sort of thing that sets of long, fruitless flame wars that lead nowhere.
- gahahaha 16y ago"arguably less civilized" Not sure I agree that it was all that inflammatory. It mas a bit tongue in cheek, but actually has a little bit truth to it. Anyway. You can take the boy out of Reddit, but not ...
- changhiskhan 16y agoI was just trying to get him to clarify his point. There was nothing in his original comment that indicated he believed there was an optimum point between 0-100%. I'm at a loss as to why my comment was so much more inflammatory than his comment about the US being "arguably less civilized".
- davidw 16y ago> There was nothing in his original comment that indicated he believed there was an optimum point between 0-100%. Would you really want to waste any of your time with someone who believed in either 0 or 100? They're some sort of True Believers and nothing you can say - neither facts nor logic - will dissuade them from their view. Luckily though, this community is mostly composed of cleverer folk than that, something that ought to be pretty obvious.
- anamax 16y ago> What total utter crap. Taxes is the price you pay for a civilized society, and the US has far less taxes that most western countries, Actually, it doesn't. US tax revenue per-person is pretty much in the middle of western Europe. Things look different because US GDP/person is higher and poor workers only pay for their retirement. (SS payouts are fairly progressive, so it's a good deal for the poor and sucks for those near the cap. The cap exists because we don't want rich people to care about SS and we don't want to pay $400k/year to Ross Perot. If you want to remove the cap, please tell us how you're going to deal with rich people caring about SS, which they will if benefits are capped, or if you're going to uncap the benefits as well.)
- gahahaha 16y ago"US tax revenue per-person is pretty much in the middle of western Europe." Not really. The OECD average is 36%, Americans pay 28% and no western European states pay less. http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu... In nominal terms the US may be higher, but I don't really see that that proves anything. The main problem is of course that so much has to be paid for by the individual in the US that is efficiently taken care of by the state in Europe, so comparing tax rates misses a big part of the issue.
- anamax 16y ago>> "US tax revenue per-person is pretty much in the middle of western Europe." > Not really. The OECD average is 36%, Americans pay 28% and no western European states pay less. Yes really. American's pay 28% on a larger number, so the amount of money per person is basically the same. BTW - you're ignoring corporate taxes, which are a significant fraction of revenues. They don't actually change the equivalence but they do increase the "revenues per person-year" number. > nominal terms the US may be higher, but I don't really see that that proves anything. Actually, it does. > The main problem is of course that so much has to be paid for by the individual in the US that is efficiently taken care of by the state in Europe, so comparing tax rates misses a big part of the issue. I'm not comparing tax rates. I'm comparing tax revenues per person. You're pointing out that western Europeans get more for the same amount of money. Combining those two facts tells us that a tax dollar goes further in western Europe than it does in the US. If the US govt wants to provide the same benefits, it either needs more money per person than European govts or it needs to take the relevant amount of money from its other expenditures.
- roboneal 16y ago"What total utter crap" passes for an up-voted "well reasoned" comment on HackerNews. Spare me please. Unlike many in the political class, this man actually PAYS his taxes and the payroll taxes of his 80+ employees in pursuit of private enterprise. Considering he has risked his own private capital to create jobs, he has earned some right to "whine" about the current trend of taxation.
- endtime 16y ago>the US has far less taxes that most western countries I own my own LLC, and lose 45% of my "salary" to taxes (in large part because I pay both 7.5% "halves" of my Medicare tax). Is that far less than it would be in most other Western countries?
- middus 16y agoI think you should put "lose" in quotation marks. It is not gone. The money is not gone, it is spend on you for hospitals, police, roads and what not.
- endtime 16y agoI'm 24 years old...I have zero expectation of ever seeing a penny for the 15% of my salary that goes to Medicare.
- jleyank 16y agoThat's not bad. 2x social security/medicare and you're a bit under 50%. I'm a wage-jockey in Canada, and I'm paying over 50%. So yeah, US taxes DO look like some of the lowest in the Western World.
- abalashov 16y agoYep, you're right. The real problem is that for roughly the same tax burden, you don't get a fraction of what Western European or Canadian counterparts get. No socialised healthcare, no government-subsidised education, a pitiful two weeks of paid vacation at best, joke unemployment benefits, etc. I'm not necessarily arguing that any of that should be the government's job or that all aspects of it are fundamentally fiscally sustainable. I'm just pointing out that you get quite a bit less for your money; an alarming preponderance of your income tax goes to prosecuting pointless wars, Wall Street bailouts, and other suitably kleptocratic endeavours. Local and state government operations are substantially funded by sales taxes, property taxes, excise taxes, and other taxes not even accounted for by your 45% figure; the income taxes do not yield many practical, down-on-the-ground results apart from the relatively small portion of the federal budget that goes to state-bound block grants.
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- bryanlarsen 16y agoSounds like he should move his company to Canada. He could replace $10,000 in private health insurance with $5,000 in extra taxes.
- btilly 16y agoBetter yet, Canada has a balanced budget. The US situation gets even worse when you add in unfunded future liabilities each year.
- CodeMage 16y agoWait, I don't get it. What is he proposing as an alternative? Would he be happier to pay Sally $74,000 so that she herself can do the whole process of paying $30,000 for taxes and health care and stuff like that? Or is he proposing to pay sally $44,000 and let Sally pay $30,000 out of that? Or is he just whining?
- forinti 16y agoAlso, what kind of market does he expect to have after he takes away so much disposable income from workers?
- noodle 16y agojust whining. he could, instead, hire freelance or contract workers. he won't have to pay much to the government, he'll just have to pay the contractor double what he pays Sally.
- mattm 16y agoI don't know how it works in the US. In Canada, if a business hires someone on contract but they are not in an "arms-length" transaction (ie. the 'contractor' is working in their office, using their equipment for more than a 'temporary' period of time), then the Canadian Revenue Agency can force the business to re-classify them as an "employee" causing both the person and company to pay back-taxes and any penalties.
- noodle 16y agoi honestly don't know the details of the current US laws, but i do know that i've worked in a team with reasonably permanent, in-house contractors before.
- e40 16y agoAnd that company was likely breaking the law in the state in which they operated. If CA, MA, WA, or most others. CA and many other states are now going after companies that hire contractors to do the work that is usually done by employees (and they use their own definition of "employee", too). They will hit you with fines and back employment taxes should you be audited. How would you be audited? A contractor files for unemployment, to which they are not entitled (because unemployment taxes are not paid for them). It happens all the time.
- c1sc0 16y agoTaking home 66% after taxes / healthcare is considered normal in large parts of the world, so why are Americans so much more likely to make a fuss about it? [Edit: jswinghammer enlightened me below: "Our taxes go to fund bankers and wars." That indeed may make a big difference. Over here in Europe I feel most of my taxes do good, not evil. So I'm kinda ok with them.]
- Ardit20 16y agoReally? Which country are you from? Because if you are in the EU we gave loads to Greece. We gave much more to banks some 500 billion on EU level, then there is the national level. And Nato is in Afghanistan so I think loads of EU nations are fighting wars. Many Eu nations joined the Iraq war too, so I do not think any American is taking a moral stance over high taxes which a European needs not because their moral conscience is clean. The guy, as said in many other comments has an agenda. SO it is hardly "Americans" but republicans, or conservatives, or democrats as they may be called in some countries.
- abalashov 16y agoThat's exactly right. We don't get even a tiny fraction of what you get for your ~50%+, or would get for ~35%.
- paolomaffei 16y ago$74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits. Employees get to keep more the 75% of what the company spends for them? (56k / 74k) Employees in Italy and Scandinavia countries barely get 50% of what companies pays them...
- sciolistse 16y agoYep, move to Sweden and he'd be shelling out some 90k to put $44000 in his employees pockets (46% payroll tax, 5-15% social security, then 30% income tax on that).. And then there's the 25% sales tax.
- jpr 16y agoComing from Finland, this was my first reaction too.
- abalashov 16y agoYeah, and employees in Italy and Scandinavian countries get a metric butt-ton more government services for their money. Not to turn this into an argument about what government should be doing; don't care, irrelevant. The point is simply that you do get a lot for giving up ~50%+ of your paycheck in those countries. Here, you just give up whatever you give up (your figure doesn't take into account sales taxes, excise taxes, use taxes, property taxes, etc.)
- kgrin 16y agoIt's interesting how his private insurer raising rates is obviously "ObamaCare"'s fault. Like all businesses, insurers raise prices because they can, thanks to market position, scarcity and all the other usual factors (distorted, as the health insurance market is, by oligopoly-entrenching state regulations that have little to do with the Affordable Care Act).
- kgrin 16y agoTo elaborate a bit - it just really struck me as bizarre that he's basically giving his insurer a pass for raising his prices, because it's "business", and business can do no wrong - as a fellow businessman, he understands the plight of the insurance company. But all the money that's collected in taxes, in his mind, goes into the black hole of Washington & Trenton - including not just the somewhat-opaque things like income tax (which indirectly funds his and Sally's roads, schools, police force and wars abroad) but things like disability & unemployment insurance, which it seems like Sally might need if he has a bad day.
- jbooth 16y agoWelcome to the mind of the Republican. This guy probably spent 8 years defending the Bush deficits and discovered he was a fiscal hawk on January 29, 2009. Until 2016, that is, or earlier if he's lucky.
- jambo 16y agoTo those upvoting this speculation about the author's frame of mind, why does this add to the conversation? To my mind, it distracts from the argument by focusing on the arguer. Is this TPM?
- jbooth 16y agoI was addressing the person I responded to, who was astounded by the gigantic blind spot in the author's reasoning. I explained why.
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- DannoHung 16y agoHow much money does Sally bring in to the company? The unexamined part of the equation.
- Roboprog 16y agoExactly, if Sally only brings in $30K / yr, BYE BYE Sally! Otherwise, if she allows the guy to bring in another $150K, the guy should quite whining and hire a few more. Never miss an opportunity for a good libertarian rant, though, at the Journal I guess. Oh, and it should have read: costs 74K to give her 56K in pay and benefits -- 18K in taxes.
- wccrawford 16y agoSally may not bring in enough to cover her own pay. Instead, she might enable someone else to bring that much in. You know, like programmers do.
- DannoHung 16y agoSo is she a force multiplier? Part of a tandem or group role? You can't just say that she brings indirect revenue as an excuse for not discussing what she adds.
- Tichy 16y agoNot from the US, but I don't understand his issues with taxes. What does change for his company if Sally has to pay higher taxes? Wouldn't it just mean that Sally ends up with less cash, not with his company having to pay more. Is it mandatory now to offer health insurance to employees? How has this system of companies arranging for the health insurance emerged? I can only guess: providing health insurance is a way of giving employees a tax free bonus (like a company car, or free food)?
- rlpb 16y agoPresumably he is contracted to pay Sally $59,000 gross + some level of benefits. But his costs to pay this are higher ($74,000). Presumably as taxes rise, he will still have to pay Sally $59,000 gross + the same level of benefits, and his own costs will have increased. He is unable to pass on the full cost of a tax rise to Sally. From what I understand, the health insurance situation has arisen due to buying power. It is impossible for Sally to buy her own insurance at the same rate that her company can do it (even ignoring any tax breaks).
- Tichy 16y agoThat could explain it, but it seems weird. In my country salary is usually negotiated pre-tax, and I think in this case it makes sense. But is there a law to set up salaries that way? He cites it as a reason for not hiring, so presumably he could just negotiate salaries post-tax and do away with the problem.
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- stonemetal 16y agoIn the US the employer shares the income tax burden. So If your boss gives you a raise the company sees its own taxes go up. I am not sure of the tax implications of health insurance.
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- kgrin 16y agoFair enough; perhaps we should make the system a bit more progressive. Perhaps if FICA weren't capped at ~$100K, we could reduce Sally's share of the burden? Or if we eliminated any number of corporate-tax loopholes, or agribusiness subsidies, or defense spending, we could reduce personal income tax rates?
- anamax 16y ago> Perhaps if FICA weren't capped at ~$100K, we could reduce Sally's share of the burden? Are you planning to uncap benefits? If you do, Ross Perot gets $400k/year. If you don't, rich people start caring about SS. Those are the reasons why Social Security advocates used to like the cap. Were they wrong? FWIW, SS payouts are very progressive. Folks on the low end get a reasonable return on their contributions. Folks near/at the cap get a crappy deal. The rich ones don't care because of the cap.
- Retric 16y agoIt's not a binary choice, you can have uncapped benefits hand Bill G 5 million a year, and give them exactly as crappy a ROI as I get. Edit: This would also really help out aging athletes / rock stars / actors who make a lot of money when they are young and then run out.
- anamax 16y ago> It's not a binary choice, you can have uncapped benefits hand Bill G 5 million a year, and give them exactly as crappy a ROI as I get. Crappy payout was assumed in the "Ross Perot gets $400k/year". It has two huge political problems - folks will scream about large payouts to rich folk and rich folk will fight the crappy ROI.
- jsz0 16y agoI believe state & federal taxes existed 3-4 years ago when unemployment was at 5% so I'm not sure how it's relevant to the current unemployment situation. Also as a rule anyone who uses the term "ObamaCare" has an agenda so I just assume he's either lying or misrepresenting the situation with a 28% increase in health care costs. I wouldn't expect anything less from WSJ -- taxes bad, Obama bad. Maybe we'll start hiring again when you elect some Republicans.
- CapitalistCartr 16y agoThe problem isn't that taxes exist; it's the uncertainty in their change. Uncertainty is an economic killer. Most business people use the term "ObamaCare"; that has no bearing on the rise in medical insurance this year. I've seen the same rise.
- roc 16y agoI bet you a dollar the 28% increase was the opening bid from his health care provider and not that far off the opening bid those previous years they ended up paying 10+%. Because that's almost exactly what I've seen for the last five years. It's just the way negotiations go. And every now and again, you have to switch providers. It's a horrible hassle, but nothing new. Further, the health insurance reform legislation included a lot of necessary changes to make it viable to sever the employer/health insurance connection. I have a hard time reconciling his clear dislike of the changes with his claimed desire to reduce his own overhead.
- Retric 16y agoYour post is insightful, on topic, informative, and clear. However, I wish it had been posted somewhere else. In the larger context: We spend 22% of the GDP at the state and local level, 25% at the federal level and transfer 3.5% of the GDP though taxes and have a ridicules debt. To meet those obligations the government needs to take a little over half of everyone’s paycheck. http://www.usgovernmentspending.com/downchart_gs.php?year=1903_2010&view=1&expand=&units=p&fy=fy11&chart=F0-fed&bar=0&stack=1&size=m&title=&state=US&color=c&local=c http://www.usgovernmentspending.com/downchart_gs.php?year=19... At the same time we have a horribly broken healthcare and education systems, aging infrastructure and little will to build for the future AND an ever growing debt. The problem is many people receive huge subsidies from the current system and nobody wants to give up their slice of the pie. Now, if WE have something constructive to add feel which may be implemented in the real world free to post, until then let’s try and keep politics off of HN. Edit: Not to single your post out, but I agreed with everything you said, and yet I still felt like I was wasting time by reading it. I guess I need to simply avoid clicking on link bait.
- sprout 16y agoThe logical conclusion I get from this article is that if the government wants to improve hiring, they should remove all income taxes on people making <$100k a year, and tax business profits to compensate. Also increase taxes on those making >$100k to discourage upper-middle class and uber-rich hiring. I don't think that's the solution he's looking for, but I didn't hear him offer one.
- Lendal 16y agoThe solution is for government to cut its spending. But that brings up an interesting question. Has any government in history ever significantly cut its spending and reduced its taxes for the long-term benefit of its people, without a violent revolution?
- sprout 16y agoIt's clear that that would benefit the OP, but your assertion that it would be to the long-term benefit of the people is completely opinion. You take any piece of government spending and cut it, there's a rational argument as to why cutting it would cause serious harm in the long term, and many of those arguments are stronger than the reverse.
- 100k 16y ago"Companies have also been pressed into serving as providers of health insurance. In a saner world, health insurance would be something that individuals buy for themselves and their families, just as they do with auto insurance. Now, adding to the insanity, there is ObamaCare." Actually, in the saner world, companies don't have to worry about health insurance because it's provided by the government.
- jambo 16y agopaid for by ...
- forinti 16y ago...society. If workers pay for it, there's less money to spend on other things (and they might not have the same bargaining power). If companies pay, they'll have less money to invest. If the government pays, it comes from everybody's taxes. You can't dissociate any player from the others. It should boil down to the question of finding the most efficient way for society overall.
- jambo 16y ago"You can't dissociate any player from the others." Exactly. Companies will still have to worry about it, whether they pay for insurance directly or indirectly. "It should boil down to the question of finding the most efficient way for society overall." To what end? And as judged by whom? The majority?
- DrJokepu 16y agoThe OECD publishes an extensive comparison of tax burdens on wage income in various OECD countries: http://www.oecd.org/dataoecd/44/2/1942506.xls http://www.oecd.org/dataoecd/44/2/1942506.xls Some key numbers, at average wage: US 34.4%, UK 38.8%, Germany 63.3%, France 52.0%, Japan 34.2%, Hungary 71.5%
- Ardit20 16y agoYou get free health care in the UK though. Also, you pay much less for university, well for now anyway. It used to be free only 4 years ago!
- DrJokepu 16y agoHealth care, etc. are indeed covered by taxes here in the UK, but the bottom line adds up the same anyway. Obviously, the services different countries "provide" for your income tax vary by country; some countries provide "free" healthcare, some offer high (perhaps sometimes too high) unemployment benefits, while others decide to wage wars instead to protect their interests overseas.
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- culled 16y agoAn extra $30K is not going to make much of a difference if he's got 83 people and he wants to hire more.
- doki_pen 16y agoIt's worse then outlined in the article. Sally also pays other taxes with her "net" income. If she rents, her rent is certainly higher because of the landlords property taxes. If not, she pays it herself. Then there is sales taxes and excise taxes to may. Truth be told, of the money that the employer pays to keep her employed, only a little more then half of it ends up in her pocket. Here is a huge opinion that could be incorrect. Most people work for what they need to live. If it becomes more expensive to live, Sally will want a raise. If it's cheaper to live, she won't be so pissed when she doesn't get a raise. The bottom line is all that matters to most people. Therefore, no matter what taxes are created, purported to be income tax and what not, are paid by businesses. What does this mean in practice? It means that by having incoming taxes at all, we are encouraging business to hire people outside of the US. The only way to level the playing fields, as far as I can see, would be to shift the taxes from income to sales. I don't know if that is plausible or not, but it's the only way I can see the US government really encouraging job growth here in the US. It would mean that no matter where your company does it's business, if it uses the US market, it has to pay the piper, and would give a real shot to US workers at competing with other world-wide workers.
- rwl 16y agoShifting taxes to sales, especially in a significant way, will just dampen aggregate demand, and push us into a deeper and longer recession. (See a comment I made here, on an article that didn't get any front-page time about states looking to raise revenue by taxing online sales: http://news.ycombinator.com/item?id=1513784 http://news.ycombinator.com/item?id=1513784) An alternative solution is to tax the unused value of illiquid capital like land. Unlike income and sales taxes, which act as disincentives on economic exchange, this kind of tax acts as an incentive for exchange, production, and employment: if you own capital which is not being put to use, this tax is either an incentive to put it to use or to sell it to someone who will. This isn't a new idea. It was put forward by Henry George in Progress and Poverty in 1879: http://en.wikipedia.org/wiki/Progress_and_Poverty http://en.wikipedia.org/wiki/Progress_and_Poverty (Disclaimer: I haven't read the book, but I did buy it recently and it's on my to-read list.)
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- marcusbooster 16y agoYou can read all about Michael Fleischer and his "re-building" of Iraq by removing government subsidies to state owned businesses: http://www.guardian.co.uk/theguardian/2004/jan/17/weekend7.weekend6 http://www.guardian.co.uk/theguardian/2004/jan/17/weekend7.w... He's a neo-con of the highest order, so take his "Joe Biz" spiel with a grain of salt, he certainly has an agenda.
- btilly 16y agoThe author has an agenda. However he also has a point. During the Bush recovery there was much complaining about how salaries didn't go up. Well it turns out that the amount spent by employers on employees did go up at normal rates for a recovery. However increasing health care costs absorbed that surplus, and employees did not directly see more. In fact employees got moved to crappier plans and so saw less income. It is too early to tell whether Obama's plan is going to cost us all more or less than the distorted market has been costing. But it is certain that the USA cannot long afford to let current cost trends continue unchecked.
- seasoup 16y agoThis seems like a lot of whining to me. 33% does not seem high for total taxes for employment. That's the total that both the employee and employer pay together. Sure, they could do more without having to pay that, but they also wouldn't have, I don't know... roads, police, fire department, public education, an army to protect them, etc. What percent do they think they should be paying? Sounds like they think they should be entitled to get it for free.
- mattmaroon 16y agoThis is little but a thinly-veiled attack on Obama.
- thentic 16y agoPoll - How many of you who have written comments have 1 or more employees?
- jmcentire 16y agoThis is a ridiculous article. By ignoring the reality and focusing on only a small aspect of the economy, the author attempts to covey the idea that the current tax structure is not only bad for business, but bad for employees. The author suggests that his company pays $74,000 to get $44,000 into his employee's, Sally's, pocket. The tone used implies that the other $30,000 is purely a waste. The key point conveniently ignored, however, is where that $30,000 goes. He mentions the abstract ideas of state and federal taxes, unemployment insurance, disability insurance, Medicare, and Social Security. If we assume the author would be happy eliminating all taxes and insurance payments, we're left with a range of possibilities; he wants Sally to have between $44,000 and $74,000. Considering the article's purpose is to suggest he's not hiring because he doesn't believe Sally is worth $74,000 and we can eliminate the high-end (let's take of the top 10% and put Sally's max at about $66,000). Starting from the $44,000 figure. $7,322 of that would have to go toward a supplemental system for Social Security. It's not government backed and Sally has to spend time managing her investments. As we've all recently learned, even without making any mistakes herself, she stands to lose a lot of money if the stock market fails. $1,712 would be spent on supplementing Medicare. The $12,000 in benefits would have to come from somewhere, in this worst-case for Sally, we'll take it out of her pocket. Without paying taxes, Sally must pay however much the privatized school charges her. She must pay the privatized police force to protect her. She must pay the privatized fire station in case there is a fire. She'll pay tolls for every road she uses to get to and from work. I'm sure the author enjoys the ability the company has to lay off workers, so Sally will have to put back some money in case she becomes suddenly unemployed or temporarily disabled. That's $275 for the author today -- but Sally wouldn't have the benefit of a collective pool of funds, so she'd have to build up a buffer very quickly. So far, we're well above $21,309 not counting the costs to which we've failed to attributed any value (police, fire, roads, schools, et cetera). Let's assume those and associated services currently provided by the government are a very reasonable $8,691 per year (many private schools would be beyond Sally's reach). Whereas the author would save $30,000 to put the same $44,000 in Sally's pocket, just to maintain her standard of living today, she would need to easily spend that $30,000 out of her own pocket. Whereas the employer might then be willing to hire someone, Sally wouldn't be willing to work. Well, actually, she wouldn't have any choice but to work or die. What about the magnanimous author who'll now pay Sally $66,000? Well, she'd bring home $66,000 and immediately spend $30,000 to pay for all the gaps that taxation left. Which means she'll effectively receive $36,000. That sucks for Sally and distills the author's argument down to: he wants to place the burden squarely on the shoulders of the workers so he can save money. Obviously any employer will only spend as much on an employee as they make from having hired that employee. So, either Sally creates $74,000 in wealth or more OR she doesn't. That's the bottom line. Stop trying to blame taxation when the reality of the proposed system merely punishes the employee to the additional benefit (beyond the value already created by the employee for the company) of the employer. Also, please note the multitude of public services I failed to mention which are supported with taxation. Research, universities, military, postal services, social services, public health, water, sewage, oversight and regulation... Without these, Sally's standard of living would likely be much worse than it is today.
- mkramlich 16y agoHe lost credibility with me somewhat when he threw out the term Obamacare. I think it's a tactic by the Right meant to be derogatory by implying that somehow only Obama wanted it or designed it. In reality, many people contributed to it and shaped it, and the majority of Americans polled wanted major health care reform and the majority of Congress passed it. That said, the OA author made points I agree with that it seems unfair and inefficient to require businesses to perform tasks and provide services which are unrelated to their core business, and arguably should be the responsibility of individuals or the government. I hate the fact that businesses are involved in providing health care for employees, it seems horribly inefficient and out-of-place. Businesses should only pay cash to employees, ideally, since that is most efficient and the most transparent and ungameable. Employees should then get health care from the market and/or from the government.
- abalashov 16y agoPerhaps due to my incessant optimism about people's reasonableness, the way I understood the argument seems to me to be primarily about the regressive character of the tax system. $59k/$44k just isn't that much anymore, especially in a relatively high-cost area, and especially considering the sources of cost inflation he identified. But okay, $59k/44k is one thing. You want to talk about regressive taxes, tell me why I have to pay nearly $2k to employ a part-time person who nets just a little shy of ~$1400 (roughly ~$22k annual gross), and that's without any benefits. Talk about a disincentive for job creation! I'd much rather pay my part-time employee more of that ~$2k, and if I could, I would. If I give him a $300 bonus one month, he's going to see about $180 of it if it's run through the normal payroll withholding mechanisms. At that level of income, that really is ridiculous.
- locopati 16y agoPoint and counterpoint... http://motherjones.com/kevin-drum/2010/08/wall-street-journal-editorial-page-outdoes-itself http://motherjones.com/kevin-drum/2010/08/wall-street-journa...