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Aren't we creating incentives for workers abuse: - No tax on overtime: so now making them work 60 hours a week is cheaper for the employer - No tax on tips: s
by thuridas 1y ago
Aren't we creating incentives for workers abuse:
- No tax on overtime: so now making them work 60 hours a week is cheaper for the employer
- No tax on tips: so the tip based payment model is cheaper
- entropi 1y agoYes, and my understanding is that this is precisely the point.
- ghiculescu 1y agoHow is it cheaper for the employer?
- gog 1y agoFor the same amount of money employee gets it requires employer to pay out less.
- ghiculescu 1y agoThat’s not how income tax works, particularly for minimum wage workers.
- RobinL 1y agoIt's just supply and demand. It makes working in these industries relatively more attractive, increasing supply of labour and therefore reducing price of labour. So restaurant owners capture some of the benefits
- ghiculescu 1y agoSo employees earn more, and restaurants spend less. And this is bad because?
- RobinL 1y agoBecause you're artificially favouring one specific industry, at a cost to all other industries. And because the implication of your argument is we should never tax anything because that's a benefit to both the consumer and the business
- pnt12 1y agoWell, the money doesn't appear with magic, so someone is paying: the government (forfeiting taxes) or the consumer (more pressure to tip). To me, the bad part is the tax reductions only appear in behavior I don't agree with: high overtime and tipping (when it's semi mandatory). I'm not American, but this is also showing up in my country.
- fireflash38 1y agoAren't we already in a manufacturing hole and we're incentivizing more service industries over them?
- IshKebab 1y agoThey can pay lower wages because the employee is losing less of their income to tax. Supply and demand.
- flanked-evergl 1y agoIncome tax is paid from employee salaries/wages, not by employers.
- wat10000 1y agoDoesn’t matter, money is fungible.
- flanked-evergl 1y agoMy money is not fungible with my employer's money. Money being fungible does not mean I get to use your money.
- wat10000 1y agoIt means that you paying taxes on your pay is equivalent to your employer paying taxes on your pay. If you shift taxes to the employer, then they will reduce your pay accordingly.
- flanked-evergl 1y agoNever ever once has an employer given me a pay raise when they got a tax cut or a pay cut when they got a tax hike. Taxes do not feature into salary negotiation. Employers pay as little as they can get away with, while employees want to get as much money as they can. If you need theoretical worlds with no correspondence to anything ever in actual history to justify your claim, then maybe there is not that much to it.
- wat10000 1y agoWhere do you live that employer-paid taxes on employee pay have been cut during your career?
- flanked-evergl 1y ago
- dh2022 1y agoNot sure how is it now, but when I worked in a plant overtime work was paid at 150% rate of regular pay. Work during national holidays was paid at 200% rate. Isn’t this still the case? (The workforce at the plant was unionized and the higher rate may have been part of the labor contract. This was in Montreal Canada about 25 years ago. )