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Parent's argument was that it's disingenuous to count e.g. health insurance as part of compensation when it's required by the State. That's not private compensa

by nmrm2 11y ago

Parent's argument was that it's disingenuous to count e.g. health insurance as part of compensation when it's required by the State. That's not private compensation, it's a tax on corporations. Post-ACA, a company calling health insurance part of your compensation package is like them calling payroll tax part of your compensation. Which almost no one does historically, because that's stupid. It's not reasonable to argue that "real compensation" has increased between year X and year Y by counting tax burdens in year Y but not in year X. The reason that such a comparison is stupid and wrong should be obvious. It's slightly more reasonable to argue that additional taxes have eaten up projected wage increases. (But that argument is wrong.) > If your employer promised you a full pension, wouldn't you consider that a part of compensation? The difference here is that the Government more or less never requires a private company to provide a full pension.

JesperRavn 11y ago
So if the government taxed each corporation $1000 per employee, then gave you that $1000 back at the end of the year, that would mean your wages were less by $1000 a year? it's not reasonable to argue that "real compensation" has increased between year X and year Y by counting tax burdens in year Y but not in year X. It is when the government introduces new "taxes" in year Y, which would have been equivalent to salary in year X.
- nmrm2 11y ago
  > It is when the government introduces new "taxes" in year Y, which would have been equivalent to salary in year X. This is a different argument and I've already addressed it in my post above: It's slightly more reasonable to argue that additional taxes have eaten up projected wage increases. (But that argument is wrong.) Again, the argument you are making is that taxes offset increases in income that would have increased otherwise, NOT that income has actually increased. But, as I stated above, this argument is clearly and obviously wrong -- a conclusion that is unambiguously supported by the data. Tax increases cannot explain a multi-decade stagnation in income, ESPECIALLY because NET corporate taxes have net decreased in that period of time [1]. (As a complete aside, when every corporate tax break is passed on to either the customer or the employee, I'll be ready to entertain even the criteria I established above. But while companies pocket the difference and perform stock buy backs [2], economists who argue tax increases count as increases in income are being disingenuous (edit: changed wording). [1] https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States#/media/File:US_Effective_Corporate_Tax_Rate_1947-2011_v2.jpg https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_St... [2] Clinton mentioned that H.W. Bush warned him not to provide a no-strings-attached tax holiday for this exact reason; see his latest interview on the Daily Show.
  - JesperRavn 11y ago
    Please be civil, I'm not going to "fuck off" just because you argue in an aggressive manner. All your verbal arguments are obfuscation. This is simple arithmetic. What we would like to measure is the total post-tax and post-govt spending utility of a person: total utility = post-tax compensation + govt spending per person. That is what should be going up. But it's hard to measure all these things, so instead we can try to measure total compensation. When you redefine health care to be a tax, you are moving health care from the "post-tax compensation" category, to the "govt spending per person" category. Then you are arguing that post-tax compensation is going down, but that is just because of your accounting choice. Your logic would only apply if the government was initially providing free healthcare, and then moved to a regime where healthcare was provided by employers, which is not what happened. The problem with your reasoning is that it deals with everything except economic fundamentals, i.e. total consumption per person.
    - nmrm2 11y ago
      > Please be civil, I'm not going to "fuck off" Sorry, I didn't mean you specifically (unless you're an economist, I guess). You're right though, I've changed the wording. > Your logic would only apply if the government was initially providing free healthcare, and then moved to a regime where healthcare was provided by employers, which is not what happened. The government shifted the responsibility for insurance from individuals to corporations. Fact: if a company does not provide insurance, then they pay a tax. Fact: SCOTUS called this requirement a tax. > The problem with your reasoning is that it deals with everything except economic fundamentals, i.e. total consumption per person. The problem with your argument is that you assume that taxes attached to empoyment are somehow different from other taxes, and ignore the fact that businesses have benefited from decreased taxes for decades and yet wages have stagnated. (Edit: Concretely, if I impose a new flat tax on corporate profits, does that count as "compensation"? No, it doesn't. The issue of how it effects compensation is separate. Just because a tax is attached to employment doesn't make that tax part of compensation.) Again, the issue is dead simple: do increased corporate taxes explain income stagnation? Given that corporate taxes have in fact decreased over the time period we are talking about, the causation you're proposed is literally vacuous ("vacuous" here is a technical description of the problem with your argument, not an insult). In general, think of taxes attached to income "use taxes" on the country's human capital, rather than "mandatory employee compensation". Because historically we have never included taxes as part of "compensation", and starting that practice now is uninformative unless we take into account the global perspective on corporate taxes.
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- nmrm2 11y ago
  > So if the government taxed each corporation $1000 per employee, then gave you that $1000 back at the end of the year, that would mean your wages were less by $1000 a year? In many cases is roughly what social security does. In almost all cases, this is not too grossly far off from what social security does. No, employer's contributions to social security are not typically counted as compensation. More importantly, though, this is beside the point because a) the exact thing you describe doesn't happen in the US; b) to the extent things like it happen, we don't historically consider them compensatory; and c) again, taxes can't explain income stagnation when net taxation is down... so even if what you're saying is true, it's irrelevant to the central point of the discussion.
refurb 11y ago
That still makes no sense. The ACA only requires certain sized employers to either pay for your insurance or give you the cash to buy your own. If your employer is paying $6K per year, that is additional compensation beyond the $2K per year minimal plan the have to pay for.

by nmrm2 11y ago

JesperRavn 11y ago

So if the government taxed each corporation $1000 per employee, then gave you that $1000 back at the end of the year, that would mean your wages were less by $1000 a year? it's not reasonable to argue that "real compensation" has increased between year X and year Y by counting tax burdens in year Y but not in year X. It is when the government introduces new "taxes" in year Y, which would have been equivalent to salary in year X.

nmrm2 11y ago
> It is when the government introduces new "taxes" in year Y, which would have been equivalent to salary in year X. This is a different argument and I've already addressed it in my post above: It's slightly more reasonable to argue that additional taxes have eaten up projected wage increases. (But that argument is wrong.) Again, the argument you are making is that taxes offset increases in income that would have increased otherwise, NOT that income has actually increased. But, as I stated above, this argument is clearly and obviously wrong -- a conclusion that is unambiguously supported by the data. Tax increases cannot explain a multi-decade stagnation in income, ESPECIALLY because NET corporate taxes have net decreased in that period of time [1]. (As a complete aside, when every corporate tax break is passed on to either the customer or the employee, I'll be ready to entertain even the criteria I established above. But while companies pocket the difference and perform stock buy backs [2], economists who argue tax increases count as increases in income are being disingenuous (edit: changed wording). [1] https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States#/media/File:US_Effective_Corporate_Tax_Rate_1947-2011_v2.jpg https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_St... [2] Clinton mentioned that H.W. Bush warned him not to provide a no-strings-attached tax holiday for this exact reason; see his latest interview on the Daily Show.
- JesperRavn 11y ago
  Please be civil, I'm not going to "fuck off" just because you argue in an aggressive manner. All your verbal arguments are obfuscation. This is simple arithmetic. What we would like to measure is the total post-tax and post-govt spending utility of a person: total utility = post-tax compensation + govt spending per person. That is what should be going up. But it's hard to measure all these things, so instead we can try to measure total compensation. When you redefine health care to be a tax, you are moving health care from the "post-tax compensation" category, to the "govt spending per person" category. Then you are arguing that post-tax compensation is going down, but that is just because of your accounting choice. Your logic would only apply if the government was initially providing free healthcare, and then moved to a regime where healthcare was provided by employers, which is not what happened. The problem with your reasoning is that it deals with everything except economic fundamentals, i.e. total consumption per person.
  - nmrm2 11y ago
    > Please be civil, I'm not going to "fuck off" Sorry, I didn't mean you specifically (unless you're an economist, I guess). You're right though, I've changed the wording. > Your logic would only apply if the government was initially providing free healthcare, and then moved to a regime where healthcare was provided by employers, which is not what happened. The government shifted the responsibility for insurance from individuals to corporations. Fact: if a company does not provide insurance, then they pay a tax. Fact: SCOTUS called this requirement a tax. > The problem with your reasoning is that it deals with everything except economic fundamentals, i.e. total consumption per person. The problem with your argument is that you assume that taxes attached to empoyment are somehow different from other taxes, and ignore the fact that businesses have benefited from decreased taxes for decades and yet wages have stagnated. (Edit: Concretely, if I impose a new flat tax on corporate profits, does that count as "compensation"? No, it doesn't. The issue of how it effects compensation is separate. Just because a tax is attached to employment doesn't make that tax part of compensation.) Again, the issue is dead simple: do increased corporate taxes explain income stagnation? Given that corporate taxes have in fact decreased over the time period we are talking about, the causation you're proposed is literally vacuous ("vacuous" here is a technical description of the problem with your argument, not an insult). In general, think of taxes attached to income "use taxes" on the country's human capital, rather than "mandatory employee compensation". Because historically we have never included taxes as part of "compensation", and starting that practice now is uninformative unless we take into account the global perspective on corporate taxes.
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nmrm2 11y ago
> So if the government taxed each corporation $1000 per employee, then gave you that $1000 back at the end of the year, that would mean your wages were less by $1000 a year? In many cases is roughly what social security does. In almost all cases, this is not too grossly far off from what social security does. No, employer's contributions to social security are not typically counted as compensation. More importantly, though, this is beside the point because a) the exact thing you describe doesn't happen in the US; b) to the extent things like it happen, we don't historically consider them compensatory; and c) again, taxes can't explain income stagnation when net taxation is down... so even if what you're saying is true, it's irrelevant to the central point of the discussion.

refurb 11y ago

That still makes no sense. The ACA only requires certain sized employers to either pay for your insurance or give you the cash to buy your own. If your employer is paying $6K per year, that is additional compensation beyond the $2K per year minimal plan the have to pay for.