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Still think we have a revenue problem? (Page 2)
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 2013-03-05 3:26 PM in reply to: #4647585 |
Member  465  |  Subject: RE: Still think we have a revenue problem?jgaither - 2013-03-05 3:08 PM Jackemy1 - 2013-03-05 3:00 PM chirunner134 - 2013-03-05 2:18 PM in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
I look at this way, one is a salary adjustment the other is a raise. Depends on how your company views it's employees as to whether it's inflation based or value based. I personally prefer the one that is value based.
On a separate note. I'd like to see the figures on an inflation adjusted basis and compared to GDP as opposed to an aggregate number. THAT tells me whether the revenue was the highest or not as an economic indicator. My impression is that in the 60's it was actually higher. That is JUST an impression though and really says absolutely NOTHING about the problem in question. I would offer that the true indicator to show the increase or decrease of government drain on the economy is tax revenue as a percentage of the GDP less the government expenditure component of GDP. That would give a real indication of the amount ofl transfer of the economy from the of private sector to the public sector.
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| 2013-03-05 3:48 PM in reply to: #4647603 |
Member 465 | Subject: RE: Still think we have a revenue problem? trinnas - 2013-03-05 3:26 PM Jackemy1 - 2013-03-05 4:00 PM chirunner134 - 2013-03-05 2:18 PM Jackemy1 - 2013-03-05 1:00 PM chirunner134 - 2013-03-05 11:33 AM according to http://www.usinflationcalculator.com/ 2.6in 2007 should be 2.88 trillion in 2013 just to keep up with inflation. So yes I still think its a revenue issue. A work work out buddy and I agree more of a payroll issue. high unemployment and wages stagnated or gone down for many people that part of the problem when the cost has gone up for everything else. Huh? I should pay more taxes regardless of my income because gas and beer cost more? I don't understand what the relationship of inflation to income taxes is.
in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
Actually inflation has a great deal of bearing on how much value you bring to the company. That is the whole concept of inflation. If you make 10 widgets for which the company makes $100 and pays you $30. If, due to inflation, next year the company makes $110 for your 10 widgets and still only pays you $30 then the value of what you produce has gone up and your pay has not increased accordingly. Did you all of a sudden become less valuable to the company? the eroding value of money has nothing to do with your value to a company. Let's take your example. Say the company buys bread with the profits from the widgets and it can buy 10 loaves of bread for $100 in year one. In year two with inflation it cost $110 to by the same 10 loaves. The value to the company of that employee didn't change. They can still only buy 10 loaves of bread with the production of that employee. Now Chirunner is right that inflationary pressures may cause labor rates to rise because supply (the workers in a labor market) will say the money offered to make a widget will only buy 9 loaves of bread this year when it bought 10 last years and they won't work for less than 10. But then again the company is not getting anymore value from the employee. It is just that cost has increase per unit of value received from that employee.
Edited by Jackemy1 2013-03-05 3:50 PM |
| 2013-03-05 3:52 PM in reply to: #4647605 |
Master 2083  Houston, TX | Subject: RE: Still think we have a revenue problem? Jackemy1 - 2013-03-05 3:26 PM jgaither - 2013-03-05 3:08 PM Jackemy1 - 2013-03-05 3:00 PM chirunner134 - 2013-03-05 2:18 PM in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
I look at this way, one is a salary adjustment the other is a raise. Depends on how your company views it's employees as to whether it's inflation based or value based. I personally prefer the one that is value based.
On a separate note. I'd like to see the figures on an inflation adjusted basis and compared to GDP as opposed to an aggregate number. THAT tells me whether the revenue was the highest or not as an economic indicator. My impression is that in the 60's it was actually higher. That is JUST an impression though and really says absolutely NOTHING about the problem in question. I would offer that the true indicator to show the increase or decrease of government drain on the economy is tax revenue as a percentage of the GDP less the government expenditure component of GDP. That would give a real indication of the amount ofl transfer of the economy from the of private sector to the public sector.
Keeping in mind that some government services (like the national park service) do generate private sector revenues, but without getting too deep, I could go with that. |
| 2013-03-05 5:11 PM in reply to: #4647603 |
Pro 9391 Omaha, NE | Subject: RE: Still think we have a revenue problem? trinnas - 2013-03-05 3:26 PM Jackemy1 - 2013-03-05 4:00 PM chirunner134 - 2013-03-05 2:18 PM Jackemy1 - 2013-03-05 1:00 PM chirunner134 - 2013-03-05 11:33 AM according to http://www.usinflationcalculator.com/ 2.6in 2007 should be 2.88 trillion in 2013 just to keep up with inflation. So yes I still think its a revenue issue. A work work out buddy and I agree more of a payroll issue. high unemployment and wages stagnated or gone down for many people that part of the problem when the cost has gone up for everything else. Huh? I should pay more taxes regardless of my income because gas and beer cost more? I don't understand what the relationship of inflation to income taxes is.
in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
Actually inflation has a great deal of bearing on how much value you bring to the company. That is the whole concept of inflation. If you make 10 widgets for which the company makes $100 and pays you $30. If, due to inflation, next year the company makes $110 for your 10 widgets and still only pays you $30 then the value of what you produce has gone up and your pay has not increased accordingly. Did you all of a sudden become less valuable to the company? Too bad it doesn't work the other way. I can only sell the 10 widgets for $70 that I used to sell for $100 but my worker now demands $40. lol |
| 2013-03-05 5:15 PM in reply to: #4647729 |
Elite 4564 Boise | Subject: RE: Still think we have a revenue problem? tuwood - 2013-03-05 4:11 PM trinnas - 2013-03-05 3:26 PM Jackemy1 - 2013-03-05 4:00 PM chirunner134 - 2013-03-05 2:18 PM Jackemy1 - 2013-03-05 1:00 PM chirunner134 - 2013-03-05 11:33 AM according to http://www.usinflationcalculator.com/ 2.6in 2007 should be 2.88 trillion in 2013 just to keep up with inflation. So yes I still think its a revenue issue. A work work out buddy and I agree more of a payroll issue. high unemployment and wages stagnated or gone down for many people that part of the problem when the cost has gone up for everything else. Huh? I should pay more taxes regardless of my income because gas and beer cost more? I don't understand what the relationship of inflation to income taxes is.
in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
Actually inflation has a great deal of bearing on how much value you bring to the company. That is the whole concept of inflation. If you make 10 widgets for which the company makes $100 and pays you $30. If, due to inflation, next year the company makes $110 for your 10 widgets and still only pays you $30 then the value of what you produce has gone up and your pay has not increased accordingly. Did you all of a sudden become less valuable to the company? Too bad it doesn't work the other way. I can only sell the 10 widgets for $70 that I used to sell for $100 but my worker now demands $40. lol
On my end, the widget sells for $50 and it costs $49. |
| 2013-03-05 5:36 PM in reply to: #4647631 |
Champion 18680 Lost in the Luminiferous Aether | Subject: RE: Still think we have a revenue problem? Jackemy1 - 2013-03-05 4:48 PM trinnas - 2013-03-05 3:26 PM Jackemy1 - 2013-03-05 4:00 PM chirunner134 - 2013-03-05 2:18 PM Jackemy1 - 2013-03-05 1:00 PM chirunner134 - 2013-03-05 11:33 AM according to http://www.usinflationcalculator.com/ 2.6in 2007 should be 2.88 trillion in 2013 just to keep up with inflation. So yes I still think its a revenue issue. A work work out buddy and I agree more of a payroll issue. high unemployment and wages stagnated or gone down for many people that part of the problem when the cost has gone up for everything else. Huh? I should pay more taxes regardless of my income because gas and beer cost more? I don't understand what the relationship of inflation to income taxes is.
in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
Actually inflation has a great deal of bearing on how much value you bring to the company. That is the whole concept of inflation. If you make 10 widgets for which the company makes $100 and pays you $30. If, due to inflation, next year the company makes $110 for your 10 widgets and still only pays you $30 then the value of what you produce has gone up and your pay has not increased accordingly. Did you all of a sudden become less valuable to the company? the eroding value of money has nothing to do with your value to a company. Let's take your example. Say the company buys bread with the profits from the widgets and it can buy 10 loaves of bread for $100 in year one. In year two with inflation it cost $110 to by the same 10 loaves. The value to the company of that employee didn't change. They can still only buy 10 loaves of bread with the production of that employee. Now Chirunner is right that inflationary pressures may cause labor rates to rise because supply (the workers in a labor market) will say the money offered to make a widget will only buy 9 loaves of bread this year when it bought 10 last years and they won't work for less than 10. But then again the company is not getting anymore value from the employee. It is just that cost has increase per unit of value received from that employee.
Yes but in your example the company paid the employee the equvalent of 3 loaves of bread but now only pays the equivalent of 2.75 loaves of bread so again did the employee's value to the company decrease in any way? |
| 2013-03-05 5:39 PM in reply to: #4647729 |
Champion 18680 Lost in the Luminiferous Aether | Subject: RE: Still think we have a revenue problem? tuwood - 2013-03-05 6:11 PM trinnas - 2013-03-05 3:26 PM Jackemy1 - 2013-03-05 4:00 PM chirunner134 - 2013-03-05 2:18 PM Jackemy1 - 2013-03-05 1:00 PM chirunner134 - 2013-03-05 11:33 AM according to http://www.usinflationcalculator.com/ 2.6in 2007 should be 2.88 trillion in 2013 just to keep up with inflation. So yes I still think its a revenue issue. A work work out buddy and I agree more of a payroll issue. high unemployment and wages stagnated or gone down for many people that part of the problem when the cost has gone up for everything else. Huh? I should pay more taxes regardless of my income because gas and beer cost more? I don't understand what the relationship of inflation to income taxes is.
in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
Actually inflation has a great deal of bearing on how much value you bring to the company. That is the whole concept of inflation. If you make 10 widgets for which the company makes $100 and pays you $30. If, due to inflation, next year the company makes $110 for your 10 widgets and still only pays you $30 then the value of what you produce has gone up and your pay has not increased accordingly. Did you all of a sudden become less valuable to the company? Too bad it doesn't work the other way. I can only sell the 10 widgets for $70 that I used to sell for $100 but my worker now demands $40. lol Yes this is why deflation is good for workers and bad for employers; except of course, the employee then puts off major purchases hoping the prices will continue to deflate leading to a deflationary spiral. |
| 2013-03-06 8:57 AM in reply to: #4646125 |
Elite 4564 Boise | Subject: RE: Still think we have a revenue problem? http://www.bloomberg.com/news/2013-03-05/tom-coburn-s-lonely-campaign-against-government-waste.html
Here is why I know neither side is really serious about cutting spending. |
| 2013-03-06 9:27 AM in reply to: #4646277 |
Master 1440 | Subject: RE: Still think we have a revenue problem? JoshR - 2013-03-04 6:27 PM The best part about this is Democrats have the most revenue in history and now that we have some actual spending cuts kicking in, Republicans don't want to cut spending (sequestration). Everyone just wants to grow our way out of the deficit. These are not "spending cuts" they are reductutions in the rate of growth. A spending cut would be saying sell the Caddilac and drive a cheaper chevy. All this is saying is that you can't have the mercedes you can opnly have a newer Caddilac. |
| 2013-03-06 9:39 AM in reply to: #4647369 |
Master 1440 | Subject: RE: Still think we have a revenue problem? rayd - 2013-03-05 2:14 PM mr2tony - 2013-03-04 4:33 PM JoshR - 2013-03-04 5:27 PM The best part about this is Democrats have the most revenue in history and now that we have some actual spending cuts kicking in, Republicans don't want to cut spending (sequestration). Everyone just wants to grow our way out of the deficit. Nobody wants to pay more or cut programs they feel are worthy . Classic NIMBY politics. This is exactly why I support accross the board cuts...everywhere! These knuckleheads in DC will not agree to have one of their pet projects cut or reduced...so I say everyone makes a hit. If they did it right, meaning cut 10 percent fat from their program, Americans would see little, if any effect from the cuts. And to any agency official that claims they have no fat to trim from their budget...we all know they are full of s^#! It would be really nice if it worked that way but when the President comes out and says that Meat inspections will be cut, and fire and Police personnel, TSA workers so the lines will be longer, that is playing politics. A leaked email from an Agriculture Department field officer adds fuel to claims President Obama's political strategy is to make the billions in recent federal budget cuts as painful as possible to win the public opinion battle against Republicans.
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| 2013-03-06 9:57 AM in reply to: #4648348 |
Expert 3126 Boise, ID | Subject: RE: Still think we have a revenue problem? JoshR - 2013-03-06 7:57 AM http://www.bloomberg.com/news/2013-03-05/tom-coburn-s-lonely-campaign-against-government-waste.html
Here is why I know neither side is really serious about cutting spending. You think that is bad, check this out. They can't even cut $700,000 a year from a "team" that hasn't met in 3 years! http://paul.senate.gov/?p=press_release&id=723 |
| 2013-03-06 11:12 AM in reply to: #4647766 |
Member 465 | Subject: RE: Still think we have a revenue problem? trinnas - 2013-03-05 5:36 PM Jackemy1 - 2013-03-05 4:48 PM trinnas - 2013-03-05 3:26 PM Jackemy1 - 2013-03-05 4:00 PM chirunner134 - 2013-03-05 2:18 PM Jackemy1 - 2013-03-05 1:00 PM chirunner134 - 2013-03-05 11:33 AM according to http://www.usinflationcalculator.com/ 2.6in 2007 should be 2.88 trillion in 2013 just to keep up with inflation. So yes I still think its a revenue issue. A work work out buddy and I agree more of a payroll issue. high unemployment and wages stagnated or gone down for many people that part of the problem when the cost has gone up for everything else. Huh? I should pay more taxes regardless of my income because gas and beer cost more? I don't understand what the relationship of inflation to income taxes is.
in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
Actually inflation has a great deal of bearing on how much value you bring to the company. That is the whole concept of inflation. If you make 10 widgets for which the company makes $100 and pays you $30. If, due to inflation, next year the company makes $110 for your 10 widgets and still only pays you $30 then the value of what you produce has gone up and your pay has not increased accordingly. Did you all of a sudden become less valuable to the company? the eroding value of money has nothing to do with your value to a company. Let's take your example. Say the company buys bread with the profits from the widgets and it can buy 10 loaves of bread for $100 in year one. In year two with inflation it cost $110 to by the same 10 loaves. The value to the company of that employee didn't change. They can still only buy 10 loaves of bread with the production of that employee. Now Chirunner is right that inflationary pressures may cause labor rates to rise because supply (the workers in a labor market) will say the money offered to make a widget will only buy 9 loaves of bread this year when it bought 10 last years and they won't work for less than 10. But then again the company is not getting anymore value from the employee. It is just that cost has increase per unit of value received from that employee.
Yes but in your example the company paid the employee the equvalent of 3 loaves of bread but now only pays the equivalent of 2.75 loaves of bread so again did the employee's value to the company decrease in any way? Not to be cold but the value of the employee is the end product the the consumer is willing to pay and really has nothing to do with the example you provided. The value of the employee to the company doesn't change with the employees reduction in purchasing power. (god, I sound like such a Paulian....)
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| 2013-03-06 11:35 AM in reply to: #4648571 |
Champion 18680 Lost in the Luminiferous Aether | Subject: RE: Still think we have a revenue problem? Jackemy1 - 2013-03-06 12:12 PM trinnas - 2013-03-05 5:36 PM Jackemy1 - 2013-03-05 4:48 PM trinnas - 2013-03-05 3:26 PM Jackemy1 - 2013-03-05 4:00 PM chirunner134 - 2013-03-05 2:18 PM Jackemy1 - 2013-03-05 1:00 PM chirunner134 - 2013-03-05 11:33 AM according to http://www.usinflationcalculator.com/ 2.6in 2007 should be 2.88 trillion in 2013 just to keep up with inflation. So yes I still think its a revenue issue. A work work out buddy and I agree more of a payroll issue. high unemployment and wages stagnated or gone down for many people that part of the problem when the cost has gone up for everything else. Huh? I should pay more taxes regardless of my income because gas and beer cost more? I don't understand what the relationship of inflation to income taxes is.
in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
Actually inflation has a great deal of bearing on how much value you bring to the company. That is the whole concept of inflation. If you make 10 widgets for which the company makes $100 and pays you $30. If, due to inflation, next year the company makes $110 for your 10 widgets and still only pays you $30 then the value of what you produce has gone up and your pay has not increased accordingly. Did you all of a sudden become less valuable to the company? the eroding value of money has nothing to do with your value to a company. Let's take your example. Say the company buys bread with the profits from the widgets and it can buy 10 loaves of bread for $100 in year one. In year two with inflation it cost $110 to by the same 10 loaves. The value to the company of that employee didn't change. They can still only buy 10 loaves of bread with the production of that employee. Now Chirunner is right that inflationary pressures may cause labor rates to rise because supply (the workers in a labor market) will say the money offered to make a widget will only buy 9 loaves of bread this year when it bought 10 last years and they won't work for less than 10. But then again the company is not getting anymore value from the employee. It is just that cost has increase per unit of value received from that employee.
Yes but in your example the company paid the employee the equvalent of 3 loaves of bread but now only pays the equivalent of 2.75 loaves of bread so again did the employee's value to the company decrease in any way? Not to be cold but the value of the employee is the end product the the consumer is willing to pay and really has nothing to do with the example you provided. The value of the employee to the company doesn't change with the employees reduction in purchasing power. (god, I sound like such a Paulian....)
The employees value to the company has everything to do with their purchasing power. Money is only an intermediary. If you are paying me the equivalent of 3 loaves of bread and due to inflation next year you are only paying me the equivalent of 2.5 loaves of bread any you are still getting your 10 loaves of bread out of my work then who is getting shorted on value? My value to the company has to do with how many loaves of bread I earn for the company. That has not changed. That is why inflation is the hidden tax it effectively reduces ones income for the same work. |
| 2013-03-06 11:50 AM in reply to: #4647774 |
Member 465 | Subject: RE: Still think we have a revenue problem? trinnas - 2013-03-05 5:39 PM tuwood - 2013-03-05 6:11 PM trinnas - 2013-03-05 3:26 PM Jackemy1 - 2013-03-05 4:00 PM chirunner134 - 2013-03-05 2:18 PM Jackemy1 - 2013-03-05 1:00 PM chirunner134 - 2013-03-05 11:33 AM according to http://www.usinflationcalculator.com/ 2.6in 2007 should be 2.88 trillion in 2013 just to keep up with inflation. So yes I still think its a revenue issue. A work work out buddy and I agree more of a payroll issue. high unemployment and wages stagnated or gone down for many people that part of the problem when the cost has gone up for everything else. Huh? I should pay more taxes regardless of my income because gas and beer cost more? I don't understand what the relationship of inflation to income taxes is.
in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
Actually inflation has a great deal of bearing on how much value you bring to the company. That is the whole concept of inflation. If you make 10 widgets for which the company makes $100 and pays you $30. If, due to inflation, next year the company makes $110 for your 10 widgets and still only pays you $30 then the value of what you produce has gone up and your pay has not increased accordingly. Did you all of a sudden become less valuable to the company? Too bad it doesn't work the other way. I can only sell the 10 widgets for $70 that I used to sell for $100 but my worker now demands $40. lol Yes this is why deflation is good for workers and bad for employers; except of course, the employee then puts off major purchases hoping the prices will continue to deflate leading to a deflationary spiral. Deflation creates unemployment which is not good for the worker. Deflationary spirals (ie. the great depression) is a the cycle where the reduction of labor reduces demand. Lower demand lowers prices below production cost which reduces production. Lower production creates more reduction of labor which continues the cycle. Pent up consumerism (i.e. holding off a purchase until the price is low enough) is just a short term in-equilibrium in the market where the price point is above the point when the supply and demand curve meet. It is created by a timing difference in information. For example, information in the stock market spread almost instantly so prices are only out of equilibrium for a very short time period. The housing market would a market which would stay in periods of in-equilibrium for much longer periods of time since market info distributes much slower. |
| 2013-03-06 11:55 AM in reply to: #4648627 |
Champion 18680 Lost in the Luminiferous Aether | Subject: RE: Still think we have a revenue problem? Jackemy1 - 2013-03-06 12:50 PM trinnas - 2013-03-05 5:39 PM tuwood - 2013-03-05 6:11 PM trinnas - 2013-03-05 3:26 PM Jackemy1 - 2013-03-05 4:00 PM chirunner134 - 2013-03-05 2:18 PM Jackemy1 - 2013-03-05 1:00 PM chirunner134 - 2013-03-05 11:33 AM according to http://www.usinflationcalculator.com/ 2.6in 2007 should be 2.88 trillion in 2013 just to keep up with inflation. So yes I still think its a revenue issue. A work work out buddy and I agree more of a payroll issue. high unemployment and wages stagnated or gone down for many people that part of the problem when the cost has gone up for everything else. Huh? I should pay more taxes regardless of my income because gas and beer cost more? I don't understand what the relationship of inflation to income taxes is.
in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
Actually inflation has a great deal of bearing on how much value you bring to the company. That is the whole concept of inflation. If you make 10 widgets for which the company makes $100 and pays you $30. If, due to inflation, next year the company makes $110 for your 10 widgets and still only pays you $30 then the value of what you produce has gone up and your pay has not increased accordingly. Did you all of a sudden become less valuable to the company? Too bad it doesn't work the other way. I can only sell the 10 widgets for $70 that I used to sell for $100 but my worker now demands $40. lol Yes this is why deflation is good for workers and bad for employers; except of course, the employee then puts off major purchases hoping the prices will continue to deflate leading to a deflationary spiral. Deflation creates unemployment which is not good for the worker. Deflationary spirals (ie. the great depression) is a the cycle where the reduction of labor reduces demand. Lower demand lowers prices below production cost which reduces production. Lower production creates more reduction of labor which continues the cycle. Pent up consumerism (i.e. holding off a purchase until the price is low enough) is just a short term in-equilibrium in the market where the price point is above the point when the supply and demand curve meet. It is created by a timing difference in information. For example, information in the stock market spread almost instantly so prices are only out of equilibrium for a very short time period. The housing market would a market which would stay in periods of in-equilibrium for much longer periods of time since market info distributes much slower. Sorry I was being a little facitious and way overly simplistic.
Edited by trinnas 2013-03-06 11:56 AM |
| 2013-03-06 11:56 AM in reply to: #4648602 |
Member 465 | Subject: RE: Still think we have a revenue problem? trinnas - 2013-03-06 11:35 AM Jackemy1 - 2013-03-06 12:12 PM trinnas - 2013-03-05 5:36 PM Jackemy1 - 2013-03-05 4:48 PM trinnas - 2013-03-05 3:26 PM Jackemy1 - 2013-03-05 4:00 PM chirunner134 - 2013-03-05 2:18 PM Jackemy1 - 2013-03-05 1:00 PM chirunner134 - 2013-03-05 11:33 AM according to http://www.usinflationcalculator.com/ 2.6in 2007 should be 2.88 trillion in 2013 just to keep up with inflation. So yes I still think its a revenue issue. A work work out buddy and I agree more of a payroll issue. high unemployment and wages stagnated or gone down for many people that part of the problem when the cost has gone up for everything else. Huh? I should pay more taxes regardless of my income because gas and beer cost more? I don't understand what the relationship of inflation to income taxes is.
in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
Actually inflation has a great deal of bearing on how much value you bring to the company. That is the whole concept of inflation. If you make 10 widgets for which the company makes $100 and pays you $30. If, due to inflation, next year the company makes $110 for your 10 widgets and still only pays you $30 then the value of what you produce has gone up and your pay has not increased accordingly. Did you all of a sudden become less valuable to the company? the eroding value of money has nothing to do with your value to a company. Let's take your example. Say the company buys bread with the profits from the widgets and it can buy 10 loaves of bread for $100 in year one. In year two with inflation it cost $110 to by the same 10 loaves. The value to the company of that employee didn't change. They can still only buy 10 loaves of bread with the production of that employee. Now Chirunner is right that inflationary pressures may cause labor rates to rise because supply (the workers in a labor market) will say the money offered to make a widget will only buy 9 loaves of bread this year when it bought 10 last years and they won't work for less than 10. But then again the company is not getting anymore value from the employee. It is just that cost has increase per unit of value received from that employee.
Yes but in your example the company paid the employee the equvalent of 3 loaves of bread but now only pays the equivalent of 2.75 loaves of bread so again did the employee's value to the company decrease in any way? Not to be cold but the value of the employee is the end product the the consumer is willing to pay and really has nothing to do with the example you provided. The value of the employee to the company doesn't change with the employees reduction in purchasing power. (god, I sound like such a Paulian....)
The employees value to the company has everything to do with their purchasing power. Money is only an intermediary. If you are paying me the equivalent of 3 loaves of bread and due to inflation next year you are only paying me the equivalent of 2.5 loaves of bread any you are still getting your 10 loaves of bread out of my work then who is getting shorted on value? My value to the company has to do with how many loaves of bread I earn for the company. That has not changed. That is why inflation is the hidden tax it effectively reduces ones income for the same work. You are right in that inflation is a hidden tax. Your still only making 10 widgets. Figure out a way to either make 11 widget or increase the margins on the 10 that you make and now you are creating value and are due a higher real wage. You would be correct that you could automatically demand and receive col increases if you were the only person that is qualified to make widgets for this company. But if you are not then you are at the whim of the labor market and inflation only is only one small influence on wage determination and not the driving factor of wage determination. Edited by Jackemy1 2013-03-06 12:01 PM |
| 2013-03-06 12:00 PM in reply to: #4648637 |
Champion 18680 Lost in the Luminiferous Aether | Subject: RE: Still think we have a revenue problem? Jackemy1 - 2013-03-06 12:56 PM trinnas - 2013-03-06 11:35 AM Jackemy1 - 2013-03-06 12:12 PM trinnas - 2013-03-05 5:36 PM Jackemy1 - 2013-03-05 4:48 PM trinnas - 2013-03-05 3:26 PM Jackemy1 - 2013-03-05 4:00 PM chirunner134 - 2013-03-05 2:18 PM Jackemy1 - 2013-03-05 1:00 PM chirunner134 - 2013-03-05 11:33 AM according to http://www.usinflationcalculator.com/ 2.6in 2007 should be 2.88 trillion in 2013 just to keep up with inflation. So yes I still think its a revenue issue. A work work out buddy and I agree more of a payroll issue. high unemployment and wages stagnated or gone down for many people that part of the problem when the cost has gone up for everything else. Huh? I should pay more taxes regardless of my income because gas and beer cost more? I don't understand what the relationship of inflation to income taxes is.
in theory you should get a raise at least based on inflation. So tax revenue in theory should go up with them. You should get a raise based on your value to the company. Inflation has no bearing on how much value you bring to a company.
Actually inflation has a great deal of bearing on how much value you bring to the company. That is the whole concept of inflation. If you make 10 widgets for which the company makes $100 and pays you $30. If, due to inflation, next year the company makes $110 for your 10 widgets and still only pays you $30 then the value of what you produce has gone up and your pay has not increased accordingly. Did you all of a sudden become less valuable to the company? the eroding value of money has nothing to do with your value to a company. Let's take your example. Say the company buys bread with the profits from the widgets and it can buy 10 loaves of bread for $100 in year one. In year two with inflation it cost $110 to by the same 10 loaves. The value to the company of that employee didn't change. They can still only buy 10 loaves of bread with the production of that employee. Now Chirunner is right that inflationary pressures may cause labor rates to rise because supply (the workers in a labor market) will say the money offered to make a widget will only buy 9 loaves of bread this year when it bought 10 last years and they won't work for less than 10. But then again the company is not getting anymore value from the employee. It is just that cost has increase per unit of value received from that employee.
Yes but in your example the company paid the employee the equvalent of 3 loaves of bread but now only pays the equivalent of 2.75 loaves of bread so again did the employee's value to the company decrease in any way? Not to be cold but the value of the employee is the end product the the consumer is willing to pay and really has nothing to do with the example you provided. The value of the employee to the company doesn't change with the employees reduction in purchasing power. (god, I sound like such a Paulian....)
The employees value to the company has everything to do with their purchasing power. Money is only an intermediary. If you are paying me the equivalent of 3 loaves of bread and due to inflation next year you are only paying me the equivalent of 2.5 loaves of bread any you are still getting your 10 loaves of bread out of my work then who is getting shorted on value? My value to the company has to do with how many loaves of bread I earn for the company. That has not changed. That is why inflation is the hidden tax it effectively reduces ones income for the same work. You are right in that inflation is a hidden tax. Your still only making 10 widgets. Figure out a way to either make 11 widget or increase the margins on the 10 that you make and now you are creating value and are due a higher real wage. Yes if I increase production then I should according to your model get a raise above inflation thereby reflecting my true value to the company. We are naot talking about increasing value we are talking about inflaton where the nominal wage stays the same but the real wage goes down for the same amount of production/value to the company.
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