Raising taxes on the rich

[copperblade]

Good point. Have you noticed that the work-week has now become 80 hours? IOW, both husband and wife have to work for the same standard of living only one wage-earner could provide a generation ago. The proponents of a “living wage” start with the statement that a minimum wage-earner cannot support a family of four on just that one wage, and they build their whole argument around that. Well, hello-oh! Are two-wage-earner families supposed to work and pay taxes so the lower economic levels can enjoy a 40-hour work-week?

So what you think was the cause for this household 80 hour work-week? I don’t think it was because of taxes.

 

[JimG]

After WW-II, there was a wave of industrialization, accompanied by increases in productivity. Industrialization in many cases made the work less labor intensive. Workers earned better pay without the same extent of backbreaking labor. That’s a good thing. Living standards improved, and families prospered.

But inflation eroded the value of their work and their pay. In order to keep up the same standard of living, families began to have two wage earners instead of one. Now, as Sedonaman mentioned the work week has essentially doubled in order to keep up the same standard of living.

No only that, but the children of the WW-II generation wanted to improve the standard of living over their parents. They bought larger houses (for smaller families), then used the houses as piggy banks for cash when prices rose.

But prices don’t rise forever. The cash cow, in the form of ever increasing real estate values, has become anemic, and has to be fed instead of feeding us.

Possibly another wave of technological innovation could help to increase productivity and increase standards of living, but so far, nothing like that is on the horizon.

It seems that the post WW-II generations have lived in a rather inflationary bubble that is now deflating. Inflationary both in terms of monetary inflation, huge debt increases, and more work for the same standard of living. And despite what we might wish, the government can’t fix that. But it can make things worse.

 

[Monte_RCMS]

After WW-II, there was a wave of industrialization, accompanied by increases in productivity. Industrialization in many cases made the work less labor intensive. Workers earned better pay without the same extent of backbreaking labor. That’s a good thing. Living standards improved, and families prospered.

But inflation eroded the value of their work and their pay. In order to keep up the same standard of living, families began to have two wage earners instead of one. Now, as Sedonaman mentioned the work week has essentially doubled in order to keep up the same standard of living.

No only that, but the children of the WW-II generation wanted to improve the standard of living over their parents. They bought larger houses (for smaller families), then used the houses as piggy banks for cash when prices rose.

But prices don’t rise forever. The cash cow, in the form of ever increasing real estate values, has become anemic, and has to be fed instead of feeding us.

Possibly another wave of technological innovation could help to increase productivity and increase standards of living, but so far, nothing like that is on the horizon.

It seems that the post WW-II generations have lived in a rather inflationary bubble that is now deflating. Inflationary both in terms of monetary inflation, huge debt increases, and more work for the same standard of living. And despite what we might wish, the government can’t fix that. But it can make things worse.

It wasn’t inflation … it was the increase in the average person’s tax burden. One wage was no longer enough to pay all the taxes AND maintain a reasonable standard of living.

Add to that the increase in regulations that caused business operations to cost more and more, leaving less money for the employees.

 

[JimG]

It wasn’t inflation … it was the increase in the average person’s tax burden. One wage was no longer enough to pay all the taxes AND maintain a reasonable standard of living.

Add to that the increase in regulations that caused business operations to cost more and more, leaving less money for the employees.

One can say that families elected to have two parents working in order to provide an adequate living. On the other hand, if families in great numbers elect to not have both parents working, there would be fewer dollars chasing goods and services so prices would drop. To an extent, both parents going to work is self defeating, because when it is done by large numbers of people, prices rise to match the available income to spend.

I’ve noticed that some of my younger relatives who have become new mothers have made the decision to stay home once their first child is born. If that becomes a trend, it might be lamented by economists, since they believe that demand drives the economy and more workers drives demand. But it might also drive down prices and help families be more stable.

 

[davidmlamb]

Good point. Have you noticed that the work-week has now become 80 hours? IOW, both husband and wife have to work for the same standard of living only one wage-earner could provide a generation ago. The proponents of a “living wage” start with the statement that a minimum wage-earner cannot support a family of four on just that one wage, and they build their whole argument around that. Well, hello-oh! Are two-wage-earner families supposed to work and pay taxes so the lower economic levels can enjoy a 40-hour work-week?

The proponents of a living wage is the Catholic Church and the teachings of the Magesterium:

*2434 A just wage is the legitimate fruit of work. To refuse or withhold it can be a grave injustice.221 In determining fair pay both the needs and the contributions of each person must be taken into account. "Remuneration for work should guarantee man the opportunity to provide a dignified livelihood for himself and his family on the material, social, cultural and spiritual level, taking into account the role and the productivity of each, the state of the business, and the common good."222 Agreement between the parties is not sufficient to justify morally the amount to be received in wages.

Society must pursue economic justice and the economy must serve people, not the other way around. Employers must not “look upon their work people as their bondsmen, but … respect in every man his dignity as a person ennobled by Christian character.”[44] Employers contribute to the common good through the services or products they provide and by creating jobs that uphold the dignity and rights of workers.

Workers have a right to work, to earn a living wage, and to form trade unions[45] to protect their interests. All workers have a right to productive work, to decent and fair wages, and to safe working conditions.[46] Workers also have responsibilities—to provide a fair day’s work for a fair day’s pay, to treat employers and co-workers with respect, and to carry out their work in ways that contribute to the common good. Workers must “fully and faithfully” perform the work they have agreed to do. Rerum Novarum, Pope Leo XIII*

Peace,
David

 

[Scott_Lafrance]

The proponents of a living wage is the Catholic Church and the teachings of the Magesterium:

*2434 A just wage is the legitimate fruit of work. To refuse or withhold it can be a grave injustice.221 In determining fair pay both the needs and the contributions of each person must be taken into account. "Remuneration for work should guarantee man the opportunity to provide a dignified livelihood for himself and his family on the material, social, cultural and spiritual level, taking into account the role and the productivity of each, the state of the business, and the common good."222 Agreement between the parties is not sufficient to justify morally the amount to be received in wages. *

Society must pursue economic justice and the economy must serve people, not the other way around. Employers must not “look upon their work people as their bondsmen, but … respect in every man his dignity as a person ennobled by Christian character.”[44] Employers contribute to the common good through the services or products they provide and by creating jobs that uphold the dignity and rights of workers.

Workers have a right to work, to earn a living wage, and to form trade unions[45] to protect their interests. All workers have a right to productive work, to decent and fair wages, and to safe working conditions.[46] Workers also have responsibilities—to provide a fair day’s work for a fair day’s pay, to treat employers and co-workers with respect, and to carry out their work in ways that contribute to the common good. Workers must “fully and faithfully” perform the work they have agreed to do. Rerum Novarum, Pope Leo XIII

Peace,
David

A “Living Wage” is a vague, nefarious term that is used as a blugeon against business owners. Business owners have a right to run their business in a manner that allows them to stay in business, and they have a right to make profit for the risk they take. The right of a worker to earn a “Living Wage” doesn’t supercede this right. Additionally, most business owners I know want to treat their employees fairly and honestly. Government interference and regulations drive up the cost of doing business, often robbing it of the very money they could be using to pay employees a “Living Wage”.

 

[davidmlamb]

A “Living Wage” is a vague, nefarious term that is used as a blugeon against business owners. Business owners have a right to run their business in a manner that allows them to stay in business, and they have a right to make profit for the risk they take. The right of a worker to earn a “Living Wage” doesn’t supercede this right. Additionally, most business owners I know want to treat their employees fairly and honestly. Government interference and regulations drive up the cost of doing business, often robbing it of the very money they could be using to pay employees a “Living Wage”.

Your profile say’s you are Catholic. The Catholic Church is thye pillar and foundation of truth. The bible itself nrests on the pillars of the Church and the Church rests on the pillars of Christ. I just cited for you divine revelation on matters of economics and employment and you have just openly rejected the teachings of Christ. The church further teaches us that the development of economic activity and growth in production are meant to provide for the needs of human beings. Economic life is not meant solely to multiply goods produced and increase profit or power; it is ordered first of all to the service of persons, of the whole man, and of the entire human community. Economic activity, conducted according to its own proper methods, is to be exercised within the limits of the moral order, in keeping with social justice so as to correspond to God’s plan for man (CCC 2426). Let us hear the words of Jesus:

No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.
–Matthew 6:24

I think that you need to reflect on the teachings of Christ and allow those teachings which are spoken through the Church (Ephesians 3:10) to morally guide you and give you a truthful understanding of God’s economy.

What good will it be for a man if he gains the whole world, yet forfeits his soul? Or what can a man give in exchange for his soul?
– Matthew 16:26
:
David

 

[JimG]

The proponents of a living wage is the Catholic Church and the teachings of the Magesterium:

*2434 A just wage is the legitimate fruit of work. To refuse or withhold it can be a grave injustice.221 In determining fair pay both the needs and the contributions of each person must be taken into account. "Remuneration for work should guarantee man the opportunity to provide a dignified livelihood for himself and his family on the material, social, cultural and spiritual level, taking into account the role and the productivity of each, the state of the business, and the common good."222 Agreement between the parties is not sufficient to justify morally the amount to be received in wages.

Society must pursue economic justice and the economy must serve people, not the other way around. Employers must not “look upon their work people as their bondsmen, but … respect in every man his dignity as a person ennobled by Christian character.”[44] Employers contribute to the common good through the services or products they provide and by creating jobs that uphold the dignity and rights of workers.

Workers have a right to work, to earn a living wage, and to form trade unions[45] to protect their interests. All workers have a right to productive work, to decent and fair wages, and to safe working conditions.[46] Workers also have responsibilities—to provide a fair day’s work for a fair day’s pay, to treat employers and co-workers with respect, and to carry out their work in ways that contribute to the common good. Workers must “fully and faithfully” perform the work they have agreed to do. Rerum Novarum, Pope Leo XIII*

Peace,
David

So who is going to be appointed to ensure that the above is carried out? A federal bureaucrat? A federal agency? Who will flesh out what those statements mean in concrete situations? Shall we establish a new Federal Agency and empower it to write the regulations to enforce the requirements for a just wage? That way lies disaster.

And who is to receive a living wage, or a just wage? Teenagers? Working moms? Fathers of 12? Babysitters? Lemonade stand workers? In Rerum Novarum, a living wage was considered the wage necessary for a man to support his family. To even attempt to provide for that in today’s legal and regulatory environment would be a violation of several laws. It would require a married man to be paid more than a single man for the same job. It would require a head of household with 9 children to be paid more than a head of household with two children.

And with respect to this part: “Agreement between the parties is not sufficient to justify morally the amount to be received in wages.” Does that mean a Federal agency would have the authority to step in and void a labor agreement entered into by mutual consent or contract negotiations? Could a bureaucrat say: “No, that’s not enough pay.” or “No, that’s way too much.”?

I can already see the jobs disappearing overseas en masse if such a regulatory mess were even attempted. The current regulatory mess is bad enough.

 

[Scott_Lafrance]

Your profile say’s you are Catholic. The Catholic Church is thye pillar and foundation of truth. The bible itself nrests on the pillars of the Church and the Church rests on the pillars of Christ. I just cited for you divine revelation on matters of economics and employment and you have just openly rejected the teachings of Christ. The church further teaches us that the development of economic activity and growth in production are meant to provide for the needs of human beings. Economic life is not meant solely to multiply goods produced and increase profit or power; it is ordered first of all to the service of persons, of the whole man, and of the entire human community. Economic activity, conducted according to its own proper methods, is to be exercised within the limits of the moral order, in keeping with social justice so as to correspond to God’s plan for man (CCC 2426). Let us hear the words of Jesus:

No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.
–Matthew 6:24

I think that you need to reflect on the teachings of Christ and allow those teachings which are spoken through the Church (Ephesians 3:10) to morally guide you and give you a truthful understanding of God’s economy.

What good will it be for a man if he gains the whole world, yet forfeits his soul? Or what can a man give in exchange for his soul?
– Matthew 16:26
:
David

The Catholic Church, via the HIgh Scholastics at the School of Salamanca, are the ones that came up with the idea of the Free Market. Take it up with them. Also, the Church believes in the natural right of free property, stands steadfastedly against socialism. So what is your point, that a business owner, who risks eveything to create a business, has to pay employees to the point where it ruins his business. And don’t question my Catholicism until you get to know me a little better.

 

[ComputerGeek25]

The Catholic Church, via the HIgh Scholastics at the School of Salamanca, are the ones that came up with the idea of the Free Market. Take it up with them. Also, the Church believes in the natural right of free property, stands steadfastedly against socialism. So what is your point, that a business owner, who risks eveything to create a business, has to pay employees to the point where it ruins his business. And don’t question my Catholicism until you get to know me a little better.

It seems to me that many like to selectively read what the church actually writes - and that somehow if one considers the other side of the equation, one is not Catholic.

Ultimately, there is a balance between “living wages” and “profit” - where “living wages” and “profit” can be very subjective terms - leading to a very slippery slope. It is something that very faithful Catholics and the Church has thought about all throughout history.

 

[Scott_Lafrance]

It seems to me that many like to selectively read what the church actually writes - and that somehow if one considers the other side of the equation, one is not Catholic.

Ultimately, there is a balance between “living wages” and “profit” - where “living wages” and “profit” can be very subjective terms - leading to a very slippery slope. It is something that very faithful Catholics and the Church has thought about all throughout history.

Apparently, an employee has a greater right to earn a living wage than the owner of the business has to earn a profit from his business.

 

[copperblade]

The Catholic Church, via the HIgh Scholastics at the School of Salamanca, are the ones that came up with the idea of the Free Market.

Whatcha talkin bout Willis? By that logic, the Church stands by ideas invented at Notre Dame.

 

[Scott_Lafrance]

Whatcha talkin bout Willis? By that logic, the Church stands by ideas invented at Notre Dame.

The High Scholastics theory of the Free Market was based on the foundational theology of natural rights written by St. Thomas Aquinas, so its not just drivel.

 

[copperblade]

The High Scholastics theory of the Free Market was based on the foundational theology of natural rights written by St. Thomas Aquinas, so its not just drivel.

I’m sure it’s not, I’ll have a look. However, what the Church teaches about economic justice are in Populorum Progressio and Rerum Novarum. There may be other earlier encyclicals, but those are good because they are more recent and they paint a better moral picture.

I don’t want to be disingenuous, so I think the most relevant part of Populorum Novarum to this discussion is:

1. Government leaders, your task is to draw your communities into closer ties of solidarity with all men, and to convince them that they must accept the necessary taxes on their luxuries and their wasteful expenditures in order to promote the development of nations and the preservation of peace.

Rerum Novarum:

1. But although all citizens, without exception, can and ought to contribute to that common good in which individuals share so advantageously to themselves, yet it should not be supposed that all can contribute in the like way and to the same extent. No matter what changes may occur in forms of government, there will ever be differences and inequalities of condition in the State. Society cannot exist or be conceived of without them. Some there must be who devote themselves to the work of the commonwealth, who make the laws or administer justice, or whose advice and authority govern the nation in times of peace, and defend it in war. Such men clearly occupy the foremost place in the State, and should be held in highest estimation, for their work concerns most nearly and effectively the general interests of the community. Those who labor at a trade or calling do not promote the general welfare in such measure as this, but they benefit the nation, if less directly, in a most important manner. We have insisted, it is true, that, since the end of society is to make men better, the chief good that society can possess is virtue. Nevertheless, it is the business of a well-constituted body politic to see to the provision of those material and external helps “the use of which is necessary to virtuous action.”(28) Now, for the provision of such commodities, the labor of the working class - the exercise of their skill, and the employment of their strength, in the cultivation of the land, and in the workshops of trade - is especially responsible and quite indispensable. Indeed, their co-operation is in this respect so important that it may be truly said that it is only by the labor of working men that States grow rich. Justice, therefore, demands that the interests of the working classes should be carefully watched over by the administration, so that they who contribute so largely to the advantage of the community may themselves share in the benefits which they create-that being housed, clothed, and bodily fit, they may find their life less hard and more endurable. It follows that whatever shall appear to prove conducive to the well-being of those who work should obtain favorable consideration. There is no fear that solicitude of this kind will be harmful to any interest; on the contrary, it will be to the advantage of all, for it cannot but be good for the commonwealth to shield from misery those on whom it so largely depends for the things that it needs.

1. We have said that the State must not absorb the individual or the family; both should be allowed free and untrammelled action so far as is consistent with the common good and the interest of others. Rulers should, nevertheless, anxiously safeguard the community and all its members; the community, because the conservation thereof is so emphatically the business of the supreme power, that the safety of the commonwealth is not only the first law, but it is a government’s whole reason of existence; and the members, because both philosophy and the Gospel concur in laying down that the object of the government of the State should be, not the advantage of the ruler, but the benefit of those over whom he is placed. As the power to rule comes from God, and is, as it were, a participation in His, the highest of all sovereignties, it should be exercised as the power of God is exercised - with a fatherly solicitude which not only guides the whole, but reaches also individuals.

Still, when there is question of defending the rights of individuals, the poor and badly off have a claim to especial consideration. The richer class have many ways of shielding themselves, and stand less in need of help from the State; whereas the mass of the poor have no resources of their own to fall back upon, and must chiefly depend upon the assistance of the State. And it is for this reason that wage-earners, since they mostly belong in the mass of the needy, should be specially cared for and protected by the government.

Also, after looking at the economic theory you mentioned, it speaks against usury. Everything seems to point in the direction of the morality behind the thing, not the thing itself. The Church does not speak against government-run programs, or a specific level of taxation:

We do not judge it possible to enter into minute particulars touching the subject of organization; this must depend on national character, on practice and experience, on the nature and aim of the work to be done, on the scope of the various trades and employments, and on other circumstances of fact and of time - all of which should be carefully considered.

I think the bottom line is that if society runs well [becomes more virtuous] without government intervention it’s fine. If society runs well with government intervention, it’s also fine.

 

[ComputerGeek25]

I think the bottom line is that if society runs well [becomes more virtuous] without government intervention it’s fine. If society runs well with government intervention, it’s also fine.

I think the $64,000 question(s) is what level of government intervention is right as well as what it does. I know Conservatives get a bad rap about “being against the little guy” but there are several other moral questions that come to mind (I don’t have specific quotes):

1. Who should pay taxes? The “rich” should, but at what level do we consider “rich”?
2. What level is fair taxation? We need to respect the dignity of everyone including the “rich.”
3. What do government programs do to help get people off of “the dole” or at least help reduce their burdens on society? I know people that are on disability that could very well work part time, or at least re-adjust their career goals. Or you have generational welfare. The rules are also discourage people from working, in some cases.
4. This brings up the point that, in the US, approx. 50% of the wage earners do not pay federal income taxes. Now, why would someone on (generational) welfare or those who do not pay taxes vote against their self interests? They simply vote in politicians who promise not to cut benefits and to shift any burden onto others. This does not make sense.

 

[Scott_Lafrance]

I’m sure it’s not, I’ll have a look. However, what the Church teaches about economic justice are in Populorum Progressio and Rerum Novarum. There may be other earlier encyclicals, but those are good because they are more recent and they paint a better moral picture.

I don’t want to be disingenuous, so I think the most relevant part of Populorum Novarum to this discussion is:

Rerum Novarum:

Also, after looking at the economic theory you mentioned, it speaks against usury. Everything seems to point in the direction of the morality behind the thing, not the thing itself. The Church does not speak against government-run programs, or a specific level of taxation:

I think the bottom line is that if society runs well [becomes more virtuous] without government intervention it’s fine. If society runs well with government intervention, it’s also fine.

You forgot Centessimus Annus, which speaks to the principle of subsidiarity and the proper role of government.

 

[Monte_RCMS]

The proponents of a living wage is the Catholic Church and the teachings of the Magesterium:

*2434 A just wage is the legitimate fruit of work. To refuse or withhold it can be a grave injustice.221 In determining fair pay both the needs and the contributions of each person must be taken into account. "Remuneration for work should guarantee man the opportunity to provide a dignified livelihood for himself and his family on the material, social, cultural and spiritual level, taking into account the role and the productivity of each, the state of the business, and the common good."222 Agreement between the parties is not sufficient to justify morally the amount to be received in wages.

Society must pursue economic justice and the economy must serve people, not the other way around. Employers must not “look upon their work people as their bondsmen, but … respect in every man his dignity as a person ennobled by Christian character.”[44] Employers contribute to the common good through the services or products they provide and by creating jobs that uphold the dignity and rights of workers.

Workers have a right to work, to earn a living wage, and to form trade unions[45] to protect their interests. All workers have a right to productive work, to decent and fair wages, and to safe working conditions.[46] Workers also have responsibilities—to provide a fair day’s work for a fair day’s pay, to treat employers and co-workers with respect, and to carry out their work in ways that contribute to the common good. Workers must “fully and faithfully” perform the work they have agreed to do. Rerum Novarum, Pope Leo XIII*

Peace,
David

David,

I have no idea how much a “living wage” would be for you … or if you are single and living in a 100 sq ft room or with your parents I would pay you minimum legal wage, but if you married a widow with six kids I would have to raise your living wage to $50,000 per year for the same work.

But if my business was struggling and had severe ups and downs in income … say we got paid only after completing a delivery and some of our customers delayed payment or like the customer out on the West coast who paid me with a check that bounced … when I asked him why he ordered from me when he knew he couldn’t pay, he said that I had more money than him and it was ok to rip me off… but he was wrong; I was struggling but he was able to read about my product and order it … and some went bankrupt without paying at all … then I could not hire you … or anyone else.

I guess another issue is: do you really want to work? Are you willing to work? Or are you going to be like my sister’s kid, who just wants to sit around in the air conditioning and who always has an excuse … last time I asked him to make a delivery he managed to rip the transmission out of the company delivery vehicle.

Do you really want to work? Or do you just want to negotiate a calculation?

I just keep wondering.

I was at a store and one of the younger employees was complaining to another employee was that all he wanted was a just wage, four weeks vacation, paid medical, and a pension plan. I didn’t want to engage him in debate, but as he went on and listed his wants, I kept adding up the dollar signs. Not sure that anybody could actually afford pay that much unless the guy was a real whiz bang in bringing in mucho sales. But he seemed to spend so much energy in bitterness about how he was being shortchanged, that I’m not sure how much work he would actually accomplish.

Maybe he felt he was worth it just by being there.

 

[Monte_RCMS]

It seems to me that many like to selectively read what the church actually writes - and that somehow if one considers the other side of the equation, one is not Catholic.

Ultimately, there is a balance between “living wages” and “profit” - where “living wages” and “profit” can be very subjective terms - leading to a very slippery slope. It is something that very faithful Catholics and the Church has thought about all throughout history.

“Living wages” is very subjective.

But “profits” are very matter of fact. Mathematically precise. Absolutely concrete. Nothing subjective at all. Extremely and totally objective.

Profit is the arithmetic difference between revenues and expenses. That’s it.

[However, if your expenses are higher than your revenues, then you have a loss. ]

Revenues greater than expenses = profit

Expenses greater than revenues = loss

If you have a profit, you stay in business … you get to fight another day.

If you have a loss, you may have to close your doors … go out of business … let your employees go and become defunct.

 

[copperblade]

You forgot Centessimus Annus, which speaks to the principle of subsidiarity and the proper role of government.

I’ll take another look at it. I thought it was mostly just referencing previous encyclicals.

I’ll take it from your signature that you like Distributism… what role do taxes and government spending play?

 

[copperblade]

Hmmm, I also found this from Quadragesimo Anno

Just as the unity of human society cannot be built upon ‘class’ conflict, so the proper ordering of economic affairs cannot be left to the free play of rugged competition. From this source, as from a polluted spring, have proceeded all the errors of the ‘individualistic’ school. This school, forgetful or ignorant of the social and moral aspects of economic activities, regarded these as completely free and immune from any intervention by public authority, for they would have in the market place and in unregulated competition [in mercato seu libero competitorum certamine] a principle of self-direction more suitable for guiding them than any created intellect which might intervene.

Guess I have more reading to do…