The U.S. labor shortage is reaching a critical point

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dvdjs said:
I agree, but I was hoping to find out how many are in the group refuse to look for work, versus retired or engaged in non-paying work like taking care of the home and children.
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I agree that these are important questions, unfortunately the data tells us very little about those who choose not to participate in the labor force.
 
lmachine said:
As much as he wants, business expenses are generally tax deductible if you weren’t aware.
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it varies. Some are capitalized. But if you don’t have a problem with those expenses being deductible, how much would you allow the owner for salary?

How much would you allow the owner of a major company?
 
Problem with higher taxes on the wealthy as that their return on risk can get lowered to the point where they don’t believe the investment is worth the risk. And then where are the jobs that would have been created? In other words, a government can only go so far with taxing the wealthy, above a certain point, the government is guaranteed to get diminishing returns because more investments won’t get made in the first place. Ok by the wealthy, they can still live on their capital, not so okay for the worker who doesn’t have much beyond his labor.
 
Zzyzx_Road said:
Problem with higher taxes on the wealthy as that their return on risk can get lowered to the point where they don’t believe the investment is worth the risk.
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What is the value of the marginal tax rate at the turning point?
 
dvdjs said:
What is the value of the marginal tax rate at the turning point?
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That is dependent on the individual entrepreneur.

But allow me to draw you a quick and dirty example. BB has $1m to invest in a business. BB expects a return of 30% to 40% against the risk of losing it all if the business fails. In real life a risky investment activity like this would usually be in addition to other income producing activities a typical multi-millionaire might have so the full marginal rate will be in play here for all income claimed in this venture. Let’s say he does this in California. Tax rate is 39% federal and 9% state for 48% total. Now that has cut his anticipated return almost in half, but BB still the same risk of failure. At that point, BB may decide the reduced ROI is not worth it and not do the venture in the first place. Get enough potential investors feeling the same way and that’s how government can cause a recession if not depression with high enough tax rates.

Where the line is, is up to individual investors as I said before, and it varies in different jurisdictions, but the point stands: make that rate high enough and you will succeed in making the typical entrepreneurial investor think twice.

So the ability to tax is not unlimited, there are practical limits beyond which the capital that could be invested either stays in the bank or brokerage or it gets invested in some other taxing jurisdiction that is friendlier or a lot of time gets spent figuring out how to shelter the income. There is a principle among investors with enough money to throw around: capital often goes where it is treated best and a smart government would do well to keep this in mind when formulating a tax policy. When tax shelters are popular, that’s a sure sign that the government doesn’t have its act together on taxes.
 
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Zzyzx_Road said:
Problem with higher taxes on the wealthy as that their return on risk can get lowered to the point where they don’t believe the investment is worth the risk. And then where are the jobs that would have been created? In other words, a government can only go so far with taxing the wealthy, above a certain point, the government is guaranteed to get diminishing returns because more investments won’t get made in the first place. Ok by the wealthy, they can still live on their capital, not so okay for the worker who doesn’t have much beyond his labor.
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Commercial appraisers deal with this all the time in the case of commercial real estate. They try to formulate an “overall rate” which is the rate of return on investment that will pay all costs (PITIM) and also provide a return they feel justifies the risk to their capital. I haven’t talked to a commercial appraiser in some time, but the last I knew it was around 12% return on their own capital PLUS PITIM.

Years ago, I did commercial appraising, and developing capitalization rates and overall rates. It was a lot of fun. If you do enough interviewing you really can find out what people require by way of return from different investments.
 
video.foxbusiness.com

Truck driver shortage is really about retention issues: Todd Spencer | Fox Business Video

Truck driver shortage
video.foxbusiness.com video.foxbusiness.com

Truck driver shortage is really about retention issues: Todd Spencer

Charles Payne:

That said, the ADP report came in slightly less than expected, although the prior month of May was revised higher. For me, the most important part of the report is what’s happening in goods-producing jobs - or as I call them, “dirty fingernail jobs.”

Mining +5,000
Construction +13,000
Manufacturing +12,000

In the 18-months that President Trump has been in office, goods-producing jobs have come in at an average of 40,700 (18 months ago, the average was 10,700).

Rev up that Diesel

Truck driver jobs are in an extremely short supply and will probably become more acute. The record pace of Class 8 truck orders continues with June orders surging to 42,200, according to the Americas Commercial Transportation Research (ACT). To put this in perspective, the industry saw 18,700 orders in July 2017. It was the first year-over-year increase in orders since November 2015.

Keep in mind, truck demand and traffic for the U.S. economy is what blood pressure is for a lot of people. However, every doctor appointment, even emergencies, begins with a check of your pulse.

Trucking is a great proxy for the economy so consider these comments and observations:

Best Market Ever

“This is the tightest capacity crunch ever. Long-time veterans in this industry are saying this is the best freight market they have ever seen. Fleets cannot add capacity fast enough and as long as the economy and manufacturing are going great, this capacity crisis will continue.”

“There is a shortage of truck parts and components, so OEMs have been slow to deliver. This just exacerbates an already bad situation. Fleets are now grabbing every available build slot, hoping to get some more trucks by the end of the year. Some orders now are even spilling into the first quarter of next year. It is a red-hot market.”
  • Don Ake, vice president, Freight Transportation Research (FTR)
 
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MonteRCMS said:
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stinkcat_14:
The incidence of the burden of a tax is not guaranteed to fall completely on the consumer. If it did, then nobody would care if marginal tax rates were 90%.
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I must say … you have changed a lot!
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When did I say the burden of a tax always falls upon the consumer?
 
Some people now have alternatives to taking highly stressful jobs … and are exercising them.

So the trucking industry now has to pay more to hire new drivers and retain existing drivers. They’re suffering now because they insisted on underpaying drivers for years. That worked well enough when most drivers didn’t have alternatives outside of Walmart or Home Depot.
 
Zzyzx_Road said:
So the ability to tax is not unlimited
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I agree, but what is the turning point?
To say thay there is one is trivial. What is the optimal tax rate, and how do you determine it.
 
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There are other education initiatives besides the GI Bill, and I was basically lumping them all together. Servicemembers often use Tuition Assistance to take individual courses while serving in order to work towards bachelors and or masters degrees while serving. The military absolutely wants educated servicemembers and they support that while they are still in service. They also allow for servicemen to take a break from service to pursue a degree, then resume service if they test into that program. And yes they often use the GI Bill to continue their education afterwards as well. The military is currently very supportive of education both in and out if service and this benefits both the military and the civilian side.
 
lmachine said:
As much as he wants, business expenses are generally tax deductible if you weren’t aware.
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Add some accounting courses to that economics class you need to take.

Investing in a business is a capital expense, very different than operating expenses.
 
It really is hilarious to see the left going on about how terrible it is that employers might have to pay a decent wage.
 
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