this post was submitted on 15 Apr 2025
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You know, if you raise the corporate tax rate, there's actually an incentive to pay people more because that is effectively a cost of doing business... Food for thought.
That's a fallacy similar to people who don't understand tax brackets and marginal rates vs effective rates and thinking that sometimes a raise can mean you lose more to taxes than if you didn't get the raise.
IMO if we want legislation to increase average pay, the way to do it is to tie it to other pays, like capping top pay or dividends/profit based on employee pay in some way.
I certainly won't say I'm an expert on the topic.
I also think legislation is a long road that could leave different loop holes. I'd be interested in others thoughts on a variety of approaches here, maybe some form of credit based on percentage of employee compensation related to performance. Obviously there would need to be an incentive to pay employees more and attach it to executive incentives.
Cap CEO compensation to a percentage of the median employee salary. (obviously a bit of legalese is needed to define this exactly so there is no loophole)
Never work. There are too many ways around "compensation".
For example, the company purchases a piece of art from the CEO's wife, to display in their lobby. That wouldn't be considered compensation for his "services" as CEO.
No, the tax structure is a better option. Close the ability for them to invest their excess income in financial assets. Allow them to reduce their taxable income through deductible expenses for tangible goods and services. Crawl up their asses when they try to justify objects with intangible value like artwork, but look the other way when the purchase is of a product or service produced by workers.
I'd impose a securities tax as well: tax a percentage of all registered securities, payable in shares of the security. Transfer the shares to an IRS liquidator, who sells them off slowly over time. Limit the liquidator to a maximum of 1% of total traded volume to minimize the effect on the market price. Exempt the first $10 million held by natural persons from the tax. Suddenly, nobody wants to hold more than $10 million in shares.
If the corpo is taxed more on income, it lowers the profit margin, which probably would make them not especially keen on reducing it even further by paying more to their emloyees.
Noone is going to decrease their profits to pay less taxes. You only pay a fraction anyway, how would that even work?
"Income" is what's left after they pay their expenses, including labor costs. Worker's pay doesn't come out of their profits.
They will increase their deductible expenses. Ideally, they'd increase worker wages, but they'll probably do something corrupt. It's fairly easy to say that the company needs a car to get to and from meetings, so they use their business revenue to buy a $200,000 car that they use "for business". On the books, that's $200,000 less profit, but they get a $200,000 asset. But, even the corrupt act of buying a car (or a yacht, a private jet, a submarine) pays the wages of workers who built the vehicle.
They don't really want a depreciable asset like a car. They'd rather buy a thousand shares of AAPL, or 8000 shares of GME, which wouldn't go toward paying a worker. Except that it's a lot harder to argue that these shares are necessary for their business. They can't really justify financial instruments; they're limited to tangible goods and services that could be used in commerce, which means they are paying the workers who produce those goods and services.
So they stick with claiming luxury goods as necessary for their business, and we let them think they are getting away with something.
It becomes a balance of "were losing it anyway, might as well use it to attach/keep good employees.
Instead of giving it away to Uncle Sam
This was literally the case when smart phones first came out.
Companies would buy their workers a phone and pay for the plan and write it off.
The second the irs tightened the rules, companies yanked benefit.
But they are not losing it anyway, since only a percentage of profits is taxed. They will still make more money if they pay less, just not as much as they would with lower taxes.
Only if they can get in a lower tax braket, but even then, there are other, better ways to do it.
If they need to be more competitive in terms of attracting labour, they will be more able to do this with lower taxes, because they would have a larger profit margin.
Low taxes always once tivizes taking profits. Higher taxes Incentivizes reinvestment. This is not a new understanding. Stop pushing the often debunked reaganonmic bullshit. It was never true, it never made any fucking sense. Just stop
God, I can respect your socialist views, but you don't have to agree with everything that supports the things you like.
Thinking that if your company start making less money you will pay more to your workers is just delusional, there is no way around it. This is not Reagonomics, this is just reason.
If you claim it is debunked, provide a source for your claim.
I am not even saying we should lower taxes, just refuting your obviously false point that wages will be higher. It is baffling how uncritical you are of what you are saying.
Companies will always try to pay as little as they reasonably can. But sure, live in your fairy tale world where you can just make up reasons why your political views are great.
How many companies do you run?
I'm guessing zero because you have no idea how companies work their financials.
Even a small business should be structured to minimize taxes in ever possible way.
Companies are structured to minimize liabilities of which taxes is one of many.
It's the very reason companies hate unions, the contract is a series of liabilities.
It's the very reason companies dumped penions, liabilities.
As soon the tax liability became a non-concern, they went after the now higher liabilities. Thoses things were payroll and benefits. Outsourcing and off shoring.
They would rather set it on fire than pay people more. They want to keep everyone just barely below water. Almost no corporations are looking to hire good employees, they're looking to hire desperate people.
No
Why would they set it on fire? "They" are not sadists, they act out of self interest and this would not be beneficial to them in any way.
It is beneficial to them to keep workers poor, desperate, and with few options.
Because something might benefit the bourgeoisie as a class(God, forgive me for using Marxist concept of class), does not mean it makes sense to do individually, which is what we were talking about.
But I would say this is exactly backwards: individually, it always makes sense to pay less if you can, but not in terms of the whole economy.
Even if you think in terms of macroeconomics, no, poverty is not beneficial. Any economy needs a strong market to sell goods to. Unless the country is exporting somewhere else, high amounts of disposable income is needed in the population for a thriving economy. Paying workers less does not necessarily result in worse outcomes for businesses, especially in the long run, since the economy might suffer.
So you could say that the statement "the bourgeoisie as a class benefits from poverty" is incorrect.
They are very much sadists, they can spend money on anything except increasing wages