Maybe I'm simpleminded but it seems to me that during the years when we had significantly higher taxes, lower ratio of CEO-average worker pay, a large manufacturing base, and strong unions, that there were more good jobs and less unemployment.
Hedrick Smith writes in his book
Who Stole the American Dream about the mantra that we hear that higher wages destroy competitiveness and yet, he writes of how German companies have raised their wages 5x faster than the US and while the US accrued a trade deficit of $2trillion from 2000-2010, the Germans accrued in the same time period more than $2trillion in trade surpluses. While the US has offshored, leaving a mere 9% of it's workforce in manufacturing, Germany has maintained 21% of their workforce in manufacturing.
Smith also talks in his book about what economists call "the virtuous circle of growth" a dynamic which drove the period of prosperity from 1945- mid 1970 in which "CEOs in that era believed that it was their job to promote and sustain the interests and economic well-being of all the stakeholders in the company, all the groups with a stake in the company's success: owners, managers, employees, suppliers, creditors, customers and communities around the company's plants. Those old CEOs operated from a philosophy of shared prosperity and the country as a whole benefited. Employees got paid well, they and their families went out and spent their pay. That created strong consumer demand, which caused companies to expand their production. They built new plants. They bought new equipment. They hired more workers and that generated a new circle of growth."
So, it seems that stakeholder capitalism has given way to crony capitalism. The profit sharing of the model that was central to the "virtuous circle of growth" has been bastardized, villianized and correlated with "wealth redistribution".
Below is a graph correlating union membership and middle class incomes. I don't see how ridding the nation of unions has benefitted the middle class. If offshoring is beneficial I'm not seeing it.
BTW, I find it interesting to compare the Republican party platform of 1956 to the Republican party platforms of 2000, 2004,2008 and 2012. Not the same party....not even close.
Maybe I'm simpleminded but it seems to me that during the years when we had significantly higher taxes, lower ratio of CEO-average worker pay, a large manufacturing base, and strong unions, that there were more good jobs and less unemployment.
Say the 60s for example?
Govt spending has increased forty times since 1960...people and corps were not actually paying the taxes that are floating around on the internet.
Revenues come from taxes fines fees and tariffs...all of which the consumer paid for in the beginning.
We musnt just look at raw numbers via tax percentage but rather what is actually collected due to all the loop holes and codes.
There must have been alot of holes and loop holes in the past as revenues do not compare to that as of today.
But lets go with a 94 percent tax for a moment{that is getting posted around}...and lets apply it to say those making over 200K a year.
Lets take the president for instance pay him 5 million a year ...but he only gets a little over 6 percent..he hasnt even got a million dollars after taxes.
When we apply the same to innovation the same happens ...what would be the purpose of say Microsoft ever going big as they did?
Ford?
Drug companies?
Colleges?
As there is no actual reward.
Also we must consider...people will want money..at a 94 percent tax we really need to rake in the profits to say buy that mansion...they will raise prices..the consumers pay for it via the price of the good or service.
If someone wanted 5 million dollars but were taxed an actual 94 percent he would need to earn about 80 million dollars.
Prices go up.
And also going back to unions....unions break companies through labor and pensions costs.
If unions equate to middle class...and we all have unions..that is the new lower class...as prices will go up relativity.
We offshore due to the reduced cost.
Corporate tax
Payroll tax
Labor wages.
Property tax.
Materials...of which are higher..if bought from those that also have the huge tax burdens
The govt obtains almost as much from payroll tax as income tax....the company pays the payroll tax.
The reason labor is lower across the ocean is burden.
Ok lets funnel money for a minute from those doing well to those that are not.
No taxes for the lower class...and hammer the rest.
40 percent corp tax
94 percent tax for the rich.
Prices go up ....but also compound as the materials electric etc will also went up.
Wages have to go up to match how everything has went up...since wages went up...now the prices go up again.
Just imagine the reverse of such...a lower tax nation...labor is very cheap as a result.
The same purchase power within its own host.....but imbalanced outside its host
Those taxes reflect the price of the product.
Our govt spends 20k a year per citizen...every purchase you make towards a product or service goes towards such.
Whether paying a tax...hidden tariffs or hidden fees..its the consumer that pays it...without the consumer it cant get paid.
When you purchase a product or service you are paying for the sum of all costs handed down to you.
The result roughly twice the price.
At the end of the year the rich really weren't screwed,,,it all come from the customer to begin with
Also we are now a global economy after the major wars have ended...trading among nations...Japanese cars are now common,
We get alot of stuff from china in the way of house goods.
Lots of importing and exporting...you purchase from the least expensive place...which is often times china..
To compete properly...we have to be competitive ..if not..exports are down and imports are up...not good.
We need to deflate our dollar so off shoring will be less attractive.
