Taxes

Greedy Capitalist Refuses to Create Jobs

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FlintSTONE! You're fired!

As the lazy, hazy Summer of Recovery melts into a sere and yellow Fall of Employment, you may be wondering: How is it that one of the costliest economic interventions in history failed to make any serious dent in unemployment?

While the dynamics of federal stimulus spending in job non-creation have been widely examined, some are still puzzled by the "failure" of the private sector to create jobs. Free marketers like to point to the punishing restrictions on hiring private employers face and to the uncertainty of businesses that are holding off expansions because they're worried about changes in government policy. I suspect the second claim is interesting but slightly inflated—the signals you respond to in business tend to be more immediate than speculative. But for a powerful demonstration of the first claim, check out the hiring woes of plutocrat Michael P. Fleischer, heartless controller of the means of production at Ramsey, N.J.'s Bogen Communications Inc.

Fleischer gives the case of the median-pay employee at his company. She makes $59,000 a year:

Before that money hits her bank, it is reduced by the $2,376 she pays as her share of the medical and dental insurance that my company provides. And then the government takes its due. She pays $126 for state unemployment insurance, $149 for disability insurance and $856 for Medicare. That's the small stuff. New Jersey takes $1,893 in income taxes. The federal government gets $3,661 for Social Security and another $6,250 for income tax withholding. The roughly $13,000 taken from her by various government entities means that some 22% of her gross pay goes to Washington or Trenton. She's lucky she doesn't live in New York City, where the toll would be even higher.

Employing Sally costs plenty too. My company has to write checks for $74,000 so Sally can receive her nominal $59,000 in base pay. Health insurance is a big, added cost: While Sally pays nearly $2,400 for coverage, my company pays the rest—$9,561 for employee/spouse medical and dental. We also provide company-paid life and other insurance premiums amounting to $153. Altogether, company-paid benefits add $9,714 to the cost of employing Sally.

Then the federal and state governments want a little something extra. They take $56 for federal unemployment coverage, $149 for disability insurance, $300 for workers' comp and $505 for state unemployment insurance. Finally, the feds make me pay $856 for Sally's Medicare and $3,661 for her Social Security.

When you add it all up, it costs $74,000 to put $44,000 in Sally's pocket and to give her $12,000 in benefits. Bottom line: Governments impose a 33% surtax on Sally's job each year.

 Much more from Mr. Selfish Warbucks here.

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  1. Apparently Fleischer believes Sally would work for the same pay if all her benefits disappeared, and wouldn’t demand an equivalent raise.

    1. I don’t think Fleischer is making that argument. However, the left has whined about stagnant wages while helping to create a situation where over 40 cents of every dollar it costs to employ someone at a middle class income is never actually seen by the worker.

      1. I only read ChonyMNGEpi’s comment and the first sentence of yours. I agree with you, if you are saying the employee would rather have their ‘benefits’ and excessive taxes as income.

        1. ChonyMNGEpi

          The only thing those four people have in mind is that they don’t like you.

          1. I think you mean common, but common with them goes farther than what you have in mind.

            1. Why the hatred of Epi, Suki? I know you guys disagree on a few wedge issues, but surely he’s no Chony/MNG.

      2. I believe he is. For some reason, he is not counting Sally’s SS, Medicare, UI, disability and workman’s comp as “benefits”, even though they damned well are. Nor is he counting the fact that her taxes are what funds the very civil society which makes the job possible.

        For the $74000 Sally earns, she gets $44000 in her pocket, AND health care AND all the insurance I listed above AND social security AND medicare AND general government. Not a bad deal in my opinion.

        1. You gotta quit arguing in bad faith. If she’s getting workman’s comp, disability, and UI, then she’s not getting 44,000 in her pocket. and you know that. She’s also never getting any social security unless she’s about to retire. They spend that money just like any other tax. and you know that too.

          1. Plus if she’s near retirement, she’s already almost certainly paid way more than she could ever collect in workman’s comp, UI and disability. If it’s insurance, what’s it worth? The rest of her insurance (that can be quantified) is listed in benefits. You want him to list something you can’t calculate?

            1. Reading above, I mangled that first part. I’d say I’ll come back later and fix it, but I’m gonna be waaay to hung-over. I think the rest makes sense, but that may be the wiskey talking. ahh, fuckitall. just ignore it. my apologies.

        2. He is not, he is arguing that he could pay Sally $74,000 and she could spend the $15,000 a year to her benefit. Perhaps buying insurance in a much less regulated market. Putting larger contributions towards a savings plan in lieu of Social Security.

          The list goes on.

          For the $74000 Sally earns, she gets $44000 in her pocket, AND health care AND all the insurance I listed above AND social security AND medicare AND general government. Not a bad deal in my opinion.

          Imagine what Sally could get with $74,000 to spend as she saw fit. Imagine……………….

          1. Booze and hookers?

          2. Especially since Social Security and Medicare are going tits-up soon and
            Sally’s about as likely to see any “benefit” from them as Lindsay Lohan is to come up clean at her next court-ordered clinic visit.

        3. I think Fleischer’s major point is that it costs an employer 1.68 times to fund a position than the employee gets to take home in disposable income. Meaning the employee has to generate considerably more value to his employer than what the simple wage and salary level would indicate to justify holding on to someone much less hiring new people. When employers are seeing large potential new costs for taxes and health care mandates without much gain in new sales revenue, it easy to see why they’s be reluctant to hire new people.

          It’s not really about taxes or whether Sally wants to see all her take home pay, it’s about the true cost of employment.

          But, really, you think 40% taken off the top is a good deal? Are you nuts?

          1. I think Fleischer’s major point is that it costs an employer 1.68 times to fund a position than the employee gets to take home in disposable income. Meaning the employee has to generate considerably more value to his employer than what the simple wage and salary level would indicate to justify holding on to someone much less hiring new people. When employers are seeing large potential new costs for taxes and health care mandates without much gain in new sales revenue, it easy to see why they’s be reluctant to hire new people.

            This.

            Not to mention the abso-fucking-lutely nutso amount of paperwork and regulations and restrictions and hassle of hiring people that otherwise goes along with the monetary costs.

            I deal with this all the time in my own business and quite often, where we have too much work for ourselves, it’s still not worth hiring someone and incurring all of the stupid expensive BS that comes along with that decision.

            Thing is, most Americans, and the government they vote for, seem to see employers as nothing more than benevolent money machines who make a deposit into their bank account every two weeks. The workers don’t know (or care) about the burden that’s placed on the employer and big government doesn’t care because there’s more potential voters than there are employers.

            As far as I am concerned, the stagnant jobs situation in the U.S. is a good thing right now because now maybe we might see some people – voters and legislators alike – wise up to the mess that they’ve created. Kind of a mini Atlas Shrugs, if you ask me.

            1. This is why it makes sense to work for yourself if at all possible.

            2. “The workers don’t know (or care) about the burden that’s placed on the employer . . .” -West Texas Boy

              I want to know more about the conspiracy of silence among employers that keeps awareness of that burden from employees, WTB. Why aren’t those costs of employment printed on your workers’ pay stubs?

              If your current payroll processing firm can’t do that, tell ’em you’re now in the market for one who can. (I am available to assist you at my usual hourly consulting rates.)

        4. How much can I sell my share of general government for on ebay?

          1. Tree-Fitty.

            1. Gawdammit, loch ness monster! In this family we earn our money!

        5. Oh boy, she gets pointless wars for her $6250 in federal withholding? Leapin’ lollipops and unicorn farts! I love America!

          1. Those “pointless” wars are helping to insure that she can continue to go to work in the morning … and leave work through the front door instead of from a 90th-floor window.

            We had a few people do that a while back, because some other yahoos in the 1990’s thought it was “pointless” to decisively defeat al Quada.

            Those wars were/are anything but “pointless” … and they ARE within the purview of our rights-respecting government to prosecute, in order to secure our life/liberty/pursuit of happiness … one of the FEW things that are within its purview.

            1. The motives of the 9/11 hijackers were:

              Sanctions imposed against Iraq

              Presence of U. S. military in Saudi Arabia

              Support of Israel by United States

              Provoke war with the United States

              So you’re saying that the wars are preventing terrorist attacks? It sure as hell seems like they are provoking them.

              And of course invading Iraq was all about attacking Al Qeada. Uh huh.

        6. You have civil society exactly backwards. Look up the word. It is all those benefits of society NOT funded by taxes or other forms of nonvoluntary participation.

        7. For the $74000 Sally earns, she gets $44000 in her pocket, AND health care AND all the insurance I listed above AND social security AND medicare AND general government.

          Ok, so she gets cash & health care.

          So-So Security is broke, and going in the red faster; so it’ll be means tested, cut, or ended by the time Sally retires; unless she’s 55+ already.

          Medicare? see So-So security.

          “the very civil society which makes the job possible” … except given the costs of this society, a lot of jobs like these aren’t possible.

          Given the choice of increased government spending and control, or increased jobs; you’d choose government spending and control… which is your prerogative; but don’t expect everyone to agree.

          Now you could pretend that government costs don’t depress the economy, the red ink and increased costs for these programs won’t bury them, and everything is perfectly fine. But dreaming in pretend-land isn’t good economic planning.

    2. Maybe you missed the tally of all the taxes?

      I bet she’d work for the same *take-home* pay no matter what the taxes were. Which is the point of TFA: the *employer’s* costs: the huge, non-negotiable costs *to the employer* of hiring that person *at that pay*

      1. “I bet she’d work for the same *take-home* pay”

        should be “I bet she’d work for the same *take-home, after tax* pay”

        1. It’s the same thing for most people these days.

    3. Okay, Chad… let’s just pay everyone a hundred grand a year, flat-rate, for every job.

      That includes the president, whomever it may be in the future… AND now.

      Would THAT make you happy?

      I seriously doubt it would, but it’s fun to ask.

      1. Of course it won’t make him happy. In his mind (and those like him, which includes most politicians), the reason that withholdings occur in the first place is because most people are too stupid to take care of themselves. So why pay them more overall if they can’t be trusted to save it for themselves or spend it on the important things?

      2. No, no, no. You’ve got it all wrong. You shouldn’t actually pay people ANYTHING. They should all work for the common good and the government should provide them with all their needs. Sure, some of the top leaders have more “needs” than the masses but that’s only because the masses are stupid and the overlords aren’t.

        Now do you understand?

        1. NOW you’re on the right track!

    4. Seems like the only money Sally (or her employer) pays for which Sally receives no direct benefit is the $1893 in state income tax and $6250 in federal withholding.

      1. Seems like the only money Sally (or her employer) pays for which Sally receives no direct benefit is the $1893 in state income tax and $6250 in federal withholding.

        If you consider an IOU on Medicare and Social Security witholdings that at best will pay out a fraction of what they would have had she been allowed to purchase all of the associated insurance and investments on the open market then yes, she “benefits”. If you consider being forced to participate then yes, she “benefits”.

    5. Well, I call you on your bullshit sir as I was actually arguing with my collegues today that I would rather keep the money they take away from my pay to put in the company’s pension plan and invest it by myself, even though that would mean I’d lose a 1.5 times payment from my employeer.

      If Sally knew how to count, she probably would feel the same way too.

      But then again, I guess you never did a net present value calculation in your lifetime and have no idea what that is so I can’t really blame you for only going with your guts feelings.

      1. D-

        You seem unaware that the reason your employer matches your investment because of the cost of TAXES. Which was the point of the article, idiot.

        In your case, it seems likely that you are too ignorant to even hold a job, much less invest your own money.

        1. Maybe following threaded comment is above your intellectual capacities, as my comment was meant as a reply to Chad, saying that Sally would ask for a raise if she lost her benefits paid by her employer. I wouldn’t mind losing mines and not get a raise if that meant I could keep my share of the contribution to a benefits system I won’t benefit much from anyway.

          And if you spent less time being a dick over the internet and more time actually learning the damn things, you’d know that when the bank I work for as a financial advisor does a contribution for me to my pension plan, it is tax deductible for them, at least in Canada where I live anyway. Therefore, my example had nothing to do with TAXES, but was just to make the point that people wouldn’t necessary ask for a raise if they lost their benefits.

    6. Apparently Fleischer believes Sally would work for the same pay if all her benefits disappeared, and wouldn’t demand an equivalent raise.

      I don’t know about her, but I’d settle for maybe even as low as 25% of an equivalent raise. Go up to 40% of an equivalent raise and it would be a lock.

    7. As usual your lack of economic sophistication and your utter lack of business experience causes you to miss the point. This isn’t about the benefit to Sally, its about the true cost of Sally to her employer and more importantly, the true cost of hiring a new employee.

      For employers, labor is a cost just like facilities or raw materials. When the cost of labor goes up, demand for labor goes down just as it does with any other good or service.

      Everybody recognizes this unshakable economic truth. However, very few people who don’t make a payroll understand that taxes and mandates are one third or more (he neglected the cost of employee related liability, HR person hours, mandated vacations and leaves etc.) Having the government mandating a big chunk of the cost of employees means that changes in employment regulation can significantly increase the cost of hiring a new employee.

      When the cost go up, employers “buy” less labor. When you’re in a bad economy and businesses start playing it safe instead of taking risk to expand, increasing the cost of labor seriously impedes the willingness of businesses to take the risk of hiring a new person.

      It’s just that simple. It’s supply and demand. Cost go up, demand goes down. In the past 18 months the Democrats have increased the cost of labor to pay for benefits that will not materialize for a decade or more down the line. Providing Sally with a lavish retirement 30 years from now will not make it cheaper to assume the risk of hiring another Sally today.

      1. In the case of the new health care regulations, no one knows what the true effects and costs will be come January. It will take many years before they are known in full but at least after the first of the year a few things will be clarified.

        I don’t agree that uncertainty in being over-weighted. I think that employers are only making hires they absolutely need and are waiting on some until they know more about the true costs.

      2. Pretending to provide Sally with a lavish retirement, for which not a penny will be actually saved or invested, will not make it cheaper to assume the risk of hiring another Sally today.

        This is closer to the truth and even worse.

      3. Thank you Shannon for bringing the comments back to the actual topic of the article. The title of Fleischer’s article is “Why I am not hiring”. the topic is not “How to fund retirement” or “What I get for taxes”. Fleischer tells us it costs him about $74K to put $44K in an employees pocket. Between that cost and the unknown future cost, Fleischer cannot justify cost when measured against the value to his business. Unless Chad or someone else can explain to Fleischer why it is worth the $74K investment each year, he will continue not to hire anyone.

        If the government wants more employment, they need to reduce the cost of hiring or increase the benefit of hiring.

      4. Not to the idiot marxist Left headed by the bozo, Barry Obama.

        The purpose of this business is to provide a job to the employee, end of story. This is so the employee in Obama world will vote to keep Obama in power and get him all the perks and goodies.

        There is nothing as stupid as a leftist marxist and Obama is a deep red one. Has been his entire life.

    8. Re: Chad,

      Apparently Fleischer believes Sally would work for the same pay if all her benefits disappeared, and wouldn’t demand an equivalent raise.

      Perhaps. Or someone else will, and it’s bye-bye Sally.

      See, Chad, Sally is not entitled to her job. NOBODY is. Not even YOU.

  2. On the plus side, she gets a stake in an automaker for that Rolling Rockesque percentage.

  3. Plus, thanks to the perpetual circle-jerk of trial lawyers and the Democratic Party, every new hire signifies exposure to potentially ruinous litigation for any of a host of bogus reasons.

    It doesn’t seem to have dawned on the cognitive elite that all of the worker “protections” they’ve legislated into existence have priced American labor out of the market.

    1. And then there’s this:

      http://www.boston.com/business…..s_illegal/

      1. Welfare fraud = theft.

        Imagine that, an employer doesn’t want to hire a convicted thief. How unfair and narrowminded, not to mention racist.

        1. A blanket refusal to hire workers based on criminal records or credit problems can be illegal if it has a disparate impact on racial minorities, according to the Equal Employment Opportunity Commission.

          Felony is a civil right, goddammit!!

    2. It doesn’t seem to have dawned on the cognitive elite that all of the worker “protections” they’ve legislated into existence have priced American labor out of the market.

      +1000

  4. Oh my God!

    You’re not suggesting that the tax burden associated with hiring someone might have an impact on the willingness of entrepreneurs to hire, are you?!

    You crazy bastard!

    If ever we needed deep, deep cuts in marginal tax rates, we need them right freakin’ now.

    “…the signals you respond to in business tend to be more immediate than speculative.”

    Don’t get too married to that idea…

    The short version? Because we need to respond immediately, we tend to plug variables with the worst case scenario.

    If I don’t know what the price of something is going to be 18 months from now, and I need to tell my investors what number I’m going to hit after we sell 24 months from now? I put in the worst reasonable number, and run with that…

    If I can’t make the numbers work in the worst case scenario? I don’t bother pitching the deal… The project doesn’t happen; people aren’t hired…

    Uncertainty about the future has a very real effect on what’s happening right now from a project standpoint. And that rings truer with cost projection more than anything else.

    1. Yup, cut the rates. Or just eliminate everything the federal government does that isn’t authorized by the Constitution. That would free up billions & we could scrap the income tax altogether. Not replace it with a fair tax. Scrap it all!

      1. Extortion means never having to justify yourself.

    2. You’re not suggesting that the tax burden associated with hiring someone might have an impact on the willingness of entrepreneurs to hire, are you?!

      There’s no tax burden on the employer, it’s all on the employee. The pay stub simply hides this fact.

      If I can get $20/hr in production out of a worker, then there is some point between $0 and $20 per hour I will see it being worth paying them to do that job. If the government taxes 90% of it, then it’s up to that worker whether he will work for $0-$2 or not.

      1. “My company has to write checks for $74,000 so Sally can receive her nominal $59,000 in base pay.”

        I don’t want to talk down to you, but I don’t know how to get this across without sounding like I’m talking to a five year old…

        It costs $74,000 per Sally to pay Sally $59,000 in base pay. Sally’s take home pay is even less!

        If it only cost $62,000 per Sally? Then he could afford to hire more Sallies!

        Really. It’s as easy to understand as that. Taxing Sally less makes paying Sally cost less too!

        No. Really.

        1. In other words, you as the business wind up eating the cost because it comes at the expense of the value of Ms. Sally’s utility, so it isn’t just her problem.

          1. “In other words, you as the business wind up eating the cost because it comes at the expense of the value of Ms. Sally’s utility, so it isn’t just her problem.”

            Yes, as an employer–you cover all costs. All of them. It starts with Cash Flow. And you start subtracting expenses. Sally is an expense. If you’re going to expand, you may need to hire more Sallies, and if your Cash Flow (projected or otherwise), won’t cover the costs of hiring more Sallies, then you can’t hire them. You can’t expand.

            They don’t teach you this in Econ 101. This is what you learn running a restaurant or being a drywall contractor. Maybe in Accounting.

            If the price of drywall goes down, you can afford to do more jobs. If the price of employing people goes down, you can afford to employ more people. Our government has the discretion to cut the cost of hiring Sallies! They’ve just decided not to.

            Sally probably has no idea it costs her employer $74,000 to pay her $59,000 (before she even pays taxes). And being employed, even if she knew, it probably wouldn’t bother her as much…

            …as much as it should bother all the other unemployed Sallies out there, who can’t get a job right now and don’t know why!

            They’re the ones who are suffering the most!

            In the meantime, when you look at things like the price of treasuries, you can see what entrepreneurs are doing with their money rather than hiring Sallies. There’s no question that inflation is low, which is a little odd considering that there’s no shortage of debt being issued by the US government. To the contrary, they’re running big deficits. But if you look at the yield curve, entrepreneurs are voting with their dollars, and they’d much rather buy treasuries paying an average of around 1.5% for a five year treasury–rather than expand and hire unemployed Sallies! (…or invest in companies that hire unemployed Sallies)

            We need those unemployed Sallies out doing productive work and buying things to make the economy grow again–but that won’t happen any sooner because we decided to keep the cost of hiring Sallies (and profiting from their work) high.

            To the contrary…

        2. The reality is that taxes are NOT going away. And, they are the burden of the employee. So, the scenario you put out there Ken will probably never exists.

          No. Really.

          1. Just to make my position on this clear, I’m not for high taxes either. However, taxes go up, employers can hire outside US for less, and the worker-bee is left to take pay cuts (unless u work for da gob-ment) as a result of the rising taxes and the lower wages.

          2. I’m sorry, did I call for taxes to go away completely?!

            Did I say that out loud?

            For what it’s worth, taxing (actively discouraging) something as productive as working and holding people on your payroll? That’s a stupid thing to do.

            Taxing people’s income is the very last thing we should be taxing…

            In the meantime, all I called for was deep cuts in marginal income tax rates!

            Just like Ronald Reagan did. I saw it happen in my lifetime–don’t tell me it will never happen. Things have been worse than this before, and the people running things right now may be unbelievably stupid, but sooner or later somebody’s gonna figure out that cutting the costs of hiring people and keeping them on the payroll–just might make them more attractive to add onto and keep on the payroll!

            All I’m askin’ for is deep, deep freaking cuts in marginal income tax rates. And there’s nothin’ unreasonable about that.

            Actually, the fact that anybody over the age of ten needs these concepts explained to them is absurd.

            Can’t seem to get the unemployment rate down?! Well maybe the stupid asshole that runs this country might consider championing a drive to cut the cost of employing people…

            …not to prove any theory I hold dear is true–just to prove that he’s not really the stupidest human being on the planet. When the cost of employing people comes down, it makes them more employable!

            …every Chinese communist knows that. Every illegal alien knows that. Why does President Obama treat that like a theory?!

            …and arguing with his followers is like arguing with a creationist! It’s like talking to a Moonie. How do you deprogram one of those jokers?

            1. God bless you.

            2. Yeah, but instead of cutting rates, they want to raise the marginal rate. As a result I will probably fire an employee I don’t really need (but have kept on to allow her to finish some schooling) because I’ll need what was her salary to pay the increased taxes on my own income.

              The Democrats will never understand that taking money from employers means the employers can’t employ as many people. The Democrats honestly seem to think we have unlimited pots of “unused” money that the government can tap without affecting anybody else.

        3. If it only cost $62k per Sally then Sally’s going to want to get paid more than $59k/yr.

          1. There’s some more flexibility there, no question.

            Although, my bias would be that if she’s happy with the take home pay she’s makin’ now, after taxes, then she’d probably be happy with the same take home pay…without the taxes…

            The point is that, regardless, if the cost of hiring Sally went down, businesses would hire more Sallies.

            Businesses are more eager to expand their payrolls when the costs of employing people is lower–and if our government doesn’t lower the costs of hiring people in response to intractable and high unemployment?

            Then we are being governed by morons.

            P.S. Even if Sally demands more money? Consumers with more discretionary income aren’t exactly something I’d associate with an unhealthy economy. Would you?

            1. “Although, my bias would be that if she’s happy with the take home pay she’s makin’ now, after taxes, then she’d probably be happy with the same take home pay…without the taxes…”

              If she’s shortsighted then yes. So you’re probably right- she’d be happy with the same take-home pay. Until she got sick, old, disabled or unemployed. If she’s not shortsighted then she’ll end up devoting a non-trivial percentage of her take-home pay to planning for these contingencies.

              Here’s the breakdown of the difference between her employer’s $74k and her $44k:

              $8,143 – state + federal income tax
              $12,090 – health, dental, life insurance for sally and/or her family
              $7,322 – social security
              $1,712 – medicare
              $687 – state + federal unemployment insurance
              $298 – disability insurance
              $300 – workers comp

              If you take the employer’s contribution to Sally’s health insurance out of the picture, then that’s cost Sally is going to have to make up on her own, meaning she’ll demand higher pay. This also means that her employer (under the current rules) loses a tax break on the money he spends to offset Sally’s health insurance costs. So that has to be factored in.

              If you wave a magic wand and SS doesn’t exist, and isn’t replaced by some other savings program, then Sally has to save more on her own for retirement (though not as much as she pays now in SS). She may also have to set aside some portion of her income to support her own parents as they age.

              This is especially true if there is also no Medicare (or comparable replacement). Now Sally has to plan, over the course of her working years, for the eventuality of huge medical expenses when she’s older. Only, she can’t possibly prepare adequately for them since the costs can very easily exceed her ability to afford even should she save responsibly. It would be nice if she could enter into some risk-sharing arrangement with other seniors, but…fat chance of her getting insured if she gets a major illness or gets sufficiently old.

              If you take away unemployment insurance then Sally has to maintain a bucket of liquid cash at all times so she can survive a bout of unemployment or temporary disability.

              All this to say…if you yank all these services and insurances Sally’s paying for, then she’s going to have to set aside a lot more money on her own compared to what she saves now. So for her discretionary income to remain constant while she’s socking away all this extra cash, she’ll need to be paid more.

        4. I don’t want to talk down to you, but I don’t know how to get this across without sounding like I’m talking to a five year old…

          It costs $74,000 per Sally to pay Sally $59,000 in base pay. Sally’s take home pay is even less!

          I don’t want to talk down to you, but I don’t know how to get this across without sounding like I’m talking to a five year old… Sally’s pay is $74,000. $59,000 is in cash, of which the government takes some portion.

          1. This is right – the cost to the employer is $74,000. If the government add to the cost by mandating say an increase in health care benefits then the employers costs goes up. Sally does not she any benefit in her pay check and may or may not see any benefit from the increase in health benefits.

            If the increase is enough Sally may get laid off but it will definitely impact hiring more Sallys

            1. Thank you, Rich!

              …for my sanity.

              1. Is there anyone else out there confused about whether cutting the cost of employing unemployed people makes them more employable?

                See Rich.

                1. And just to put a little icing on the cake…?

                  For those of you out there who think President Obama must know something about compassion that isn’t being addressed here…bullshit!

                  It is morally unconscionable that we impose income taxes on working poor people. What tiny amount of taxes the working poor pay into gross revenue, from people who make less than $25,000 or even $35,000 a year in take home pay, is nothing compared to the social costs of those people having relatively few opportunities for jobs right now!

                  Pricing poor working people out of a job just out of love for Barack Obama or hatred for Ronald Reagan (or whatever), it’s morally pathetic. And his good intentions don’t count for squat.

            2. So how do you believe that contradicts my statement?

  5. And the same rationale works in the government sector.

    I was actually watching the local news the other day after the big “save the teachers” bill passed. They interviewed both the San Francisco and Oakland superindendants of schools and BOTH said that they would be wary of hiring back teachers because they don’t know if the money would be there next year. Both said they would cancel days off and raise salaries.

    Saved a bunch of jobs, that did.

    1. I live next to AlanGrayson’s district and somehow I got on his office’s e-mailing list.

      The following is how he justifies himself:

      “Subject: It’s Who We Are
      Date: Aug 11, 2010 10:48 AM
      Dear Friend,

      Times are tough. Maybe you noticed.

      In certain parts of the world, 100 years ago, when times were tough – a drought, a famine – they ate each other. Literally.

      That’s who they were.

      We’re different. When times are tough, we don’t think about ourselves alone. We think about those who need help. The sick. Senior citizens. The disabled. Children. When times are tough, they’re the ones who need help the most.

      That’s why I was so proud yesterday to vote for money for schools and for health care for the poor.

      Why? Because if we voted it down, schools would close. And hospitals would close.

      But we won’t let that happen. When times are tough, we rise to the occasion. We shelter the homeless, we feed the hungry, and we heal the sick. We teach the children. We help those in need.

      We’re Americans. It’s who we are. And I’m proud of it.

      Truth,

      Alan Grayson”

      Not bailing out the states from their own excesses with money the Feds do not have would be the moral equivalent of cannibalism.

      Yeah.

      1. In certain parts of the world, 100 years ago, when times were tough – a drought, a famine – they ate each other. Literally.

        That’s who they were.

        And us? When times are tough we eat future generations who have yet to be born. It’s who we are.

        1. In certain parts of the world, 100 years ago, when times were tough – a drought, a famine – they ate each other. Literally.

          That’s who they were.

          And us? When times are tough we eat future generations who have yet to be born. It’s who we are.

          +1000

      2. Funny, whoever wrote that letter about saving education never learned proper punctuation.

      3. We think about those who need help. The sick. Senior citizens. The disabled. Children.

        I can’t take seriously anything with punctuation errors as egregious as this.

      4. Actually, the public sector voting to give themselves large wages and ridiculous benefits it ALOT like cannibalism!! As is a board giving a CEO a golden parachute and a huge salary.

        But at least in the private sector, if they weren’t bailed out, they would have to pay for it themselves if they make bad decisions.

        1. Exactly my thought. What is taxation for naked redistribution but cannibalism?

          And, Donner party and North Korea aside, who the fuck’s been eating people?

          1. It happened in the Ukraine. Grayson probably doesn’t want to mention why.

            1. He probably doesn’t know why, or that it happened. Most people don’t know.

            2. Utter propaganda. Walter Duranty told me so.

      5. Three words to Mr. Grayson …

        AIN’T. YOUR. JOB.

        Compassion is a job best handled by We the People directly …

        … not by a government who can — regardless of motive — only bring two tools to the jobsite: a bag of money, and a set of handcuffs.

        1. Oh, and Richie, let’s just stomp all over the meme that wanting to handle it directly is “unChristian”. I’ve had a standing $500 offer for any Leftard that can point out the words of Jesus saying that charity via government gunpoint is what He had in mind. No takers. Ever.

  6. Is anyone actuially surprised by this?

    Lou
    http://www.web-privacy.at.tc

    1. Yug Pow! Sounds like a super-hero. Save us O Yug Pow!

      1. For a Shaolin master your kung fu is pretty lousy!

  7. While I’m sympathetic to the idea that govt regulations and hidden taxes make hiring people expensive, Fleischer is putting his hand on the scale here by not taking into account the benefits an employee receives from Social Security, unemployment insurance, Medicare, and (gasp) even income taxes.

    1. “While I’m sympathetic to the idea”

      It’s not just an idea, you know. It’s like, reality.

      “he benefits an employee receives from Social Security,”

      That part’s a joke, right?

      1. Depends whether they’re 64 or 24.

        1. Someone who’s 64 right now might get some money back, you’re correct about that. But it’s still not a benefit if the worker could’ve earned more by investing his own money privately.

      2. If it’s a benefit, why does the Government have to force me under penalty of law to take it?

        Normally, benefits are things I would like to have,

        1. “Take part”, not “take it”, sorry.

          1. Actually, I thought it seemed better the first way.

    2. income taxes provide a benfit? to me?
      besides not getting locked in a cage by an IRS Swat team?

  8. Fleischer’s totals don’t include a couple of government-added costs:

    1. If heartless Simon Legree Fleischer wanted to fire Sally for poor performance or misconduct, she might turn around and sue his company, and her suit would probably be most effective if framed as discrimination. Because nobody can ever be fired in America.

    2. If Sally decides to have a baby, Bogen must give her six weeks of paid maternity leave, by NJ state law. Despite the chance that she’ll quit her job after exhausting her paid maternity leave (~20% of mothers over 25 don’t return to work, and another ~20% work reduced hours if they do return to the same job), Bogen isn’t allowed to hire a replacement for her until she’s actually gone. Bogen’s only allowed to order her baby shower cake, and not give a rip that they’ve got work that needs to be done by somebody. Because the government’s decided that Sally’s personal lifestyle choices are her employer’s responsibility.

    The German government decided in 2007 that women can take up to three years’ maternity leave. And then they were scratching their heads about why companies were finding ways to hire fewer women. Um, duh.

    1. The “unintended” consequences of things like this aren’t even unintended by politicians; they really just don’t give a shit. If they pass laws like this, they get votes from the beneficiaries of the law, and from people who agree with the law and think it’s correct, which are a lot of people. If later less women are hired, no one will blame the politicians, they’ll blame the “heartless” companies.

      In fact, it’s almost stupid for a politician not to push these laws, because they are pure, 100% win for them.

      The real morons are the beneficiaries (new mothers, in this case), who think they’re getting something, but don’t realize that they’re losing something as well for the long term–or at least fucking it up for the childless women who come after them.

      1. Do you know what “unintended” means?

        1. I think he does. Do you know what “they don’t give a shit” means?

        2. I’m sure when RC Dean gets here later in the day, he’ll correct my probable misstatement of the iron law that “unintended” consequences that can be foreseen are not unintended.

  9. Privatize the prisons!…Wait…

    1. Your little prison is private, isn’t it? Or do you now share it with other personalities?

      1. There are many in there…Max…Edward…and more. All clawing at each other in impotent rage, trying to escape their cages, but the cages are made of hate. And gumdrops.

        1. Max gets conjugal visits, though.

          On a related note, I hear his mom is an excellent fellatist.

          1. That’s “fellatrix” to you, young man.

            1. Chauvinist pig.

            2. Les: What’s an “executrix”?
              Herb: Whips, leather, that kind of thing.

    2. Max,

      How would you go about increasing the availability of jobs?

      1. Well, obviously, business owners should be forced to hire people. Duh.

        1. fake maxes are getting better and better. I could almost believe he would say something like that.

          1. That comment passed the Turing test.

            1. I don’t see a problem with Max’s statement.

              1. So did that one.

  10. Off topic:

    Stargazers may want to look outside tonight for a meteor shower:

    http://www.cnn.com/2010/US/08/12/meteor.shower/?hpt=C1

  11. Can’t read the pay article, so I can’t comment on this guy. But if he’s like any of the jerks in this other WSJ article then he can go cry me a river.

    And here’s a a relevant(?) graph from The Economist relating corporate profits to unemployment. It seems like profit margins are just fine, but the recession is a useful bogeyman for further trimming/undermining/temping out workstaff.

    1. Who woulda thought. More workers chasing fewer jobs equals stagnant compensation. Its like this supply-and-demand thing is a natural law of human behavior.

    2. So the firm is supposed to operate at a loss so you can keep your job?

      1. Nah. The government is supposed to subsidize them with tax money so I can keep my job. đŸ˜‰

    3. It seems like profit margins are just fine, but the recession is a useful bogeyman for further trimming/undermining/temping out workstaff.

      I see Anon is unfamiliar with the effects of uncertainty caused by government intervention in the economy on investment (which includes hiring new employees) by private companies.

    4. If profit margins are fine, then why would they have hired them in the first place if they didn’t need them to begin with to produce the same profits? But according to your bogeymen theory, you know exactly the reason.

    5. I think you need to go look up the meaning of the term, “productivity.”

      Margins are fine because they already have plenty of workers who can do the work that generates the margins.

  12. Tim Cavanaugh needs some brain food. He should eat the peanuts out of Paul Krugmam’s shit.

    1. Did you find something at fault with his article? If so, what?

    2. Max|6.24.10 @ 3:29PM|#

      Go suck ron puals dick, morons. You peeple are fucking retarded. I`m done coming to this wingnut sight. this is my last post.

      1. He’s an addict.

    3. Krugman doesn’t shit per se….he publishes!

      1. Mimi and Eunice consider these to be the same thing

        http://ninapaley.com/mimiandeu…..t-poop/395

      2. +1

        I spit up my coffee….

  13. Did anyone else think that this makes an argument for land value taxation? Bogen should pay the same tax based on the value of the land it occupies, without regard to how many workers it employs, or at what wages. Then the firm would not be punished with payroll taxes, etc., for hiring someone or raising her wages.

    1. Ive argued replacing all other taxes with the Georgist Single Tax on here many times.

      1. As wacky as George’s economic ideas are, there are worse ideas than the Single tax.

        For example, what we have now.

      2. George’s “Single Tax” as initially proposed is self defeating. You can’t tax 100% of the value of anything and expect a market to persist. And without a market, you have no way of knowing what 100% of the value actually is.

        So, my only disagreement with George is a matter of percentage. Make the Single Tax 10% of land value, I’m fully supportive.

        Of course that implies eliminating all other income, dividend, capital gain, and consumption taxes. Otherwise it’s not really a “Single Tax”.

    2. since protecting property is a major function of the federal government (national defense); then yes it makes a lot of sense to tax property.

      1. “protecting”! That is funny. It really is just like the mob.

        Hello Sir, nice property you have there. It’d be a shame if something were to happen to your propoerty. Why don’t you just pay us a moderate fee every year and we’ll make sure nothing happens to it.

  14. Greedy Capitalist Refuses to Create Jobs

    The truth is that they do create jobs…in India, Mexico, or anywhere else cheaper than Americans are will to be paid.

    So, who is really greedy? Is it the Boss that wants to pay as little as possible resulting in him going off shore to the infinite abyss of exploitable people who will work for nothing?

    Or, is it the employee?

    1. You’d be taken more seriously if you stopped referring to people in other countries as exploitable. Those people freely choose to work in factories because the jobs are better than subsistence farming. In fact, the percentage of the population living below the poverty line in India and China has been decreasing steadily over the last 35 years, from 55% to 26% and from 64% to 10% respectively, as both countries have industrialized. Why do you think more Indians and Chinese living in poverty is a good thing, Alice? Do you really care about them, or are you only really concerned about the livelihoods of Americans?

      1. Actually, I don’t think it’s possible that Alice Bowie will ever be taken seriously.

    2. Its the employee.

      You see the employees are just voters, and the voters have created a system where employees are too expensive to maintain, due to mandatory minimum wages.

      Get rid of the minimum wage, let Americans negotiate their own pay rates, and this problem goes away.

      1. This isn’t true. First, a negligible percentage of workers are effected by the minmum wage. The tax and administrative burden is a greater issue, but even this doesn’t create most of the problem.

        The difference is the lifestyle expectations and skill sets. Westerners have lived for generations with such comparatively advanced skill sets foreign labor couldn’t compete. Now they can. Like any item suddenly experiencing a 400% increase in supply the price per unit has dropped. And it will take time for the demand of those new labor pools to drive production up enough for American labor to be competitive again.

        So the second mistake is believing that a return to free markets solves this employment issue. It won’t until American employee expectations are in line with their new market circumstances. Removing the government interferences can speed this up, but we’re still looking at decades. The key fact is not that a return to free markets solves this. It is that any attempt to prevent this market change will fail, and the expense of failure will be vast. All we will do in that case is ensure the final crash is harder and more painful than it otherwise would be.

    3. Re: Alice Bowie,

      The truth is that they do create jobs…in India, Mexico, or anywhere else cheaper than Americans are will[ing] to be paid.

      You said it, baby!

      Would you buy from a grocer who’s only willing to sell you tomatoes for $100.00 a pound, or someone who’s willing to sell you the same tomatoes for $3.00 a pound?

      So, who is really greedy?

      Better ask who wants to make the sale and who doesn’t. The greedy ones will be those willing to cater to the customer (be it you, be it an employer); the not-so-greedy ones stay at home… cooking in their own misery.

      Is it the Boss that wants to pay as little as possible resulting in him going off shore to the infinite abyss of exploitable people who will work for nothing?

      God forbid someone looks for a better deal with his or her OWN money!! Better batter down the buildings of Marshalls and Ross, so people only buy at Macy’s and Sears!!

      Fuck you, Alice.

      1. Did that really merit a Fuck You.

        I stating what is happening. Jobs are leaving America because it is cheaper to hire workers elsewhere. And LOWERING TAXES won’t really help.

        And, I don’t think that there is anything anybody can really do about it. Not the government, not the free market.

        If i have a business making CUPS and it is cheaper to have people in Mexico make it, that’s where I’m going to go. I will then sell my CUPS for cheaper. This will force my competition to do pretty much the same. B4 u no it, I’ll be richer and I’m not going to hire MORE PEOPLE HERE, I’ll hire them elsewhere.

        I’m not saying that EVIL GREEDY PEOPLE are destroying America. I’m saying that the natural phenomenon of the FREE MARKET cannot be stopped. And, it may be dire consequences for the little guy here.

        THat’s all. And I don’t think I deserve a FUCK YOU for that.

        1. Re: Alice Bowie,

          I stating what is happening. Jobs are leaving America because it is cheaper to hire workers elsewhere. And LOWERING TAXES won’t really help.

          Jobs are not leaving America – jobs are COSTS, not THINGS.

          And, I don’t think that there is anything anybody can really do about it. Not the government, not the free market.

          False. See? That merits a “Fuck You.”

          What would be the difference between moving capital to India and moving capital from CA to TX? In both cases, “jobs” are “lost.” Why would it be bad for jobs to go to India but not TX? Californians would be left with the same problem either way, wouldn’t they???

          Besides, Americans are still MORE productive than people in India and China, for many types of labor. The Law of Comparative Advantage works the same in the US as in the rest of the world.

          I’m saying that the natural phenomenon of the FREE MARKET cannot be stopped. And, it may be dire consequences for the little guy here.

          “The little guy”? “Dire consequences”?

          See, that is the type of emotional tripe that deserved the “Fuck You”, Alice. In the case I mentioned above, why would “the little guy” not suffer the SAME DIRE CONSEQUENCES if the job “leaves” for Texas as when it leaves for India or Mexico? What if the guy cannot move to Texas?

          Then why the hell worry about this? If the job “left” the state, then just make the environment more friendly to the creation of new jobs.

        2. Re: Alice Bowie,

          And the government can DO something about it – STOP ROBBING PEOPLE!

    4. Actually it’s the horde of voters looking for the government to provide them with free stuff.

      They’re the ones who demand that the government increase taxes on the employer and the employee.


  15. It costs $74,000 per Sally to pay Sally $59,000 in base pay. Sally’s take home pay is even less!

    If it only cost $62,000 per Sally? Then he could afford to hire more Sallies!

    It is presumptuous 2 blieve that that the BOSS will hire more Sallies and not just keep the profit.

    Not that this is a bad thing for Boss and America (from his consumption). It’s just a bad thing for Sally. But who cares.

    1. Since in order to hire Sally she should be generating more than 74k in revenue, if you can get her for 62k instead, and the other Sallies will generate roughly the same amount of revenue, then he will be hiring as many Sallies as he can.

      The problem is, if she generates 75+/- 5k, its a tough call whether to hire her for 74k. 62k is a no brainer.

      1. Stop making sense. It throws the whole thread out of whack.

      2. It is presumptuous 2 blieve that that the BOSS will hire more Sallies and not just keep the profit.

        It is even more presumptuous to believe that the other economic variables would remain static. If a reduction in taxes reduced the cost of employing Sally that same effect would also be present at companies that compete with Sally’s employer. Ultimately, due to competition for customers, either Bogan or one of its competitors would start reducing the cost of their products. All the competitors would have to follow until a new equilibrium is reached. In reality it would probably be a bit of a mixed bag with the Sally’s getting a bit of a raise and the customer getting a better price for the same product. In addition, the lower cost of the product will result in the product being affordable to a larger customer base. A larger customer base will result in an increase in production and a increase in the number of employed.

        1. That’s definitely one of the POSSIBILITIES.

          However, my point is that it is just cheaper to hire outside the US than it is to hire Sally if here job is merely behind a desk.

    2. It is hard to blieve tht U R 2 stupid 2 lve LOL

    3. Re: Alice Bowie,

      It is presumptuous 2 b[e]lieve that that the BOSS will hire more Sallies and not just keep the profit.

      It’s HIS profit, Alice. He will hire only if he believes the extra labor will generate more productivity at the margin, compared to the cost.

      Not that this is a bad thing for Boss and America (from his consumption). It’s just a bad thing for Sally. But who cares.

      My heart bleeds for Sally. And yes, why should anybody care? It is ridiculous to ask an employer to keep someone employed just for the sake of keeping her employed, and not for the profitability she brings.

    4. “… and not just keep the profit.”

      Yeah, cause everybody that makes a profit sticks it under their mattress.

      Alice, you’re an idiot.

      He’s going to do something with that profit – maybe hire someone to paint his living room, or cut his lawn; invest it through the stock market in companies that employ people; loan it to the US government through a money market fund – hell he might even buy a meal out and tip Alice Bowie for waiting on him. Alice will then be very happy he “kept” his profit.

  16. How is it that the money that is sent to the Health Insurance company counted as “governmental theft”?

    1. A good portion of the high cost of insurance(in NJ) is due to the fact that the government in NJ thinks employers and their employees are too stupid to mutually decide what level of insurance coverage would work best for each of them. So the State of NJ mandates that if employers offer employees insurance, it MUST cover a fairly long list of specific types of medical procedures/product, regardless of if the employee actually needs or wants coverage for any of those specific medical procedures/products.

      In mandating this ‘minimum level of coverage’ the State mandates employers pay more for insurance to cover their employees. So in that sense, you could consider it ‘government theft’

      1. NJ has a special program for small businesses that wish to provide HC for their employees. It’s called the SEH.

        The Small Employer Health Benefits (SEH) Program became operational in 1994 to ensure small employers: (1) have access to small group health benefits plans without regard to the occupation of the group, or the health status of any of the group’s members; and (2) have the ability to renew the coverage from year to year regardless of the group’s claims experience or any changes in the health status of the group’s members.

        http://www.state.nj.us/dobi/di…..ehmain.htm

        And, the sister program, called the IHC, offers large group rates to individuals.

        I’m not saying it’s ideal, but it does cut costs for small groups and individuals. And the basic plan, is just an average HMO. $220/month for a 43 year-old smoker, and I think there is an even cheaper plan available. I priced out Massachusetts, and a similar plan was over $550/month when you figure in annual deductibles. Like I said, it’s not ideal, but it could be much worse.

        1. God I hate people that defend government programs with “it could be much worse…”

          1. Yeah, well, health insurance was a scam to begin with. It was created to keep hospitals busy.

            Unlike other forms of insurance, the primary purpose of these plans was not to protect consumers from large, unforeseen expenses, but rather to keep hospitals in business by guaranteeing them a regular income. While these plans benefited consumers by giving them a predictable method of paying for their medical care, they contained serious flaws that would become increasingly apparent as our health care system developed.

            http://findarticles.com/p/arti…..ntent;col1

            1. But you were not forced by the government to buy health insurance. If you voluntarily bought insurance – that was your personal decision that the contract offered something of sufficient value that you were willing to purchase. If you really mean it was a “scam” as in fraud, then your friendly class action plaintiff attorney would love to talk to you. I suspect that like many who call insurance a “scam” what you really mean is you wanted more coverage than you had paid for.

  17. How is this interesting? Anyone who has ever employed anyone or, heck, anyone who has ever glanced at their paycheck, already knows this. An employer pays a share of the SS tax? Gee, that would be interesting if it hadn’t been the case for, what, 80 years? That both employer and employee pay unemployment insurance? Shocked!

    Yes, taxes have a chilling effect on job creation in general, but none of the tax rates or fringe benefits cited were any different during the last boom, when unemployment was low. Didn’t Bush lower the roughly 15% marginal fed rate this fictional Sally pays? I know Obama spends like a drunken sailor, but I don’t believe any of the tax rates cited in the article have gone up in the last two years (or the last 16, for that matter). In fact, the only cost that went up was health care, which is a clusterfuck of both government and the private secotr.

    In other words, it was just as expensive to hire multiple Sallys three years ago (if not more), but suddenly other Sallys are unemployed now because it is too expensive to hire them?

    1. not to mention Mr. Fliescher is as good at business as his bro’s old boss:

      http://www.balloon-juice.com/2010/08/09/aris-brother/

      I think payroll taxes are restricting new hires, & the ‘self-employment tax’ is a beeotch. Should tax carbon instead of labor…

    2. Three years ago, many businesses were under the impression that the various Sallys they were hiring would generate much more than $74k/year in revenue in the future, since demand for everything was higher.

  18. Cavanaugh is right-wing hack who thinks the party line is an original thought.

    1. Max, H&R is a highly desirable trolling position. But that also means it requires a lot of effort. We don’t expect you to ever be right, but we do expect you to put in some decent effort, and displays like this don’t fill us with a lot of confidence.

      If you don’t start improving the quality of your trolling, we’re going to have a serious talk about your future here.

      1. Christfag!!!

      2. So in other words, the marginal value of Max’s trolling isn’t living up to the cost of keeping him around?

    2. I swear I saw an earlier post which you claimed would be your last.

      1. He’s not right about anything else, what makes you think he’d have been right about that?

  19. Free marketers like to point to the punishing restrictions on hiring private employers face and to the uncertainty of businesses that are holding off expansions because they’re worried about changes in government policy. I suspect the second claim is interesting but slightly inflated — the signals you respond to in business tend to be more immediate than speculative.

    First tim do not feed the trolls.

    Plus we have 9.5% unemployment now. we did not have that high of unemployment in 2005…yet employers then still had the same taxes then as they do now….why wasn’t unemployment 9.5% in 2005?

    Also the the signals you respond to in business tend to be more immediate than speculative.

    seems a bit strange. Sure most businesses does not require much speculation to simply adjust when things get slow or busy. But start ups do require speculation and new enterprise as well. So how much of our employment does require speculation? 10%? 5%? If the entire start up and new enterprise job market were shutdown how would that effect the total job market?

    To me it would look pretty close to what it looks like now.

    1. Plus we have 9.5% unemployment now. we did not have that high of unemployment in 2005…yet employers then still had the same taxes then as they do now….why wasn’t unemployment 9.5% in 2005?

      Businesses are pessimistic now. A business hires employees to do the work at hand and it hires employees to prepare for the future. The latter is not happening now. It is not the taxes now or then that matter in this decision, but the recognition of future higher costs (taxes would be one) that inhibits a business from hiring.

    2. Plus we have 9.5% unemployment now. we did not have that high of unemployment in 2005…yet employers then still had the same taxes then as they do now….why wasn’t unemployment 9.5% in 2005?

      Because we were in the midst of the largest credit bubble human history.

      That was not only not sustainable but also not repeatable, short of Weimar level hyperinflation.

      The tax burden and the politically imposed costs have been growing for decades. The economy has been running on a series of bubbles since the mid 90s and would have crashed then, without those bubbles.

  20. Is this that weak ass shit that Radley was bringing earlier?

    I like you guys, but blaming Pelosi for the exorbitant price he chooses to pay for his employees’ healthcare is differently-abled at best. He’s a free agent. Now, it’s true that if he just gives his workers a raise equivalent to the cost of the health insurance he chooses to buy for them, they wouldn’t be able to buy as much insurance, partly because they wouldn’t be in a group, but mostly because their purchase would not be deducted from their taxable income, whereas his purchase for them is.

    That sucks, but he could still let them take care of their own healthcare. That he doesn’t shows the competitive environment he’s in, which is only distorted, not created, by Congressional hanky panky.

    1. Actually the group plans cost more. If they buy their own it’s much cheaper.

      1. Says an idiot that hasn’t had to actually purchase it that way.

        1. If you choose a plan with less coverage it can be.

          1. No, no no. Anon’s right. I wanted to buy a Kia Rio, and my boss wanted to buy everyone BMW M5s, and the M5s cost more, on a per-person basis, than the Kia Rios. So we went with each of us buying our own cars, so the company wouldn’t lose its shirt on the group-cars scam.

            I’m being totally serious in this post.

        2. No, says someone who has had to purchase it that way.

          It should be obvious why group plans are more expensive that individual plans, but if you don’t understand the subject, it won’t be obvious to you.

    2. Employer provided health insurance, sick leave, work schedule compliance, retirement savings, etc, are all Congressional hanky panky.

      An employer is a businessman, just an ordinary person, or a group of such (a CORPORASHUN). What magical properties does an employer who sets out to create a new swimming pool cleaning gizmo have that enables him to furnish a micro welfare state for his employees?

      1. Why, a huge money bin in is backyard. Duh.

      2. An employer is a businessman, just an ordinary person…. What magical properties does an employer … have that enables him to furnish a micro welfare state for his employees?

        This. Having just moved to a tiny company (I’m employee #4) and the CEO is doing a pretty good job, but he’s not really an expert at navigating health insurance schemes. Fortunately, we’ve been successful enough that he can just throw money at the problem to make it more or less go away, but god forbid if we were working on thinner margins.

  21. So, did anyone mention that the carbon tax most often proposed would involve taxing carbon and then off setting that tax with reductions in labor taxes.

    Maybe the lame duck session energy bill will figure that one out.

    1. I don’t know what a labor tax is. The only “taxes” that an employee is absolutely stuck with are FICA, Medicare, and UI (with match contributions from the employer). These were supposed to be savings and insurance plans. Got a link to this off-setting labor tax plan?

      1. leavemealone,

        Lots of options for how that would be structured…any of those you mention could be reduced. Offsets in the income tax could also be included. These would be trickier with the current income tax structure as a carbon tax would be more regressive, but that could certainly be taken care of.

        Lots of proposals out there. Here’s a general clearing house for the idea.
        http://www.carbontax.org/introduction/

      2. leavemealone,

        Lots of options for how that would be structured…any of those you mention could be reduced. Offsets in the income tax could also be included. These would be trickier with the current income tax structure as a carbon tax would be more regressive, but that could certainly be taken care of.

        Lots of proposals out there. Here’s a general clearing house for the idea.
        http://www.carbontax.org/introduction/

    2. Waxman’s bill does not do that nor does the Kerry/Liberman one.

      If the Dems actually did do it would have passed with enough Republican support easy.

      1. Yes, the Cap & Trade bill was a mess.

    3. So, did anyone mention that the carbon tax most often proposed would involve taxing carbon and then off setting that tax with reductions in labor taxes.

      I suppose the “reductions” would be similar to Obama’s promise not to raise taxes on anyone making over 250k a year?

      Good try, but this is a bait and switch. If Congress passed a C and T law, only the repeal of the 16th Amendment would prevent them from starting to tax “labor” again. If you think that Congress is simply going to lay off the income tax because they promise to do so, you are either lying or really, really stupid.

      1. You think the repeal of the 16th ammendment woul actually end the income tax? Didn’t you get the memo? The constitution now reads “we can do whatever the fuck we want to do”, thanks to re-interpretation of various ancillary clauses.

    4. off setting that tax with reductions in labor taxes

      HA HA HA HA HA HA HA!!!

      Neu…I didn’t know you were a stand-up comic!

      How frequently to off-sets (when they happen at all) actually stick? Typically, once you open the door to a taxation method, the overall tax burden will always rises. Off-sets are fantasies, just like “Medicare payment cuts”.

      1. That doesn’t seem historically true. I think our overall tax burden is currently at a pretty low rate historically.

  22. You didn’t mention the $8,000 to $12,000 she pays in property taxes every year.

    If I hire a worker for my construction business, and pay him $15/hr, I figure it costs me about $22/hr. That doesn’t include all of my overhead. I have to charge between $35-$40/man-hr to make any kind of profit. When I tell people that, they look at me like I’m crazy, and trying to rip them off. They just don’t understand. So, they hire Joe Fuck-wad to do it for a 6-pack of Coors light and a pack of Marlboros. Then, they call me to come finish, or fix, the work he started. Then, I charge them double. Fuck ’em. Then people complain that they are getting ripped off by these fly-by-nighters, and the State of NJ passes a law requiring all home improvement contractors to be licensed. Which causes me to have to raise my prices even higher. But me? I’m the greedy bastard.

  23. BTW. The worker’s comp and liability insurances are not taxes, and not paid to the state. They are bought from private insurance companies. However, the state of NJ does mandate that you have that insurance. And, the insurance company will audit your books to make sure you have the number of employees that you say you have.

    When the NJ income tax was enacted, it was supposed to be temporary, to help fix the schools. That was in the 60s, IIRC.

    1. And, they told us, in the 70s, that the taxes collected from the AC casinos would eventually eliminate the income tax, once and for all.

    2. Yes, that’s why those rates were the lowest ones mentioned (or at least one reason)

    3. hmmm so the govmt makes you buy something you don’t want, at gunpoint? sounds like a tax to me.

      1. I don’t know what the penalties are, to be honest. But, a way around it, is to pay your workers as hourly subcontractors (self-employed) and hit them with a 1099 at the end of the year. Then, technically, they would be required to carry their own insurance. But, in NJ, a business owner is not required to carry workers comp on himself. But the insurance companies got wise to this. If you are a contractor, and hire a subcontractor, your insurance company wants to see proof that the subcontractor has WC, otherwise your insurance company will backcharge you, based on what you paid him.

        Make sense? I didn’t think so.

  24. Ya gotta remember that our “progressive” friends don’t understand (or maybe don’t care) why businesses hire people. They way they see it, businesses have a social duty to “give people jobs”; there isn’t supposed to be any connection with the welfare of the business. Teh Profits are Teh Evil!

    1. I believe I have some “social responsibility” as an employer. But nothing near what these “progressives” think. I also believe that I should give back to the community, which is why I am a member of my local Rotary Club. But it’s never enough for some of these progressives. Funny, I don’t see too many progressives at the weekly meetings. I think that they want to be taxed, so that they don’t have to bother doing any community work, or donate money. It’s much “easier” for them if the government just taxes them/us, and takes care of the disbursements to charities.

      1. Isn’t supplying people with goods they want at prices they like being “socially responsible”?

        1. That’s always been my business philosophy. But, I try to keep guys busy, even if I don’t really need them, but could use their help, or make sure they get 40 hrs a week, that kind of stuff. I try to think of my workers, and keep them happy. I guess it’s more of a management style. You know, happy workers are productive workers. Workers that think you are shafting them, will rob you blind. However, some guys are never happy, and some will rob you regardless. It’s really a balancing act, especially in construction, and food service, also.

    2. They way they see it, businesses have a social duty to “give people jobs”;

      This is actually quite close to the truth, as most of our dear trolls have demonstrated so far.

      1. It’s exactly the mindset of a large number of people. Just scan various HuffPo articles and comments and you’ll see that sentiment repeated again and again.

  25. I guess the point here is that if the government didn’t require it this guy could pay this lady x more in salary and she could choose in the market to purchase similar protections to the government benefits covered by her contribution. I think that second part is a big maybe, but perhaps that is because currently the government (literally) dominates those areas. Still, any transition period would be a bitch for a lot of folks I imagine.

    1. The point that while it is wonderful to have all of these things, they cost money and reduce employment. That is why Europe has such consistently high unemployment rates. With this kind of system you end with work being great if you can get it but being very hard to find. That a recipe for high unemployment and all of the problems that go with it.

      1. But if you have to be unemployed, Europe would be the place to be so…
        My concern is that what is supposed to make these programs “work” (to the extent they can be said to) is they create a great big pool (I’m thinking workmens comp, SS, etc) to spread costs out. Without government coercion that might be hard to duplicate in the private sector, but again, who knows? I mean, the private sector takes pretty good care of car insurance…

        1. It is better to be unemployed in Europe. But it still sucks not to have a job. And it is still very corrosive to society. I really believe that having a good job market is one of the best things you can do for your society. When unemployment is high it not only screws the unemployed it also screws the employed. When the job market sucks, employers can fuck with employees more because the options are limited. Work is grimmer place now than it was six years ago when unemployment was at 5%.

          Also if the job market is good, it is easier for people to overcome mistakes like going to jail or getting fired. An economy with high unemployment is just awful even if it does come with lots of bennies.

        2. Notice you’ve never seen me do a health insurance commercial…

        3. Re: MNG,

          But if you have to be unemployed, Europe would be the place to be so[…]

          That is, until the government runs out of victims to suckle from…

    2. Of all the trolls, MNG, you do seem to be the most thoughtful most of the time.

      1. MNG isn’t a troll, I think he honestly disagrees with us. But he is usually intelligent and intellectually honest, if wrong.

        1. Thanks to you both for the kind comments.

        2. Yes, that’s probably not an accurate term. Lazy diction on my part.

  26. Correct me if I’m wrong, but under obamacare won’t crossing the line of 50 employees dramatically change the costs of employees for small companies as they try to grow? If true, wouldn’t companies hold at 49 for as long as the possibly can until they are sure they can sustain the new levels of costs?

    1. If true, wouldn’t companies hold at 49 for as long as the possibly can until they are sure they can sustain the new levels of costs?

      Shhhh. You racist.

    2. The 50 employee line has been around for awhile. In the mid 90’s I worked for a guy that started a second company to avoid crossing the 50 employee line. In addition my boss was not technically an employee, he was a contractor.

  27. The Insurance one is beautiful. That company could get Sally McHooters a HSA. single 16/month/2000.00 deductible, family 90/month 4000.00 deductible and just give her 4 grand a year in monthly installments w/ or w/o kids and call it a day.

  28. All of this is why so many businesses use self-employed subcontractors instead of employees. It’s a system that has a lot of benefits for both parties. So of course the state government in Massachusetts likes to make noise about cracking down on “abuse” of the system.

  29. Kinda crazy when you think about it.

    http://www.web-privacy.at.tc

  30. Although I realize it is could be a tad cliche to bring up Atlas Shrugged at this point, I just have to.

    We are very nearly literally living through episodes in the book. The whining by the looters about “selfishness” and “social duty.” The threats from government thugs. The dismissal of the profit motive as “evil,” and embrace of ‘need’ as a moral virtue and a pretext for any action taken against business owners and employers, the draconian regulations and restrictions placed on businesses and their hiring practices by Directive 10-289, etc.

    No wonder the statists hate her. If there was one book they could burn without being likened to Nazis, I’d bet that would be it.

  31. If you read the original article you realize that F’s main complaint is he has no freakin’ idea how much Obamacare is going to cost him in taxes, regulations, increased healthcare costs, etc. HE CAN’T PLAN.

    As a “micro-business” person, I understand. Obama legislated our affordable health care plan out of existence (deductible too high — no co-pays).

    If you think we can’t afford that high deductible when we get sick f*ck you — we ran all the numbers. It’s cheaper for the very sick or the very healthy to go with a high deductible hsa compatible plan in our state at least. The middle sickly ones don’t get any real benefit but don’t loose out either.

    Anyways —

    We completely can’t plan. We were going to buy a new house, we will need one due to a growing family, but decided to put it on the shelf for now.

    THe other thing about F’s original article — everyone in the comments complaining businesses should be hiring more…and saying business owners are too stupid/lazy/greedy/intent on punishing Obama.

    …Why aren’t those whiners out making businesses and hiring people?

    1. I have the High Deductible plan. I went from paying $600 month for family plan to $120.

      However, I’m having a hard time getting medical providers to tell me how much a medical visit REALLY COSTS. And, not the amount they bill insurance.

      1. The best part of my High Deductible plan is that I pay way less in premiums.

        This way, when I get sick and the insurance company weasels out of paying and I declare bankruptcy, I didn’t pay a high premium.

        1. If you are sure the insurance company will weasel out of their obligation, why do you pay them anything at all?

          1. Hey, they do pay for simple shit.

            I don’t recommend having a High Deductible if you intend on having a baby though.

            1. Why not? We’re on a high deductible plan and had two kids. If you average it out over several years, it costs less.

              1. Na
                Much cheaper to pay the $600 per month than what the deductible and MAX out of pocket for my plan.

            2. Your High Deductible plan pays for simple shit? We aren’t talking about the same thing then. My High Deductible plan didn’t pay for shit until 5K. Never actually used it all. It was only for worst case-scenario type situations. You know ….. “insurance”, instead of a all you can eat buffet.

              1. Mine is AMAZING.

                It actually covers 100% w/NO COPAY wellness visits 4 me, wife, 2kids.

                It even covers GYN for wife w/NO copay.
                $118 per month.

                1. Not all High Deductible Plans are alike. Ours is through Blue Cross Blue Shield Illinois (though they have regular independent insurance and I have to get mine through HIPPA Section 5: ICHIP due to a pre-existing), we’ve never met the deductible.

                  What’s really amazing is every time we get a bill they go in and negotiate for us and get it knocked in half…which is why we probably haven’t met the deductible.

                  But it does make us think twice about procedures. Which turns out to be a good thing. After some research we’ve discovered some things recommended were crap.

                  1. “they” being my husband and son. They’re not high risk.

  32. At first it was surprising to me that so many commenters seemed to read this article to be about Sally, what compensation she would work for, how removing some of the cost of employment would affect her, etc.

    But then I remembered the effect of undiluted partisanship on all public discussion and remembered that only information that supports the notion of government as that great giver, the caretaker of all things good, is allowed to reach many minds.

    The point of the article was that that great government deity is making it expensive for employers to hire people, irrespective of how the employees themselves feel about their compensation and benefits. The more expensive it is to hire the less companies will hire, just like the more expensive any component of doing business is the more companies will find a way to minimize their need for that component.

    The idea that the government can pile on debt without restraint, continue to overwhelm all wealth-producing activities, and enhance its role as a great giver with no end to resources is so contradictory that it’s like refusing to accept some basic physical laws – like believing that I can keep draining a lake forever and it will still have water to drain.

  33. Some people talk about companies being profitable like profits are a problem.

    Even if entrepreneurs did keep all the money they saved, why would that be a problem?

    You know what makes companies expand?

    Profits.

    More profits means more expansion AKA growth. Economic growth–that’s what we’re shootin’ for here…

    Profitable companies? That’s not a problem that needs to be solved.

    1. Ken,

      I’m not getting my point across and everybody is calling me stupid and saying ‘Fuck You’.

      I am not saying that profits are bad. I’m a capitalist. I believe in free markets. I believe that government should do what they can to promote both WITHOUT TAXING EVERYBODY to do it. It can do things via policy.

      I welcome expansion. However, if we all start creating businesses where you can’t employ Americans because we can’t compete with companies that go outside of the US, there will be a problem in the long run.

      And once again, I’m saying that there is nothing anyone can really do about it. You can’t pass laws prohibiting outsourcing and setting up shot outside of the country. And, you can’t lover the COST OF LIVING in America so that workers can deal with lower salaries.

      At the end of the day, the American Worker Bee will have to deal with lower standards of living. And probably, as a result, taxes will go up on the ‘rich’ and us business people. Although we keep getting richer, the burden of dealing with unemployment, under-employment, and salary stagnation seems to keep falling on us.

      I wish take simply eliminating all of the taxes we pay (and I’m not suggesting that) would solve the problem. The cause I’m stating here is simply not discussed.

  34. Imagined conversation with a liberal…

    C: “Realize this: no business owner HAS TO create a job.”
    L: “they do if they want to make more money, if they want to grow their businesses…”
    C: “EXACTLY! And so then, you see that the only incentive to create jobs is the bottom line? And that the more difficult it is for the employer to profit by a hire, the less they will hire? the jobs are his to create… and the costs of that creation go FAR beyond the salary that is paid. But you’ll never understand that because you’ve never even imagined trying to actually create a job.”
    L: “Well, I voted for Obama and he’s creating jobs!!! The federal govt has grown the payrolls, and that wouldn’t have happened with McCain.”
    C: “A small business owner doesn’t get the money they need to create jobs by imposing a pay-or-go-to-jail penalty, like the govt can. And the business owner can’t borrow endlessly to pay salaries. Eventually, he goes bankrupt. More to the point: every single new employee Obama has hired is being paid… with DEBT financing. So, every job he “created” is just another step into national bankruptcy.”

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