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Comment Re:Why? (Score 1) 275

I'm a displaced Economics professor, not a corporate finance type, but, yes, there's a well known explanation: the "Efficiency Wage Hypothesis".

This hypothesis suggests that even in a fully competitive market, it could make sense to pay employees above the market wage, as this would

a) essentially give first pick of the better workers to that company

b) increase the cost to an employee of getting fired for "shirking", and improve output by the increased effort,

and, possibly most important at the moment,

c) reduce turnover and the training costs involved.

Unemployment has certainly dropped significantly, and by more than the "official" rate. (the regular rate doesn't make a lot of sense, anyway, if structural changes are happening, as it ignores those who have given up. Use U-4 or U-6 instead).

At the same time, we are seeing "normal" economic growth of 3% for the first time in a decade.

Put these together, and it means more workers being hired--including hiring them away. So a bonus, especially if repeated, makes staying put instead of jumping jobs make sense--and the bonus costs the company less than training new workers.

Adding fuel to this fire, the reduced tax rate is a reduced cost of doing business, meaning that the optimal level of production increases for a firm--meaning even more hiring/labor demand.

Whether firms like it or not, all of these factors mean the cost of labor *will* go up, and those that don't pay higher wages are going to lose workers (and therefore production).

Bonuses and raises *before* losing workers makes sense, and cost less than finding and training new workers.

It doesn't take any benevolent motive or political alignment to explain the firm behavior, just the old profit motive (aka "greed")

doc hawk

Comment Re:it needs to be easy. (Score 1) 178

yep. needed because it *is* a direct tax.

Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons

From Article I, section 2.

For this reason, the USSC struck down the income tax. as a direct tax.

Subsequently, the the XVIth amendment created an *exception* to this limit, not a reversal. Save for the income tax, direct taxes remain banned without apportionment.


Comment Re:They should talk to Congress, not courts. (Score 1) 178

> That isn't self-consistent.

No, you missed everything. That is simply what the law is right now, despite your attempt to impose your own structure on it.

>but your word game is about something different than what I said.

My "word game" is explaining that what you wrote just isn't the issue here, but rather a common misconception.

Texas cannot pass a tax on a New York Merchant.

But no such tax is involved when Texas imposes a use tax on a Texan for a purchase from a New York merchant. The issue is that it can only look to the Texan, not the yorker.

(Actually, at *some* level of sales, the yorker would have sufficient contacts with Texas that Texas could assert jurisdiction under International Shoe and its progeny, but that would only make money for lawyers, and the costs of litigating these would drive what happened).

>Congress is welcome to pass a law requiring states who do collect a sales or use tax to require
>reciprocal reporting with other states that also require it,

There are issues about mandating the state participation. Again, states probably have to opt in

>but you're going to need some very new rulings from the Court before you manage to put
>requirements on people in states like Oregon that have neither of those things.

No, not if you are actually familiar with the past rulings. USSC has made it clear that they are interpreting in the absence of legislation, no mandating. This is properly Congress' domain, not the courts. However, when Congress doesn't act, the courts still have to handle disputes.

As I wrote, it would be difficult to force states in, but Congress can also regulate the shipments themselves if it comes to it. Even if it can't force a state in (that could go either way at the USSC), it can impose requirements on the shippers.

And as a practical matter, states without sales taxes have nothing to collect, so might want not to opt in (again, assuming their Constitutional issue is decided in their favor), so as to give their merchants an edge in other states. For better or worse (and I'd argue worse), Congress has been quite effective in using road construction and other issues to trample on state prerogatives in the past (55, .08, and so forth). Or different postal rates for states that opt in. Or (more practically) regulating the large sites that most sellers use to get found. Or an excise tax on the act of shipping (rather than the goods themselves) out of that state. Or . . .

But in the end, this is for Congress.

Comment Re:it needs to be easy. (Score 1) 178

>Sales by zip code will not work, because zip codes do not follow municipal lines.

That's just too bad.

Zip code already exists in all transactions.

The five digit sips can be changed, or the localities or states can solve the division for the zip code.

Using zip is the least burdensome way to deal with distribution, and those jurisdictions unwilling to accept that can just not opt in and try to collect the tax themselves . . .


Comment Re:They should talk to Congress, not courts. (Score 1) 178

I am a lawyer, but this isn't legal advice. I charge for that.

No, it isn't comparable to that at all.

All or nearly all states have a "use tax" in the same amount as their "sales tax." Almost everywhere, both of these taxes are on on the purchaser, not the seller. In the sales tax case, the vendor is required to collect that tax on the buyer for the state and hold it in trust. (The only exception I know is California, for which the tax is on the seller. The only practical difference is if the merchant late files bankruptcy, making California's dischargeable after a time if the returns were filed).

Anyway, the taxes already exist, and are on the buyer, not the seller. The questions is not whether the tax exists, but whether the seller can be compelled to collect the taxes on behalf of fifty states, a few territories, and the zillions of subdivisions.

If every city could require its own tax return, it would be so burdensome as to take out every seller other than amazon (and maybe walmart). In fact, the compliance costs would exceed the taxes for most sellers. (sidenote: prior to last month's changes, compliance cost for the US corporate tax were twice the revenue raised).

Now, at some level of sales volume, the burden becomes relatively small compared to the profits, and it stops being unreasonable, at least in principle.

Note that the prior law is *NOT* that the taxes cannot be assessed, or even that states can't require them, but rather that in the absence of Congressional action, the states can only look to their residents, not the out of state vendors.

I really don't expect that to change (in fact, it is really hard to argue the position that Wyoming can constitutionally impose an obligation on the Wyoming vendor).

Rather, there will be some rulings reached along the way to a similar result, which serve to clarify that this is Congress' job.

Twenty years ago, the sane thing to do was leave the infant internet alone and see what happened; maybe these small vendors would change the world or something.

Today, the sane Congressional solution would be to require a single monthly report and payment, with the report broken down by zip code. (and for those jurisdictions that have multiple rates within a zip code, that's just too bad. Get your act together).

To be clear, states would have to opt in to this federal program (but those that didn't would be stuck trying to collect from their own residents).

A threshold on sales for having to file would be appropriate. Given that, as the world has worked out, most sales of very small merchants occur through amazon, eBay, etc., tacking this on to their system would be a minimal cost (in fact, they could take care of it entirely, leaving no burden on the seller).

For that matter, there's not a compelling reason not to simply apply this to *all* sales for such aggregators that collect the funds; it would even be simpler.


Comment Re:Absention gets the seat (Score 1) 498

Nevada actually has a None of the Above choice for all statewide offices, including presidential electors.

unfortunately, it does't actually mean anything, and is just a null vote. I"d *love* to have it force a new election banning the current candidates.

In practice, it and the third parties tend to pick up a larger combined share than the margin of victory.

Comment Re:Long Live The Republic (Score 1) 498

That really came, though, as a taxation issue.

The rise of the parliament as legislating came from the demands of the English parliament that the king address their grievances before awarding revenue. In time this power of the purse became supreme. It was essentially the case that the king was asking those who would be taxed for payments in excess of their feudal obligations.

It really wasn't so much land *ownership* as the *taxes* from it that led to this. I think even fairly early English usage enfranchised large personal property tax payers, such as merchants.

This system spread to most/all former English possessions, such as the US.
Universal franchise is a fairly modern notion.

One of my own pet schemes is to expand the constitutional guarantee of a republican form of state government such that each state must have a legislative chamber in which *only* net taxpayers vote (and, yes, there's a lot of room to quibble about who that is [personally, I wouldn't include a government salary as a transfer to be deducted]), repeal the idiotic 17th amendment (the worst mistake in the history of the republic, and the proximate cause of the modern centralization of power), and require that the US senators be appointed by the tax-paying chamber of the state legislature--to the point that the Senate would refuse to seat any person who had been chosen in a shadow election and rubber-stamped by that house.

hawk, not a small-d democrat

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