A Maximum Wage

[Big Cox 88]

Terrible idea, there shouldn't even be a minimum wage. Free market bitches

 

[The Passenger]

Terrible idea, there shouldn't even be a minimum wage. Free market bitches

yes that would work fantastically

 

[LouisCK]

Terrible idea, there shouldn't even be a minimum wage. Free market bitches

I'm fine with this as long as we also disband the police force, defence force etc as well.

Then I can just literally steal from the rich, instead of wanting to just tax them a bit more.

 

[DrVanNostrand]

No minimum wage? Then we'd end up with a totally ****ed culture of tipping like the Yanks. No thanks.

 

[Copernicus]

You want to know why the developed world enjoys the benefits of capitalism? Because it's been exploiting the rest of the world for centuries, even pre-capitalist days.

Dependancy and World Systems Theory - Gunder Frank

There is certainly that aspect of it. However, even in the days of guilds and before the age of exploration the tenets of capital were dragging Europe, for instance, out of the feudal era. Not without difficulty, and certainly not without wide income disparities, but it's pretty hard for me to imagine a system that would have done better, or even really gotten close, in terms of creating prosperity.

Your argument is against growth in general, which no economic system (I am sure there are theories that argue against it, but I'd be hard-pressed to come up with one that works in a reality) involving large numbers of people can adhere to if they want to eat well and be clothed and housed as they wish to be in this era.

 

[volcboy]

Here's a left-field idea. Rather than taxing the super-rich more (which I don't disagree with, by the way), how about ensuring that the lowest paid worker within a company must be paid a set percentage (per hour based on a 40-hour week) of the highest paid (i.e. CEO). That way, if the CEO wants to pay themselves a ridiculously high salary, they have to increase the amount they pay their employees. It could be extended to executive payouts - all employees would have to receive a lump sum representing a % of any payout given to board members as a golden handshake.

Probably too difficult to enact in practice, but it would make for a fairer distribution of wealth within an organisation based on labour provided.

 

[LouisCK]

Here's a left-field idea. Rather than taxing the super-rich more (which I don't disagree with, by the way), how about ensuring that the lowest paid worker within a company must be paid a set percentage (per hour based on a 40-hour week) of the highest paid (i.e. CEO). That way, if the CEO wants to pay themselves a ridiculously high salary, they have to increase the amount they pay their employees. It could be extended to executive payouts - all employees would have to receive a lump sum representing a % of any payout given to board members as a golden handshake.

Probably too difficult to enact in practice, but it would make for a fairer distribution of wealth within an organisation based on labour provided.

That's pretty much how it works in Japan. CEO's make about ten times the average worker's salary. Which most would agree is fair enough.

 

[JuddsABlue]

if that idea was to be implemented tomorrow with some type of x100 band

So if the toilet cleaner is earning 30k a year, then the CEO can earn a max of 3 million

How many CEO's currently working under the 100x bracket will use this as a reason to jack up their own salary to meet whats legally allowed.

I think once you give people something to aim for, a lot more people will start to hit it

Its easy for everyone to imagine how they would distribute the countries wealth if they were given the ability to, but in a free world it doesnt work like that and it never will. People will always try to accumulate the most of wht they need, in this century its money. A thousand years ago it was food, do you think a family of ancient man is going to be worried about how many deer he is killing and whats left for others? He kills as many deer as he can.

I hate hearing people say "we cant do that because thats not us". That is exactly us, we are here because we got us here, this is whats natural to us. If we re ran history a thousand times under the same circumstances, we still end up here. This is as natural as it gets for humans. We collect the things we need to ensure our own survival.

Lions dont worry about other lions, bears dont worry about other bears, humans dont worry about other humans

 

[Roobs321]

It sounds nice in theory (say a 500,000 maximum p.a., unless you have 6+ living in your household, then it ups 100G for each extra person).

I dont think anyone in Australia necessarily deserves more than 500G a year, whatever the job. But I dont cry about it either, if Gina has all that money, well I guess she earnt it.

However, it goes against the ethos of capitalism, and if Australia was the only one doing it, it could have untold cons down the road.

 

[The Passenger]

^^^^ O my god she's still alive

back away... back...

EDIT: bloody Roobs321 getting here post in about a second before mine

 

[radiojake]

I dont think anyone in Australia necessarily deserves more than 500G a year, whatever the job. But I dont cry about it either, if Gina has all that money, well I guess she earnt it.

That is a misnomer

 

[Harvey Leadpipe]

I'm fine with this as long as we also disband the police force, defence force etc as well.

Then I can just literally steal from the rich, instead of wanting to just tax them a bit more.

Without buying into the lefty/righty argument, can the rich then shoot you in the face while you're trying to do that because they can actually afford a proper weapon, then just leave you in the gutter for the slaves they employ to wash you down the gutter?

 

[LouisCK]

Without buying into the lefty/righty argument, can the rich then shoot you in the face while you're trying to do that because they can actually afford a proper weapon, then just leave you in the gutter for the slaves they employ to wash you down the gutter?

Yep, in that capitalist utopia that is the likely scenario.

 

[Harvey Leadpipe]

I'm in. Shoot the lazy thieves.

 

[LouisCK]

The rich you mean? Deal.

 

[Caesar]

As someone has already alluded to, it causes problems with the aggregation of capital. You can't set an artificial ceiling on capitalism.

 

[00Stinger]

Whilst I agree people earning millions a year is ridiculous, you cannot cap people's income.

Unfortunately people like Gina the bulldog employ thousands of people a year. If she is capped at say $500k, she would scale back her operations which would cost people their jobs and hence do more harm than good.

 

[BomberFletch31]

But then, judging by your posts, you're a sub 50k earner who watches a lot of ACA and reads a Murdoch rag. You fight on behalf of the super-rich because you're stupid enough to think you'll be one of them one day.

I'm a sub 50k earner, but I will fight on behalf of the super-rich because they have earnt it. If they have accumulated their wealth over the years, whether it be through their own hard work or inherited from their family, what right does the government have to legislate what the maximum value each person is entitled to have?

There is no such thing as too much. Greed is good.

 

[Tex_21]

Nice to see you still stirring up a reaction LouisCK.

Sadly, not many have laid much of a glove on you. Disappointing, seeing as it shouldn't be too difficult, but we've been there many times before.

Looking at the current situation in Australia, (ignoring current revenue volatility, as revenue is always volatile, and always will be - it's tied closely to NGDP, unless we move to greater consumption tax reliance, but that has other issues due to the regressive nature of it, something I'll come back to) we generate sufficient revenue as it stands to fund good, meritorius schemes like increased education funding (I think the education model needs to be looked at first, before increasing funding, but that's another argument), NDIS etc. However, pressures come through a large amount of spending on poor choices - things like industry support in the automotive industry (let it die, it is not necessary, and I say this as a rev head), FTB B (and parts of FTB A), some middle class welfare, FHBG (state level), Baby Bonus (and arguably funding to arts and sport) etc. If the poplace wants to keep this garbage spending, then it has a choice to make regarding more taxes, as the budget at federal level has been in structural deficit since around 05/06 by most estimates.

A simple, non-distortionary way to raise more money is via consumption or value-added taxes (on as broad a base as possible) such as the GST, however that does have the downside of being regressive. There is the option of increasing MTRs, however this does have an adverse impact on economic activity (how much depends on a range of factors relating to the actual proposal), and this also applies to company tax (which with dividend imputation is kind of a 'hollow' tax anyway - anything which is distributed to shareholders is taxed at personal rates). Resource Rent taxes are an option, however these are extremely volatile, and not a good base for a tax system (better suited to funding a longer-run savings program, which can be used to mitigate some dutch disease factors, if a SWF is investing primarily abroad). Something I wouldn't mind is a reinstatement of some form of death/estate taxes, if we are looking to generate more revenue, provided the relevant exemptions apply (family home or something like that). It doesn't provide disincentives to work toward increasing income, and mitigates the 'inherited wealth' effect (on that - look out for a new book coming out by Andrew Leigh later this year looking at income and wealth distribution over the past century or so in Australia. Have seen a lot of his analysis, and spoke to him about it, really interesting stuff).

On the topic of university education, in particular free education. Free university is not all it is cracked up to be. Simply put, it is one of the most regressive policies available to a government, as it results in unskilled workers subsidising those with a tertiary education (who earn a premium of around 10-12% on those who only finish high school in Australia).

 

[nicky]

What would happen to our current skilled workers if we made education free? Not sure what point you're trying to make.

 

[Tex_21]

What would happen to our current skilled workers if we made education free? Not sure what point you're trying to make.

Very little. The point I'm making is that free university education, whilst it sounds good, is regressive. In order to pay for it, you need to tax higher, and that tax is borne (directly or indirectly) by all in society, including those at the bottom of the socio-economic ladder. There have been numerous studies into tertiary education funding, looking at public and private benefits, and there are substantial public benefits, which is why it is largely government funded (a domestic student pays roughly 30% of the cost, deferred to HECS, the rest is paid by the government), however there are also large private benefits (the 10-12% I mentioned earlier), making university education a massive private gain in NPV terms.

In a simple analogy, free university education results in McDonalds workers paying for lawyers to go to uni.

 

[The Passenger]

On the topic of university education, in particular free education. Free university is not all it is cracked up to be. Simply put, it is one of the most regressive policies available to a government, as it results in unskilled workers subsidising those with a tertiary education (who earn a premium of around 10-12% on those who only finish high school in Australia).

it works extremely well in ireland. after sustained decades of investment in education, which included three free years of university education for everyone, it was seen as one of the driving forces behind the celtic tiger which resulted in a highly skilled workforce.

 

[Tex_21]

it works extremely well in ireland. after sustained decades of investment in education, which included three free years of university education for everyone, it was seen as one of the driving forces behind the celtic tiger which resulted in a highly skilled workforce.

The biggest driving force behind the Celtic Tiger was debt, and lax lending.

I should be clear, free university education does have benefits, nobody is disputing it. However, similar to raising a greater proportion of tax through a consumption base, the major downside is the regressive nature of the policy (regressive in the fact that the poorest pay more in than they get out - the opposite nature to the MTRs), which is huge. A less regressive move would be to fund more scholarships toward high-performing students from lower socio-economic backgrounds, or better yet (as the latest policy change has shown, and I assume Bruce Chapman is jumping up and down about it) income-contingent loans.

 

[nicky]

Very little. The point I'm making is that free university education, whilst it sounds good, is regressive. In order to pay for it, you need to tax higher, and that tax is borne (directly or indirectly) by all in society, including those at the bottom of the socio-economic ladder. There have been numerous studies into tertiary education funding, looking at public and private benefits, and there are substantial public benefits, which is why it is largely government funded (a domestic student pays roughly 30% of the cost, deferred to HECS, the rest is paid by the government), however there are also large private benefits (the 10-12% I mentioned earlier), making university education a massive private gain in NPV terms.

In a simple analogy, free university education results in McDonalds workers paying for lawyers to go to uni.

What a load of rubbish! A fair tax system will not have mcdonalds workers paying for other people's uni degrees. If the storm troopers for the rich would look at the situation with open eyes they would see the benefits of the wealth tax the OP is endorsing. I'm not talking about people on 6 figures per year, i'm talking about 7 - 10 figures.

 

[Catsmaninamerica]

HOng Kong has a 10% flat tax rate and last year the government made SO much money they gave every holder of a HK id card the equivalent of $1000 each due to the surplus. Tax people less and they dont mind paying it, and it gives business incentive to take risks and create jobs.