Where should a corporation focus, on profit or corporate social responsibility? In my opinion the answer is profit. It doesn’t have to be short-term profit. It could be longer-term profit like Amazon did but it should be on profit with corporate social responsibility as just part of the ethos of the company. A company can put some effort into being a great place to work, a great “neighbor” and in doing what is good for the environment but profit is what makes the system function. That’s the “invisible hand” that Adam Smith talks about. Without that and it’s just central government planning. The market will reward some degree of corporate social responsibility so that’s already reflected in the market. There should be a societal rethink of taxation as well. Taxation should be minimum, for the average worker as well as for the wealthy. Taxes should be capped at a certain income level just as social security taxes and benefits are. Everyone is focused on “taxing the rich” but really taxation should be just a minimum amount that everyone gives to the government for the minimal service that the government provides. If someone is worth 10 times what the average person is, that doesn’t mean that their taxes should be 10 times as much. They don’t get 10 times the benefit. The whole economy would benefit if everything wasn’t taxed. Let’s say you have paid whatever the minimal individual limit is and then after that if you manage to have $100k (just as an example) invested in the stock market you shouldn’t have to either keep that money in the stock market or sell and give 40% to the government (short-term cap gains). You will probably leave your money in the market too long because you don’t want to pay that much in taxes. If you can keep it in the market for more than a year you will only pay 15% (currently). If you have already done your “duty” and paid your minimum taxes, you shouldn’t have to pay the government anything just for making an investment decision. If you are able to have it all in a 401k (and not everyone can) then you can trade without getting taxed until you take it out but that should be the case for everyone and for any amount of money. You should be able to put anything that you can save into a brokerage account and buy or sell and not have to worry about the tax implications. Currently taxes cause people to have to make less than optimal decisions. If you want to keep the 15% capital gains rate for anything that you do actually take out of your brokerage account that might be OK but beyond a certain amount even that shouldn’t be taxed. Everyone should be encouraged to invest for your own retirement, for your own benefit. Cutting the government in on every investment you make for your retirement isn’t really productive. It’s like saying that the government can make better decisions for your future than you can. History tells us that government doesn’t make better, more efficient decisions for your life than you do. It doesn’t make better, more efficient decisions than the private sector as a whole. No one needs a politician to spend your money, get into debt for you and then take part of every investment that you make in life. No one should be in charge of deciding what percentage of your money they are “entitled” to.
Taxes should be as low as possible and still fund the government, yes. Nonsense. Taxation is not "what you pay for government services." If that was the case, they would be fees, not taxes. Taxation goes to pay for the government's operation. The military, the CDC, (often) local police and fire departments, Veteran's Hospitals, things like that. They are paid for by everyone. Thus the driving incentive is not "people should pay by what they get" but "people should be taxed to pay for the government, and should be taxed in such a way as to cause minimum misery and minimum impact to the economy." Let's take your argument at face value. Everyone gets the same (or at least similar) value from their taxes, therefore everyone pays the same tax. That comes to $42,000 a taxpayer. We levy those taxes. Since the average income in the US is $31,000 a year, that means that about 75% of Americans default on their taxes and go to jail. That would be a pretty significant amount of misery, and a massive blow to the economy. Instead, one might implement a flat tax rate. Tax everyone between 34 and 41%, depending on your assumptions. (This would allow us to pay for the current 6 trillion US budget.) What happens then? The rich see little change. The poor see their taxes go from 0% to 34%. The rich will not change their behavior, of course. The poor (and a large part of the middle class) will see their spending power decline dramatically. That will mean fewer cars, consumer electronics, restaurant visits etc. sold. This would have a very negative impact on the overall economy. So instead we go with progressive taxation, so that when more money needs to be raised, it is raised most significantly on the rich. This does not change their economic behavior significantly. They will not buy less stuff because they keep more of their income, so the economy is impacted less overall. (They do invest less of course, but this does not have a direct effect on the economy as reduction in consumer spending would.) Progressive taxation, although it is often attacked as a redistribution of wealth or something, is merely the least damaging way to pay for the government. Of course. As it would benefit the economy hugely if the government simply sent everyone $10,000. Neither is sustainable. Agreed. Fortunately you don't need to. There are several investment options that are tax-free until you withdraw the money - and when you withdraw the money you are only paying ordinary income tax on it, so you can choose how much you tax you want to pay by how much you withdraw. Again, you have tax free options here, where the government is not involved until you withdraw the money. Until that time you can invest the money however you like with no tax penalties. That is part of their job as spelled out in the US Constitution, so yes, they do in fact need to do that. Then use a 401k.
I can cite one definite inequality where the rich make a profit on COLA (cost of living increase ), which is a determined actual dollar amount, which represents a percentage increase on the consumer index, and is subsequently distributed as a percentage increase of income. Thus if COLA is $500 pr year and that represents a 2% increase on the actual average cost-of-living, a person making 20,000 pr yr gets an increase of $400.00, $100 less than the actual cost-of-living increase. But a person making 200,000 pr yr gets an increase of 4000.00 ($3500 more than the actual increase). IOW, COLA is not a cost-of-living increase, but a cost-of-lifestyle increase.
The government isn't being funded as we speak. The debt continues to go up. Just because the government spends money doesn't mean it's justified or sustainable. If you could hire a contractor to remodel your kitchen at a competitive price or go down to the Federal Building and find a government department of remodeling, you would never choose that option. "Nonsense" isn't an argument. That's what they should be. There's more clarity that way. Otherwise it's an unending blank check. You would never pay for anything that way in your private life. The problem is as you've described. If everyone were to have to foot the bill for the government it would come to [$]42,000 a tax payer. That's too much and therefore the solution is for the government to spend less and in a more responsible manner. Like not spending another [$]3.5 trillion right now for "infrastructure". The police and fire department will still be taken care of by local property taxes. That's not where the national debt comes from. The problem with central planning is that you try to make an exception for everyone, one case at a time and it doesn't end up applying to everyone and you would be much better off just not having to make the exception in the first place. Just make a rule that any money that you are able to invest, whether that's in real estate, stocks, whatever is tax deferred until it is permanently taken out of the real estate market, stock market, etc. Go and buy some farmland as an investment and rent it out to a farmer. Later you decide that it's a better decision to sell that land. If you roll it into some other type of real estate you can use a 1031 exchange and defer taxes. If you decide to roll it into stocks instead, you can't defer it. If you put a little money at a time into a 401k you could defer it as an employee. If you are a non-working spouse you can defer funds based on some percentage of your working spouse. If you aren't working but don't have that spouse you can't defer funds under similar circumstances. If you have kids you get certain exemption, if you don't have kids you don't. In an attempt to include everyone you leave out many people. It's a chaotic way of running a government. In the farmland situation you can't defer taxes. It's easier to just not tax until it's out of an investment vehicle rather than try to legislate every exception. If you buy a house you have exceptions, if you rent you don't, if you pay cash you don't. The very same people who want to keep their capital gains exemptions on their personal houses when they sale don't want anyone else to be able to do that if they have non-residential property, there is an exception for your house that covers the entire gain if you live in the Mid-West (in effect) but if you live in a large coastal city the exemption isn't high enough but maybe it is if you are married but not if you are single. It's not a good system. It's like the argument that some made against "Obama care". They said you don't need it because the poor already have insurance since they can just go to the ER (although that doesn't cover cancer treatments) but it assumes that everyone else is working and has insurance though work. They don't. That also assumes that if you get caught in the cracks you just file for bankruptcy protection and if you have a house you still get to keep your house (you don't). It covers the first $10k but that's nothing so, as usual, you could be in the middle class, get sick, go to the hospital, leave with several hundred thousand in bills and lose your house. That's all because there are always large numbers that fall though the cracks when you legislate like this. The [$]3.5 trillion dollar infrastructure bill is the same way. Very few people (included the lawmakers) have even read the bill, there have been no open hearings, the push is just to hurry up and pass something. I've heard people talking about how it's needed because there are potholes in the streets in their towns (it won't go for that) or that we are behind the Japanese in modern airports and bullet trains (it's not going to pay for bullet trains or making your local airport more modern). This just isn't the way to run a government. Even the debt limit is a joke. We raise it every year. We should just change the law requiring the debt limit (while still addressing the debt problem). Even Social Security isn't being responsibly run. This should be funded by each employee for each employee rather than as a general fund that the government can abuse and then hope that the next generation of workers can pay for the current retirees. Social Security should never even have a chance of becoming insolvent. No company could run a pension plan like that (not that many still have pension plans). In the private sector and in your private life no one would put up with this level of incompetent behavior but we keep electing these people because they promise free money. Even given their past abysmal behavior we still think that they can do a better job with allocating our assets. It's ridiculous and we keep doing it because they always promise it's the other guy who will be taxed even though that never turns out to be the case (nor should it).[/QUOTE]
Going to divide this into two discussions: "how we pay for government" vs. "the government spends too much." I'll answer "how we pay for government" here, and "the government spends too much" in a different thread. That's the way INDIVIDUVAL government services work now. You pay fees to register your car, or to get a driver's license, or to get into a state park, or to rent a government facility. You pay taxes to pay for the common benefits we all get - military, the CDC, air traffic control, police, schools. It's not a blank check. The government spends as much money as you let them. Don't like their spending? Vote them out of office. They represent you. If everyone gets that exception (which they do) it's not an exception. That's what a 401k is. You can do that right now. Your purchase is not taxed - but the income you get from the property is. You can indeed. If you are running the property yourself and that's your job you can set up a solo 401k and put up to $18,000 a year from those rents into it tax free. If you have a separate job with its own 401k then you can't do that - because you can max out the 401k allowance via paycheck contributions alone. Google "solo 401k." The problem is that everyone - everyone - wants to avoid taxes. So if you say "well, invest however you like and we won't tax it" you will have people who use that general principle to pay zero taxes. Thus the need for restrictions on that, like those that constrain 401k's. Enron Exxon Valdez Centralia Buffalo Creek Flood Triangle Shirtwaist Company Bhopal So yes, people put up with it in the private sector. People put up with Enron for years even after some of its shady practices were revealed because they were making a ton of money on it. That's one of the problems that I will address in the other thread. But again, here I am talking about how to best obtain the money needed to run the government. You've said it should be less, and I agree. But even if we bring it down to some acceptable level, there is still a need to tax citizens to provide for the common defense and general welfare of the United States. (It's even in the Constitution.) Given that, a progressive tax is the least damaging way to do that, and causes the least amount of misery.
Those who work hard, improve their skills and achieve more are always in the minority so the promises of free money and taxing the other guy will always be a winner. Everyone doesn't get that exception and it is still obviously an exception. Were it not there would be no need for all these exceptions in the first place. If you are just renting the land out you aren't running the property and therefore can't put those funds in a tax deferred instrument. Even if you were you would still have to put small amounts at a time in. If you roll the funds into another property using a 1031 exchange it all goes in. If you roll it all into stocks, none of it is tax deferred. This makes no sense. No, the general rule would be investments are tax deferred whether it's real estate or stocks. Those aren't good reasons for the government being in charge of anything. We did without an income tax for a long time, enacted one, rates were low and then within a few years we had the highest marginal rates being taxed at 90%. That's what happens when you give children the keys to the candy store. I don't personally have any problem with a marginally progressive tax but that's just for show more than anything else. I have a problem when it "progresses" beyond reason. My main concern is just that government/politics isn't the solution to many problems. More problems are created by people trying to "fix" problems. You would think that the average person can't get ahead in the U.S. and that everyone/many people need Universal Basic Income, that you can't get a college education unless you are male, white and rich and that no one can afford a place to live anymore. That's just not the reality of the situation. I live in Seattle (expensive), I know of two people who just got married. Neither of them have more than a high school diploma, both are at best average regarding intelligence. Neither are particularly "motivated" They are both at an outdoor equipment manufacturer company (not REI). One is in shipping and one just started (little experience) in HR. They have two new cars, rent a house with an unobstructed view of the Sound, neither come from "money". Together they make about $100k/yr. It's true that the house isn't great and they just live paycheck to paycheck and never save. So this is almost a worst case scenario. This is truly a case of if they can do it anyone can do it. It's not some success story or a case of great motivation and drive. That's just not the narrative that anyone wants to hear these days.
Always the risk in a democracy. Nope. An exception is something (or someone) that is excluded from a general rule. No one is, so it's not an exception. Renting out the land makes you a landlord. Landlords run the property. You still can - up to [$]18,000 a year. Like I said, then everyone would put all their income into tax free "investments" whether or not they are retirement accounts, their Etrade account, their Amazon account or their bank account. Those are merely demonstrations of why for-profit companies would be even worse. Yep. Many people called those the golden years of America. Just as you don't want to hear about the average-intelligence person who just goes farther and farther into debt through no fault of their own. There are a million narratives out there, all different, all valid.
As always, we are off topic lol To your original question, Seattle - I think that most companies will likely only be profitable if they also share in social responsibilities. Most companies can’t merely put “some effort” into being an ethical employer, one that truly cares about the employees. Corporations are losing their employees because what most people have learned during this past year in dealing with Covid is that many employers will let them go in a heartbeat. Employers aren’t all that loyal anymore to their hard working employees, so now we see “the great resignation.” (Many reasons have been given for why so many people are leaving their jobs - but not trusting their employers anymore is one of them.) If you want to be profitable as a company, you need to treat employees with empathy, compassion and not as cogs in a wheel that can be easily replaced. Even Amazon had to change up their game. They’re allowing corporate staff to work full time from home, and they’ve bumped up the wages of those in the warehouses, offering benefits quickly after the onboarding process. Covid ushered in a new normal in terms of companies waking up to the disparity between the C-suite and the rest of the staff. An example - the CEO of Dollar Tree earned nearly $ 4 million in annual salary last year (close to $ 7 million in total compensation)- while those running the stores don’t make a living wage. So are these CEO’s wealthy because they took advantage of others? Possibly. I have nothing against capitalism in its purest sense, but Covid brought to light that many corporations are predatory capitalists. We have been fed the line as consumers “oh, if the minimum wage rate is raised then costs of goods will go up.” Is that just CEO-speak for “I won’t be able to make $7 million if I have to pay my employees more!” ? Hmm. Again, I’m not against free enterprise but I’m against employers keeping employees in poverty so they can amass more wealth. But, if employees refuse to accept that treatment anymore, it will affect profits. Covid ushered in a whole new era...
I just demonstrated a case where that's not true. Also if you know the tax code, just renting land out to someone doesn't qualify as you are stating. If it's for investment purposes, who cares. I just told you that proceeds from land can be rolled over via a 1031 but stocks can't. Those two should be comparable. No one gets further and further into debt though no fault of their own. People have to take responsibility for their actions, not the government. It's not the governments fault that you (generic) get into debt.
As a side note - not sure why, but sometimes when I use “$” - that sentence will become italicized. I don’t see it on my phone but on my laptop, it appears italicized. Please Register or Log in to view the hidden image!
That would be ideal. Unfortunately, that has not been borne out in practice. In general, the companies that make the most money (by whatever means necessary) will become the most profitable. Nike is a good example here of a company that is quite successful but has a poor history on human rights. They started in the 1970's and became very profitable in the 1980's, but didn't make any efforts to restrict child labor or slavery in their factories until 1991. Even then, their attitude was primarily "hey, we don't own the factories. We don't control what goes on there." (In Nike's case, eventually they DID pay more attention to their social responsibilities, but for years profited by ignoring them.) Yep, and I think that's one of the good results of the Great Resignation. Companies will, more than ever before, have to put together a valuable offer to employees to attract and retain people. "I can replace you in a second!" doesn't work any more. Usually not; usually that is true - they will have to raise their prices. But the lesson of Henry Ford is a good one. He paid far above factory wages for his assembly line workers. This had two effects. One is he got in much better people - skilled machinists and craftsmen - who were a boon to those early (i.e. not very automated) assembly lines. The second, more significant, effect was that his workers now made enough money to afford the cars they were building. Before that, only the very rich could afford a car. After Ford, the middle class could afford them - and he was creating a new middle class who used that money to buy Ford cars. A similar lesson is applicable today. Paying a waitress more means that menu prices will have to go up a bit. However, it also means that same waitress can eat out more often, increasing profitability of the restaurant industry in that area. That's good for business.
The "$" problem is with this site. It's a control character. I just do as you just did and surround it with quotes or some other characters or I just spell out 20 dollars.
That’s just it, I actually didn’t change anything. I posted the “$” sign in front of the numbers and then it morphed into one, long italicized word, leaving off the dollar sign. Paranormal activity right here on sci-forums? ^_^
Good companies have always been better off when they've treated their employees well. Some do and many don't. Lack of loyalty to employees was common way before Covid. I agree that Covid is a game changer because it gave a shove in the right direction to many employees who were complacent for too long. Now that they have had a taste of "freedom" many will make other choices and won't go back to the worst employment situations. I did that 20 years ago. Most corporate life gets old quickly. Regarding what the CEO makes, I disagree somewhat with your logic. Boards determine CEO pay and that is largely a matter of competition among the CEO ranks (what other companies pay). The shareholders aren't going to pay more than is justified. It's not a matter of a CEO taking less pay so that his 100,000 employees get paid more. His/her pay is largely in stock anyway so it has little to do with other employee compensation. If it is too high, it's mainly a concern for shareholders. Other employees' compensation is also largely dependent on the market of other similarly skilled people. You have a job in marketing (I believe). Your salary isn't determined as a fraction of what the CEO makes. It's determined by what other marketers make in comparable job/industries. If profits are high very few companies say let's just pay our employees more. Sometimes that happens where there are profit sharing arrangements but it's largely irrelevant. Profits are invested back into the company (retained earnings) or they get paid out to shareholders. Conversely when profits are low or when there are losses, employees aren't paid less. Some may be laid off but oftentimes the company just takes the hit for short periods of time.
I think that ghosts of the past (all the people who have been banned here) are casting a spell over this site and affecting sentences with an italicized word protest. I don't know how it works but there is a lot that we don't understand yet and anyway science has been wrong in the past, amiright!
That's a legal requirement - a capitalist corporation is legally forbidden to act against the interests of its capital investment. And that's why any country hoping to establish a capitalist free-market economy must regulate and curb its capitalist corporations - they will destroy any society that allows them to make money by doing so. Bad companies have not. Bad companies often make higher short term profits for their investors by abusing their employees and communities and contractors and surrounding landscapes, and they regard that as being better off by definition. The shareholders don't set the wages, and have no idea how "justified" they are. Unless prevented by regulation the CEOs sit on each others' Boards and collude to drive up CEO compensation - "competition" among the "CEO ranks" (whatever the hell they are supposed to be) plays almost no role. If CEO compensation were set by competition (if the job were, for example, auctioned in a free market) it would on average rise and fall according to the productivity gains and market values and expected return on investment of the managed corporations - and we would be able to see that happen, as poorly performing companies would feature low paid CEOs, and overall CEO compensation would track the overall performance of the corporate economy that paid it. Needless to say, "golden parachutes" would be silly myths rather than industry standards - perhaps not as easy to see, because it is intentionally hidden and denied by the corporate authoritarian right, is that companies that made no profits and paid no return on investment and eventually failed to provide goods and services as promised would have very low paid CEOs - guys like Michael Eisner and Donald Trump would have to get jobs they could handle, such as parking cars for some big hotel or entertainment complex. The guy who posted that claims to be educated in the field of economics. You can't make this shit up.
Sure they are. That's what union busting was all about. Likewise "downsizing". Likewise cashing out when Walmart moves in next door and staffs with part time (lower compensation) employees. Likewise every ostensible "raise" that does not cover the increase in an employee's cost of living, justified as necessary due to narrow profit margins or industry losses. Fact-checking does an observation make - or two, or twelve. Try it sometime. It might save you from some of those posts - such as the ones in which you label simple lists of facts "sarcasm" after dozens of pages of denying the presence of a sense of humor.
