Short(ish) humor diary about a conservative article of faith regarding finance and business.
So. The fairly common thinking on the right side of the aisle is that if you lower tax rates but increase the number of taxed transactions (since more money is in the market 'cos people pay less taxes), the government actually will bring in more total revenue. Right? Not saying, "Is this correct," but "Do I correctly understand this economic theory."
No really, I think that's it. Please correct me if I have it wrong.
Okay, so let's talk about (dun dun DUNNN) a minimum wage (audience gasps in horror).
No wait, stay with me, ok? This is funny. At least it's funny if I have this right.
So here's my thinking. If business across the country raise their minimum wage, they're injecting more money into the market directly. I mean, right? Higher minimum pay across the entire marketplace means more people have more money in their pocket. It can't not, can it? And people having more money means people spending more money. At least if we're talking about the lower tiers of the socioeconomic strata in America. Again, right?
You see where I'm going, but let's go ahead and walk down the path.
So - the common conservative objection to raising the minimum wage is that businesses will make less money. No? Butbutbut... wait, won't government make more revenue if it collects a lower amount of tax on a larger number of transactions? Isn't that the accepted thinking?
So what the fnord?
If government makes more total money on lower per-transaction income but a larger number of transactions, why in the name of sweet sainted FUCK won't the same thing happen with businesses? Even if they make a little less profit per transaction due to paying a higher wage, won't they more than make it up with a larger number of total transactions, since the consumers have more money to spend?
Is there some kind of "it only works for the government" clause in this thinking that I'm not understanding here? Why and how does government automagically make more money with more money in the marketplace, but businesses (which are supposed to be ultra-savvy at making money anyway, 'mirite?) do worse with more money in the marketplace?
Somebody explain it to me. }:^(
(Maybe I didn't do the funny right. It's the apparent contradiction. Does that part at least make sense?)