This Year's US Economics Nobel Winner: Bush Tax Cuts Too Small

[Jaguar]

Imran

[chequita guevara]

Originally posted by Imran Siddiqui
If the perception is that their work hour is worth less because of the higher taxes, people will be less productive (ie, be there just to be there) and only work 'enough'. However, if taxes go down, each hour is worth more, and people will be more inclined to work more because they will make more money with each hour.

This isn't really true. When you make less, each dollar you make becomes more precious. When you make more, you can afford to take more time off.

[Jaguar]

You take that time off when you retire, not when you are able to earn a lot of money quickly.

[chequita guevara]

You don't know many programmers, I guess.

[Imran Siddiqui]

This isn't really true. When you make less, each dollar you make becomes more precious. When you make more, you can afford to take more time off.

Which I've said isn't true . When taxes go down people work more because each hour is worth more. You can also see the effect on income. A lot of people will work more hours as their income increases to take advantage. One explanation offered for the differing work hour rates between Western countries, such as US and France or Britain and Canada is that those countries with greater work hour rates have lower taxes, therefore those hours are worth more and create more benefit. Greater taxes render those hours worth less and create less benefit for working another hour.

[DanS]

In the late 90s, as the economy was doing well, people were cutting back slightly on hours worked (basically through less participation in the labor market). Some of that probably was that people -- particularly families -- could now afford to work on one income.

But throughout that period, because of tax bracket creep, tax rates were being raised. By the end of Clinton's term, taxes as a percentage of the economy were at historic highs. I think this is no coincidence.

[Imran Siddiqui]

Originally posted by Jaguar
You take that time off when you retire, not when you are able to earn a lot of money quickly.

That's why many business people, lawyers, and doctors will work 60 hours (at least) during most of their professional careers. Their work hours are worth more than those that make less.

[Ned]

Originally posted by chegitz guevara


I don't know about you, but fear of homelessness and losing all my stuff is what motivates me to work. All a tax cut means is I don't have to work as much, because I'll take home the same pay for less work. Tax cuts promote laziness. If you want to promote work, you should take away enough money in taxes that people have to work three jobs just to stay in a freezing shack.

Interesting Che. I wondered why it takes the average Cuban to work three jobs to get by on subsistance.

[Ned]

Well, how do you guys feel about Kerry's denunciation of Bush for unbalancing the budget during a time of recession. The implication, of course, is that Kerry would run a balanced budget while he economy was tanking.

[Fake Boris]

Originally posted by Ned


Interesting Che. I wondered why it takes the average Cuban to work three jobs to get by on subsistance.

People in Cuba don't work a lot.

[Fake Boris]

Originally posted by Imran Siddiqui
Which I've said isn't true . When taxes go down people work more because each hour is worth more. You can also see the effect on income. A lot of people will work more hours as their income increases to take advantage. One explanation offered for the differing work hour rates between Western countries, such as US and France or Britain and Canada is that those countries with greater work hour rates have lower taxes, therefore those hours are worth more and create more benefit. Greater taxes render those hours worth less and create less benefit for working another hour.

I doubt it's fair to include France in this comparison because they've got strict laws regarding people who work more than 35 hours.

We would need to see the source directly, but I suspect that something that could have a huge effect on work hours is overtime regulation. In Canada the law requires that any hour over 40 be paid 50% more (and even more when you reach 50 hours IIRC). Is there anything like this in America?

[Ned]

Originally posted by Oncle Boris


People in Cuba don't work a lot.

Really. Then that report I saw on TV was a lie?

[Imran Siddiqui]

Yes, the law is 150% pay for over 40 hours for workers. But management do not have to get overtime. Therefore, lawyers in large firms work 60, 70, 80 hours a week.

[Fake Boris]

Originally posted by Ned


Really. Then that report I saw on TV was a lie?

That wouldn't be the first time anti-Castro propaganda is aired on American channels. Most people in Cuba have normal weeks. Those who work in hotels have long shifts but they really make a lot of money with the tips so they probably keep the job anyway.

[Jaguar]

Ah, so because they make more money, they work more?


Own goal!