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PaperclipPerfector  10d ago (text post)   33127 thread views

Culture War Roundup for the week of September 9, 2024

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"A working class hero is something to be / If you want to be a hero well just follow me"

Trump made an interesting proposal recently to end taxes on overtime wages. I think this proposal is a non-starter for practical reasons, but is still directionally correct. Ending taxes on overtime wages is intended to help the working class. And the working class in America are not being given a fair shake. Our society feels as if it is run for the benefit of retirees and people with fake email jobs. We need to take action to rectify this.

Despite what some people may say, blue collar work is awful. It pays little, it's hard on your body, it's often hourly (so no pay when you take off to go to the dentist), the benefits are typically bad, etc.. While some people can get rich by operating a business providing blue collar services, this is an extremely hard and frustrating path. Is it any wonder that young people only want white collar jobs?

The Democratic Party solution for this is of course more welfare for the working poor. I think this policy is deeply destructive as it disincentives labor, and creates a captive class who are dependent on the government to live. (This might be a feature, not a bug, to some Democrats who envision a permanent ruling majority).

But I think a more constructive way forward is to increase the value of blue collar work. Tariffs help with this, even if they reduce overall prosperity. This overtime proposal is interesting since it only rewards people who are already working more than 40 hours a week. And it will, of course, hit mostly blue collar workers.

And, with that, the party alignment feels complete. Trump is winning among blue collar workers by nearly 20 points, and losing among white collar workers by similar margins. Democrats are promising subsidies for white collar workers such as student loan forgiveness. Trump is promising to reward his own base. Personally, if we're buying votes, I think Trump's proposals are better.

Not that ambitious but it isn't a bad idea to help blue collar workers. However, a greater focus must be on the goverment,NGO,cheap labor/welfare complex.

Where NGOs funded by the goverment who marched in the goverment and where likeminded ideologues have influence, promote mass migration for antiwhite and for economic corruption, parasitism reasons.

These NGOs are funded by the goverment and also get funds to give to groups like the Haitians.

Then a company hires them at very low wages because they are subsidized by the American tax payer. And these people then or smarter ones like Indian migrants, beneefit from racial discrimination policies in their favor that the goverment and corporate America follows.

While the general governance and media environment enables it, which isn't surprising when ADL brags about how it trains all FBI agents.

But in addition to ideology, there are people who make money from this at expense of society and are part of a woke industry.

The private public parternship model, is a model of creating a woke corrupt society of massive theft of wealth, to those implementing this system and part of the industry and the favored client groups at expense of the native people.

Dissolving those NGOs, supposed "charities" and prosecuting them for this, and firing those from the bureaucracy who are aligned with this will help blue collar American workers more and will also as a bonus reduce the debt. And of course, fines, prosecution of people enforcing DEI, and investigating institutions, to stop them from doing so. A facet of DEI programs is also preferring newer migrants over native Americans. Really, doing this is less of pandering towards the base, and more enforcing the law and the greater good, and the duty of any leader.

Indeed, give zero welfare to foreigners (an idea might be to make it a requirement of having two grandparents born in the country to be eligible to welfare) and companies no longer benefit by having the American taxpayer pay the economic externialities of cheap labor. This will result in increase of automation in some industries. Deportations which Trump advocates can be part of this and can expand to greater categories that came where they shouldn't have, and their prescence has been of a mixture of ideological anti native mass migration agenda, and corruption of the networks I mentioned. Or not exclusive enough categories like with some family reunification policies. Sure there can be some debate on this, but mass migration promoted by oikophobes and such networks is not sacred. Like they can bring people, the same people can be send back in their own homelands.

Net Migration should be net negative for quite a while, with more people being repatriated than coming in. All of the above will help raise the wages of labor and benefit workers, and also promote their national, cultural interest to live in their own communities, not as threatened second class alienated minority in their own homeland, nor suffer under crime increases. Moreover it will help bring closer the migrants will remain with the native people, under an understanding that the social contract of migrants includes respecting the native people and their collective interests as a group, which is also the interests of each individual of said group. It will also incentivize and must come along with pro family formation policies, but the content of those are for other discussions.

It will also counter the effect that you mentioned of a Democrat permanent majority which is pandering to foreigners voting for far left policies to increasingly redistribute resources, and positions in their favor.

The above suggestions will both help blue collar workers in various ways, improve economic efficiency by stopping DEI and their institutional enforcers and general supporters, and also reduce the deficit.

Moreover, since it will help more than blue collar workers, and is a more ambitious proposal that have clear winners and losers, (and the losers already oppose the right), it will more greatly incentivize the winners to support the right, because they will be afraid of this not continuing and things reversing. The Democrats more aggressive moves while republicans either in a combo a) compromised and collaborated while pretending to oppose it b) some opposed it but not with enough fervor c) others neither collaborated nor opposed it, helped the Democrats electorally.

Removing the enforcers of oikophobic ideology progressive intersectionality from power, will improve enthusiasm for policies in opposition to corrupt, oikophobic, anti-white policy, some of which involves plausibly crimes. It will remove the fear of presumption of guilt of the opposition, and impose a fear of guilt towards the oikophobes. Which is right, because the agenda to replace a people by having the goverment steal from them, preffer the foreigner, to make the native people a hated minority is genuinely an immoral destructive policy that could be fairly be described in worse terms than that. What is politically correct and politically incorrect can change and it will be the biggest benefit electorally for the right and its base to focus on doing this. Add to that those who will be deported and stop coming who tend to support those oikophobic policies in their favor. So if the republicans follow my suggestions, it would result in a greater % of the public supporting the republican party. Albeit, some of the suggestions will inspire greater backlash and can come or while changing the oikophobic environment while in power. Opposing the NGO-public-private partnership woke capitalism, pro mass migration, pro DIE, complex, can be pushed hard from day one and will help Trump get elected, in addition to the message he is promoting now in favor of deportations.

Modern states have more than enough the state capacity to do this. Even Muslim countries deport large numbers of foreigners that share their religion. https://www.yahoo.com/news/iran-deport-two-million-afghans-155252446.html?guccounter=1

This overtime proposal is interesting since it only rewards people who are already working more than 40 hours a week. And it will, of course, hit mostly blue collar workers.

My guess is that the median overtime hour worked may well be by some minimum wage worker struggling to make ends meet, but the median dollar earned through overtime is earned by some doctor or lawyer.

Let's face it, the single mum working three different shit jobs to feed her family is not going to pay a lot of taxes -- nor should she. Tax cuts benefit the people who are in the higher tax brackets, i.e. the well-off.

I think the major tax the single mum will pay is payroll taxes, which amount to 15.3% of your income up to $168k with no deductions possible.

Yes, poor people pay virtually no income tax. Payroll taxes dominate at that level.

Doctors and lawyers are salaried, not hourly, right?

They are typically hourly, but are overtime exempt under FLSA standards. So if they get paid overtime, that’s on their employers.

If the proposal exempts OT from FICA, then that’s big.

Lowering taxes at all is bad on its face since the government needs more taxes and less spending. It's worrying that neither side really cares about ballooning debt, since it will almost certainly have a far bigger impact on the lives of regular Americans than something like climate change ever will in our lifetimes.

Poor people have been doing pretty well recently, actually. The Gini coefficient has been flat or declining for the past several decades (in FRED's most recent data for 2021 it was lower than any year since 1992). Also, if you want greater incentives for work, bolster the EITC.

I don't buy the notion that blue collar work is uniquely awful. It might be tough on the body, but it also has a relatively lower barrier to entry, and some people outright prefer it. How does capitalism balance the upsides and downsides? With a little tool called "market wages". If blue collar work is so bad, why don't blue collar workers just sign up to get those supposedly worthless, trivial desk jobs? Your argument feels like the right-wing equivalent of "women are only paid 77 cents for every dollar a man earns".

I agree that most/all of these proposals seem unwise. We need to tax the poor more and cut spending harshly, particularly the insidious "refundable tax credits" that have really caught on lately.

That said, people mostly complain about "fake email jobs" that are in government, or are government facing. These jobs require credentials that are typically not actually market based but mandated or "mandated". So saying they exist in a market is kinda false.

I don't really think raising taxes on the poor exclusively is a great idea. While the poor have been doing alright recently, I'd say that's generally a good thing given the US's gini coefficient is generally higher than other OECD countries. Letting most parts of the Trump Tax Cuts expire would be a good start. Also, slashing all refundable tax credits seems unwise, given that the EITC qualifies as one according to my Google searches, and it's one of the best redistribution programs that exist. Economists across the ideological spectrum generally rate it pretty highly.

The credentials issue of jobs generally is certainly an issue, but for reasons of zero sum signaling competition rather than... the fact that people work at a desk.

It is a spending problem; not a taxing problem.

Spending more than you tax just hides the tax in inflation! Trump's tax cut just arbitrarily redistributes from the kind of workers who don't take overtime to the kind who do. This is silly. But it, like 'no taxes on tips', is a gimmick that appeals to voters in a way that 'i will lower your taxes by 2.73%' doesn't.

Progressives would say the opposite. Any realistic scenario getting the US back to fiscal prudence will involve both.

There's no realistic scenario for that. Americans would have to give up attempts at world hegemony and lower welfare while increasing taxation.

Either is politically impossible.

The US did it in the 90's so I see no reason why it'd be impossible.

Because US thought they had no competition. If you proposed lowering defense budgets now you'd be called a traitor selling out global freedom to the Chinese.

Progressives who don't admit that spending needs to be brought to at least stratospheric rather than deep-space levels are simply economically illiterate. Realistically it's more or less impossible to solve the entitlements issue without raising taxes(in the first place, eliminating the social security tax on contributions), and so we need to do both. But hard right budgets usually can balance out without tax increases, they're just pure fantasia politically.

I don't buy the notion that blue collar work is uniquely awful. It might be tough on the body, but it also has a relatively lower barrier to entry, and some people outright prefer it.

This is specifically a handout to skilled labor- lower skilled labor isn't allowed to work overtime, it's too expensive relative to the value they produce. And skilled labor is not uniquely awful but does not have a lower barrier to entry, although it mostly has a cheaper one(3 years of crap work on the construction side vs a four year degree). It might be socially disprefered but it's not the terrible deal some like to paint it as, just a different set of trade offs.

Remind me to post about the new "training" requirements dem states are imposing on blue collar workers that used to run on apprenticeship+ license testing. You can probably already imagine what they are and the motivations for them.

Very soon going into skilled labor will be as locked down as going to college.

It’s not just blue states…

I'd be very interested in that. I have an interest in the shipbuilding industry, which as far as I'm aware is currently having the devil's own time with staffing for the Trades, and is in three main locations: New England (Dem), Gulf Coast (Rep), and Norfolk (I don't know if Virginia qualifies as Dem or not).

They avoided it when possible, but managers at the McDonald’s where I worked in high school would still schedule me above forty hours when their options were limited. Bummer would find many other teenage workers away on vacation with their families, and not everyone was trained to work every position.

Also that 1.5X multiplier was amazing for me at the time, and I’d jump at any opportunity for it.

If blue collar work is so bad, why don't blue collar workers just sign up to get those supposedly worthless, trivial desk jobs?

Because they lack connections to centers of powers. Sinecures are not awarded to just anyone.

More specifically, credentialism makes it more difficult for people without rich parents to get fake email jobs.

This is in fact the systemic racism / white privilege argument, and I would have to agree - many whites, irrespective of actual ability or intellect, are awarded sinecures by their rich parents, or by others simply based on the color of their skin and (unjustifiably) presumed superiority to visible minorities.

If you are white and still pulling pints and polishing off bartops then you have squandered your privilege by acquiring credentials of no value whatsoever (if any at all) or are so utterly bereft of merit that not even your systemic advantages and headstart on life can save you.

That white people are being promoted based on the color of their skin and presumed superiority to minorities has been generally false for multiple decades now. Just the opposite is true. Obviously, some white people (and some, but fewer, minorities) do indeed receive sinecures from their rich parents. The vast majority do not.

While it's true that black people in American are much less privileged than whites on average, we have the technology to look past skin color. Sasha Obama is a million times more privileged than Eminem.

Your argument is gross and racist.

gross and racist

Not constructive, whether it’s genuine or parody.

The truth is that half the population is sub 100 IQ and many are well below that, and they can struggle with the basic verbal and spatial skills required in the majority of white collar jobs, even ‘fake email jobs’. Take an iconic fake email job like a product marketing manager at a FAANG, the reality of it still requires an above average intelligence even if they’re only working a few hours a day.

FAANG is like the Ivy League of the real world. They are going to get top employees.

But there are lots of fake email jobs that are not FAANG. Take, for example, the 10% of the private sector that works at nonprofits (up from approximately 0% in 1960). Many of them are quite stupid indeed. As time goes on, the average IQ of the college graduate continues to fall, and today is not much above the population-wide average. And, of course, stupid people struggle at blue collar professions at well.

I think it takes more intelligence to be a good HVAC repairman than it does to shuffle papers back and forth at a non-profit.

Take, for example, the 10% of the private sector that works at nonprofits (up from approximately 0% in 1960). Many of them are quite stupid indeed.

Most employees of non-profits are employed by large service-providing non-profits with the largest single group being universities and university hospital systems. I don't think that academics and healthcare workers are "quite stupid indeed". The annoying wowzer subset of nonprofits is a lot less than 10% of employees.

I think it takes more intelligence to be a good HVAC repairman than it does to shuffle papers back and forth at a non-profit.

This might be true(I have no idea how smart you have to be to do non-profit work), but you don't have to be a good HVAC repairman to make a living. You don't, in point of fact, have to be a good HVAC repairman to make near the top of compensation for HVAC techs- many 'techs' are more realistically sales guys who are paid ~$20/hr plus 10% commission on all equipment sold to the customer through leads they generate, and HVAC companies commonly charge 400%+ markup on new systems. Installers make $15-$20/hr and get hired right out of the probation office, so it's an extremely profitable racket all around.

The key to a residential AC guy making his boat payment is, counterintuitively, to not fix very many air conditioners.

Because they lack connections to centers of powers.

This strains credulity when juxtaposed with reality. I got a desk job with no connections, as did most of my friends + acquaintances in my graduating class.

credentialism makes it more difficult for people without rich parents to get fake email jobs.

I'm slightly more sympathetic to this argument, but still find it unconvincing. State schools aren't that expensive especially to genuinely poor individuals who can apply for all kinds of scholarships. There's also online options that are very cheap, e.g. I'm finishing up a masters in CS that only cost about $6K total, of which I paid around $1k

This strains credulity when juxtaposed with reality.

A better way of saying this would be simply "I disagree".

I've dug ditches and worked in finance. This isn't the issue. Credentialism isn't what is stopping diggers from working fake email jobs.

Credentialism isn't what is stopping diggers from working fake email jobs.

IMO "fake email jobs" is a bit of a Russell's conjugation: "I have an important role keeping [industry] moving, you work remote as a middle-manager, and that guy over there has a fake email job." Not to say that all such jobs are useful, but I'd bet there'd be a fair bit of disagreement about whether any specific role qualified. People often don't have good visibility into what other departments are doing, and I'd bet nobody considers their job this way, but absolutely does sneer at, say, the accounting department ("it's all just a spreadsheet anyway") or purchasing.

This overtime proposal is interesting since it only rewards people who are already working more than 40 hours a week.

Policies like this always take too static/naive of a world view. You imagine how people currently behave, and This rewards people who are "working" more than 40 hours a week after all of the employers and employees update their behavior to exploit the new system. Instead of offering a 40 hour week at $20 an hour, companies can offer $10 an hour for 40 hours and then with 10 $30/hour "overtime hours" of make-work to make up the difference. Maybe they'll have people be "on call" so it counts as overtime but doesn't actually add work.

And then the salaried people will all want to be "hourly" so they can get two thirds of their pay count as "overtime". Your $80k/yr Secretary and your $300k/yr chief engineer are going to become hourly employees whose total yearly pay just happens to coincidentally always adds up to approximately $80k and $300k respectively, but technically half of it is overtime. A lot of the more highly paid people already work more than 40 hours per week anyway, so it wouldn't be too hard for the business to fudge the values around and count their pay as overtime. And for the people who don't, again I'm sure the business could just make make-work for them to technically count as overtime, while shuffling the numbers around to keep their total pay the same, or even less, since if the employee is paying less taxes their effective pay is higher even at a lower nominal value. And that's why the companies would go through the effort of doing this. Why pay $60k for an employee when you can pay $50k to one who gets to evade taxes via loopholes?

I get the sentiment of wanting to pay blue collar workers more in a way that doesn't enable welfare leeches. But this isn't the way to do it without some serious modifications to fix the incentive structure.

What's wrong with any of these incentives either politically or in the absolute? It rewards Trump's friends and punishes his ennemies by transferring ressources away from state administration managers and into individual lower class people's hands.

It's good politics at it's most obvious. Raises up your voting base, sounds good at a glance (everybody likes lower taxes) and doesn't cost you much because everyone in the race is running on deficit spending.

Hell you can even spin this as equalizing worker relations. In the world of mostly overtime, you can strike without striking by just doing the minimum your contract requires.

What's wrong with any of these incentives either politically or in the absolute? It rewards Trump's friends and punishes his ennemies by transferring ressources away from state administration managers and into individual lower class people's hands.

Yes, in the sense that it is a creative tax cut, for eventually, just about everyone. Unfortunately we don't really need tax cuts until we get spending cuts or inflation will continue.

The problem with that is that we haven’t had a significant spending cut in the modern era. Unless we get a real balanced budget amendment to the constitution (which won’t happen) budgets won’t go down. So then there can’t be tax cuts, basically ever, because the state is going to need every penny.

My point is that this will reward upper class people more than lower class people. The correlation between "overtime hours worked" and "lower class people" has no reason to persist under the paradigm. Upper class people have more leverage to negotiate with their employers for overtime shenanigans, more institutional savvy and networking to figure out that this is a loophole that exists and is worth exploiting, and higher tax brackets that make it more profitable to avoid. John Manager who is a pencil pusher earning $200k/yr working 60 hour per week is going to benefit from this, while Billy Bob who struggles to get by working 20 hours each at three different part time jobs gets nothing, because none will hire him full time and have to pay benefits. This is a regressive tax relief, and then the government has less tax revenue and either has to raise taxes elsewhere to make up the difference, or cut spending. And if you were going to do that you'd be better off with a flat income tax reduction across the board, or if you still want to cater to working class then a tax reduction to lower income tiers.

This is probably good politics because it superficially sounds like it helps working class people, because a lot of them work overtime right now and their bosses are salaried. Lots of things sound good if you only look at immediate. first order effects and ignore long term second order effects. Printing free money to hand out as stimulus during Covid while all the supply chains shut down superficially sounds like it would help too, and yet here we are.

Overtime is not really optional in the US labor market.

You’re acting like individual income tax avoidance is a bad thing? Just like Trump’s proposed tax incentive on tips, this too would benefit blue-collar and service sector workers. Maybe we should be advocating policies that place a greater proportional tax burden on those who society caters to already: corporations and white-collar PMCs?

This isn’t the first time that politics has created tax incentives for employers based on hours worked, either. Remember that the Affordable Care Act’s large employer mandate kicks in for “full-time” employees who work 30 or more hours per week? Take this with a huge grain of bias, but the Cato Institute in 2023 found that there was a minor effect in reducing FTEs due to the employer mandate.:

[w]e estimated that the ACA increased low-hours, involuntary parttime employment by 2–3 percentage points, or 500,000 to 1 million workers, in retail, accommodations, and food services—the sectors where employers are most likely to reduce hours if they choose to circumvent the mandate.

Maybe we should be advocating policies that place a greater proportional tax burden on those who society caters to already: corporations and white-collar PMCs?

There's already a much easier way to do this: Increase marginal rates on higher earners. This comes with the added benefit of actually increasing government revenue and not decreasing it.

Maybe we should be advocating policies that place a greater proportional tax burden on those who society caters to already: corporations and white-collar PMCs?

Here in the real world, white-collar PMCs are already shouldering an absolutely massive share of the tax burden. The top 10% make about 50% of the income and pay about 70% of the taxes; the top 25% make about 70% of the income and pay about 85% of the taxes.

"The only tax analyzed here is the federal individual income tax, which is responsible for more than 25 percent of the nation’s taxes paid (at all levels of government). Federal income taxes are much more progressive than federal payroll taxes, which are responsible for about 20 percent of all taxes paid (at all levels of government) and are more progressive than most state and local taxes."

Yes, and? It's Federal Income Tax we're talking about here. Including payroll taxes makes it less progressive but the upper 25% is STILL paying the lion's share. State and local taxes are irrelevant.

Trump is winning among blue collar workers by nearly 20 points,

That's quite a stark contrast from the traditional Democrat playbook. IIRC Obama always polled well with blue-collar workers.

Our society feels as if it is run for the benefit of retirees and people with fake email jobs.

Hi, I'm one of those people with a fake email job (software engineering.) You do understand that offices could easily shift to paying their employees hourly, right? I already track hours. CEOs work a massive amount of "overtime" too. Who's going to tell them that golfing with their business partners isn't a business meeting? They can just shift their stock compensation to income instead. "No taxes on overtime time" alone or in conjunction with "no taxes on tips" is effectively just a massive, widespread reduction on income taxes for everyone who's not a public servant.

If your goal is to destroy the public sector, balloon the deficit, and justify cuts to every type of welfare-- well, I admire the elegance of your murder weapon. But at least be honest about it. This isn't a proposal to "help blue collar workers." It's a proposal to kill medicare, social security, and medicaid all at the same time.

And for the record, I 100% believe Kamala Harris is going to end up saying something similar, just like she copied trump's homework on the "no taxes on overtime" thing. The only difference is, she'll also impose punitive wealth taxes and maybe a VAT to continue funding our existing welfare state. It's a truly no-win scenario.

I'm one of those people with a fake email job (software engineering.)

Nah, you're making things. That so doesn't count.

You may not have the slightest idea how far the depths of pointlessness can go. I have witnessed entire departments, nay, entire building floors, paid to pass around information that was completely useless to anybody.

And that's the best case scenario, some people's job is actually to actively make everybody else less productive. As sometimes required by law.

If you're actually producing anything concrete that isn't just emails and meetings where no decision that affects the bottom line is taken, you are far, far away from what the essence of the fake email job. Self doubt about the purpose of what you're doing notwithstanding.

Passing around information is what software engineers do. And more importantly, I'm under no impression that the value of my work is correlated to how long I work is correlated to how much I get paid. And yet it would be trivial accounting-wise to turn me into an hourly instead of salaried worker, and the same is true for the rest of the bullshit-email-job cadre. The business doesn't even need to pay me any more money on net; in fact they could pay me less and it would still be worth it looking at total post-tax compensation.

This kind of job is hard to fit in an hourly scheme, though. Do I go submit my time card with the random times I spent solving problems in my head while showering, walking my dog, etc.?

And if so, how do we prevent trivially easy abuses?

Maybe lawyers can provide an example? ChatGPT tells me they don’t typically bill for time spent purely in thought, but rather only for time spent drafting briefs, meeting clients, etc.

But for software engineers the time spent actually writing code is typically dwarfed by the time spent deciding what you actually need to write. This is how you can have an immensely productive hunt and peck typist on staff. WPM is not the bottleneck.

We bill for time thinking.

This kind of job is hard to fit in an hourly scheme, though. Do I go submit my time card with the random times I spent solving problems in my head while showering, walking my dog, etc.?

This is a solved problem. If you're getting paid hourly and there's no good way to discriminate non-work time from work-time you just claim as much time as you think your bosses and a court of law would let you get away with because that's what you're incentivized to do. If they can't accurately correlate your level of output to your hours worked that's a them problem.

And if so, how do we prevent trivially easy abuses?

You don't. Abuse is the point. There's no possible way to segregate between "legitimate" hourly work and "illegitimate" hourly work without massively expanding the regulatory state... which of course would lead to regulatory capture that would favor all the people favored by the current system anyways.

"No tax on overtime" is transparently the sort of populist bullshit that succeeds as messaging but is is totally unworkable as a policy proposal. It's a way for trump to tell blue-collar workers that he's their guy without having to actually promise workable policy. When he tries to pass this and it fails his base will blame congress instead of him, and then content themselves despite a complete lack of further advancement. Just like his "build the wall" spiel.

I have known a few white collar engineering types who have told me they're paid (well) hourly. I assume it's just a bookkeeping thing, but I believe they may have been in states that mandate overtime hourly pay anyway. I don't think it'd take a huge incentive to make that more universal.

Reducing taxes on blue collar work doesn't increase it's value, though it does reduce its price. The working of the market should result in wages falling as a result, though various distortions like minimum wage and required time-and-a-half may change that. Sans gaming, the undesirable consequence I'd be most sure of is that hiring fewer employees and working them longer would become even more popular than it already is, both among employees (the ones still working) and employers.

If this proposal were to pass (and I give it a big fat zero chance), gaming would of course be extreme. Give me a contract that guarantees me 41 hours a week and pays me almost all the money in the 41st hour please.

Both Harris's proposals and Trump's are absolutely terrible this time around. Tariffs are bad, tax-free tips are stupid, and this tax-free overtime idea would be be a horror show of distortion and revenue loss if passed, which it won't be. On the other side, Harris's increased tax proposals and unrealized gains tax are terrible and have a better chance of being passed. Price controls are even worse and perhaps like Nixon she could do them by executive order. So Harris is still worse but Trump is closing that gap.

The sorts of people who are paid hourly are, in aggregate, not good enough at math to accept the system being gamed for their benefit. A few CEO's and accountants figuring out how to game it is probably a minor effect, mostly on tax revenue.

No its probably huge because it would also affect payroll tax, which the company pays right upfront. Companies not figuring it out would be giving up a 6-12% margin on costs. Thats bankruptcy level uncompetitiveness in almost every industry.

The sort of people who are paid a salary, and the sort of people who pay salaries, are in aggregate good enough at math to game the system for their own benefit by switching to hourly pay.

gaming would of course be extreme. Give me a contract that guarantees me 41 hours a week and pays me almost all the money in the 41st hour please.

I don't think there would be any more gaming than on any other tax change of that sort. Claiming to not be paid for the first 40 hours is convoluted, and besides, lawmakers aren't total morons and usually close such simple holes in the laws they write.

Don't you have such tax exemptions for night work, sunday work, overtime work in the US? They are very common in Europe - Sarkozy passed one (winning campaign slogan: "work more to earn more"). So did Hitler, and it held up.

Economically, the argument’s pretty straightforward. Why favour the hard-worker over the smart-worker? You can’t really entice workers to be more productive, but you can entice them to work more. So this is better for GDP.

Politically, people think it’s fairer to be rewarded for conscentiousness than intelligence. You could sell it as industrial policy, onshoring. You need more people in factories doing dumb stuff for long hours if you want to compete with china.

Don't you have such tax exemptions for night work, sunday work, overtime work in the US?

No. The night exemption seems especially bizarre to me. Why should income earned at night be any less taxed than income earned during the day?

For my father's long-time job the differentials were 2x for Saturday work and 3x for Sunday or holiday work. In my previous federal government job (~30 years ago) there was a shift differential of 10% for second (16:00-00:00) or third (00:00-08:00) shifts. I worked second shift which was quite acceptable for a young single guy.

At one point post-war euros were struggling to encourage 2nd shift factory work. Maybe it's a holdover from that.

Edit: and not-post-war too, re. Hitler. I remember hearing a lot of German factories were running one shift even during the war. Admittedly probably half due to material shortages and supply chain problems, but they could have been doing some extra labour substitution.

Yeah, it does seem like this overtime suggestion is pretty stupid all around.

In regards to tariffs, why do you think they are bad? Yes, in theory, the United States should have a comparative advantage in something. But when we look at the staggering trade deficit, it seems like this isn't really true. We get goods from China, we give them money, they buy assets. China develops and the US falls further behind. Our "comparative advantage" is debt.

Free trade has destroyed the American blue collar worker and the Rust Belt. The idea that we can compensate for these losses via tax redistribution and job training has been proven false. When we look at the industrial policy of the last 30 years, do we really say "yes, more of this please"?

I'd be willing to accept less prosperity for more social stability and supply chain robustness.

We get goods from China, we give them money, they buy assets. China develops and the US falls further behind. Our "comparative advantage" is debt.

Maybe I'm economically naive, but I think the goods we get from them have utility, and make us better. All they get from the deal is dollars.

Chinese manufacturing is eating the world. Do we want to have a domestic steel industry? Because China makes 12x as much steel as the United States. How about cars? China makes 3x as many.

Rinse and repeat for almost every single manufactured thing. There lead only grows with each passing year.

At first, we built things in China because they were cheap. Now we build them in China because we lack the ability to do it domestically.

I'd say they also get factories and expertise.

We get goods from China, we give them money which they use to buy assets. China develops and the US falls further behind. Our "comparative advantage" is debt.

China's got a long way to go before the US could be "behind".

Free trade has destroyed the American blue collar worker and the Rust Belt.

Wage and price regulations, environmental regulations, and general wealth, have destroyed the Rust Belt. If factory workers elsewhere are making $15/day and yours are making $15/hr, and shipping is cheap, you can't compete at factory work. Blocking that off with tariffs makes everyone (possibly excepting the factory workers who would have lost their jobs) poorer.

The idea that we can compensate for these losses via tax redistribution and job training has been proven false. When we look at the industrial policy of the last 30 years, do we really say "yes, more of this please"?

You can't separate industrial policy from the rest of the economy. Would you rather have had the 1970s forever?

Blocking that off with tariffs makes everyone (possibly excepting the factory workers who would have lost their jobs) poorer.

But low Gini coefficients usually make places nicer to live in them. So it also should be included in the calculation. As an IT - my experience has shown me so far that optimizing for a single variable is rarely the wisest thing to do.

But low Gini coefficients usually make places nicer to live in them.

I don't believe that.

I think it's the other way around. High Gini index countries are all shitholes (or city states with distorted demographics), but low Gini index countries can be the best first world countries, regular second world countries or countries destroyed by a war.

Tyler Cowen really, really hates unrealized gains taxes

He isn't always right, but on this topic he imo makes a lot of good arguments.

In a nutshell, they require massive periodic selloffs of stocks to pay for, which will have tons of second order effects. That in addition to the fact that the government already pulls in enough tax money to piss down the drain/burn in a giant fire, it doesn't need more.

Why on earth would anyone believe that the way to attack a strategy that relies on a very specific step up basis policy was to invent an entirely new type of tax? This makes no sense at all. End the step up basis, I'm on board, why would you keep the strategy working and but then add another tax on top instead of actually fixing it?

Taxing unrealized gains is dumb regardless of what other actions are taken. One does not depend on the other.

If you are rich enough to use that strategy, you still are paying the full 40% on most of your estate. That more than makes up for not paying the lower capital gains tax.

Your interest rate will not be particularly favorable unless the bank is confident that even if the stock significantly devalues you will still pay them back.

There is a reason that this "strategy" is mostly just a speculative law review article and like 1 example. No one complaining about bie borrow die has ever demonstrated that its actually being used to any large extent.

I would love to learn more about this. Happy to read a link if you don't feel like explaining.

https://x.com/RyanHanley_Com/status/1826286357892784269

Tax loss harvesting isn't "avoiding" paying capital gains any more than deducting expenses "avoids" paying tax on profits.

If one of your stocks goes from $10 to $20 and the other from $20 to $10, you haven't actually made any gains for the governemt to tax

Little slips like this convince me the whole thing is an excuse for seizing all assets that aren't owned by blackrock or NGOs.

I keep saying it: somebody is going to have to pay for the black holes that are state budgets because interest on debt is reaching critical levels.

Since all the value is piling into investments to avoid inflation, now governments are trying to seize those investments. Property taxes and seizure of government backed pension schemes have both been floated already.

property taxes... have been floated already.

I have bad news for you...

I meant wealth taxes, my ESL ass keeps tripping over taxation jargon somehow.

somebody is going to have to pay for the black holes that are state budgets

State budgets, in the administration department, are generally themselves welfare schemes. People who benefit from that will never vote for a party that promises to put the brakes on that, which is why the Democrats are the interest party of those people. They have to be.

Will public employees' voting power to make sure they keep receiving those benefits outrank the voting power of the old (though young men are increasingly catching on) to not pay them? Well, stay tuned...

Usually, in cases like these, the two interest groups put their heads together to do something both stupid and evil, and this is called compromise.

This compromise is likely to be inflation.

If one of your stocks goes from $10 to $20 and the other from $20 to $10, you haven't actually made any gains for the governemt to tax

From the pro-tax perspective, if you make $10 on one stock you should be taxed on it; if you lose $10 on another stock, too bad so sad. Why would they give up the tax on the first stock just because you lost money on some unrelated stock?

Because we have an income tax; not a takings

It's already the rule that gains in certain categories can't be offset against losses in other categories. I have no doubt making it so each and every financial instrument one owned had to be treated separately is the kind of thing people who like taxes would put in place.

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If you wanted to target buy-borrow-die, you can just eliminate the step-up basis. Much simpler and less distortionary than unrealized gains taxes.

It would be more focused to target buy-borrow-die by expanding the definition of realization to include using the asset as collateral for a loan. Buy for $100, take out loan for $90 secured on asset, no tax liability. Notice that the asset is now more valuable. Convince lender that the increase in value is durable. Take out another $90 loan secured on the asset. Now you have realized $180 so a $80 gain becomes taxable, and you have money (the loan) to pay it without having to sell the asset.

And taxing unrealized gains has also been avoided since 1913.

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Buy, borrow, die doesn't seem to actually be enough of a problem as to make unrealized gains taxes a reasonable alternative.

Who. Whom.

The trust fund baby who has a fake email job at a non-profit can get the EITC. The blue collar worker might not because they didn't do the forms right. Democrats, of course, want to maximize interaction with the system. Everyone gets a handout! But you need to work through the system to get it.

Simply not being taxed works better for real people.

Uh, blue collar workers have absolutely no difficulty accessing EITC if they're here legally. They may not understand the why but they do understand the how to get the money.

You think blue collar workers don't know how to get the EITC, but your outgroup does? Are there no tax preparation services where you live?

I am a high income white collar worker. I hire an accountant.

But yes, I believe that blue collar workers are often bad at doing taxes and miss out on significant advantages.

nationally about 80% of people eligible for the EITC receive it.

https://www.eitc.irs.gov/eitc-central/participation-rate-by-state/eitc-participation-rate-by-states

I rest my case. Those are really bad numbers.

80% success rate is pretty good. It's pretty obviously not limited to trust fund babies.

The point was that EITC is not limited to hardworking proles but is available to everyone, including people with fake email jobs. The people with fake email jobs will be exceptionally good at claiming the credit. This is what they are built for. That is what they do.

The dude fixing your sink... not so much.

In any case, we're deep in the weeds now. I don't think Trump's proposal is a good one. I never claimed it was.

But blue collar people are getting the shaft and have been for a long time. We need fewer forms. We need fewer rewards for people who fill out forms. We need ways to reward people that don't involve a bureaucrat processing a form, then taking from Peter to pay Paul.

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Correct me if I'm wrong, but I don't think this includes people who just didn't file at all

The participation rate shown in the table is the percentage of eligible taxpayers who receive an EITC payment (Number receiving an EITC payment/Number eligible for EITC). The rate is calculated from linking individuals in the American Community Survey (ACS) collected by the Census Bureau to their tax records provided by the IRS on EITC payments and participation. Specifically, the number eligible for EITC is determined by a model using income and demographic information from the ACS, and the number receiving an EITC payment is determined from IRS tax records.

Interesting, that's a surprise. I know a lot of eligible people who either just don't file or don't bother to take the credit (because it's tiny for single people and probably audit-bait).
Guess I have a biased sample

I can assure you the EIC is not missed out on.

Apparently, 20% of the time it is.

https://www.eitc.irs.gov/eitc-central/participation-rate-by-state/eitc-participation-rate-by-states

Mea culpa.

tax preparation services

That has got to be one of the most obviously made up sinecures in the whole world. Making the tax system so complicated normal people require experts to file returns is one of these routinely insane things Americans somehow shrug off, along with imperial units and their medical insurance system.

On your W-2 they would just create a new box that says untaxed OT earnings. When you go on turbo tax, it will ask what number is in box 15. You input that. Pretty simple.

EITC has the problem that it can reduce wages. In contrast this proposal only increases the benefit for working OT; not the baseline wage. So might be harder for the employer to capture the benefit of the tax break.

I don’t think either has a big interaction with the system. But there is a point that this is targeted a bit more to help blue workers / less to help poor white collar worker and is harder to accrue the benefit to the corporation.

I wasn’t making a policy point about comparing blue collar to white collar but a political point.

The only policy point I would make is that I frequently find low paid white collar jobs anti productive (eg activist type jobs).

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If you want me to defend this "policy suggestion", I'm not going to. I never even tried to. My attempt was to make a larger point about party alignment between working class/blue collar and the leisure class/white collar.

He seems to have a problem with blocking. He blocked me for just trying to understand what he was saying. It's a shame, because I like a lot of his perspectives, but at the rate he's going, he's going to end up just talking to himself here, wondering where everyone else has gone.

Of the OT-eligible workers who are making substantial bank from overtime, how many of them are actually Trump voters? Genuine question: of the couple people I personally know who make $50k+ in OT, they are all people working for the city. (Though I suppose many in that situation are cops and firefighters, who probably break a different way than most public sector workers.)

Basically all of them. The entire construction industry, police, firefighters.... really the main exception is nurses, and those are less blue than commonly believed. Lower working class people usually don't get overtime, their hours are capped at 38 or whatever to avoid paying it.

Now obviously upper management will game the system by changing their compensation structure, but who cares, the government's gonna go bankrupt regardless, it's more a matter of who gets a handout first.

That would be pretty much the entire hourly construction workforce actually. In that industry, abundant overtime hours is a selling point.

This overtime proposal is interesting since it only rewards people who are already working more than 40 hours a week. And it will, of course, hit mostly blue collar workers.

Do you have any evidence that blue-collar workers work OT more often than white-collar workers? My white-collar job offers a ton of opportunities for OT, which a number of employees eagerly jump on. We have some employees working nearly 50 hours a week, voluntarily, because they like making more money.

I think it's less blue-collar vs white-collar and more waged vs salaried. And the professions that are most aligned against Trump are disproportionately salaried (I think?) My guess is that there's a big split in voting patterns between salaried and non-salaried workers, perhaps even more than white-collar vs blue-collar.

Do you have any evidence that blue-collar workers work OT more often than white-collar workers?

I don’t. It was simply my assumption. Do you have evidence to the contrary?

But yes for practical reasons this won’t work. You wouldn’t want Microsoft to convert to hourly so their software devs can earn 200/hr tax free.

I think, like most of Trumps things, he is pointing at something real but the policy details are lacking. It’s a creative attempt to find a way to reward the blue collar worker.

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