[JerryLove]

Originally Posted by normajean777

Under many flat tax proposals I have read about most of them have a exemption. The most immediate one I have read (the Hoover Institutes) is about $20,000. So first of all this family is not paying any taxes.

Not really a flat-tax then.

Of course there would be no minimum wage. But that does not mean that wages would be low. Japan has no minimum wage but they have very high wages in general. So the minimum wage doesn't have to have any affect in general. Also a few months ago, in Alberta (Canada) they raised the minimum wage to $8 from $7. It affected 2% of the population. Thats all. Barely anybody. The only people who may of held these jobs are kids probably.

Japan does have a minimum wage, it's set by the Minister of Labor and is per-day.

Looking at this country, we have a great number of people (mostly illegal) working below the minimum wage, and a great number very near it. Looking a the past (before government intervention prevented companies from sidliing union attempts), the corporations like Carniege, Standard Oil, and US Steel had shanty-towns of indentured workers.

I'm not saying that all jobs would head this way. If there's a need for labor, then there's a need for labor... but there's a huge pool of availble very-low-wage labor for most jobs either here or that could be imported.

Of course if you can't afford to have children you don't. Common sense (which is what capitalism is based on).

That's never in history actually worked that way.

I really wouldn't base such a small example which I assume represents an extremely small portion of society as an example for capitalism.

"the share of the workforce earning subpoverty pay [is] 24% [in 2003]" - Businessweek.

Even more conservative numbers put the working poor in excess of 7 million... and that's under the current system of manditory education, union protections, etc.

[JerryLove]

Originally Posted by grand_master_d

So, Jerry... I'm torn. I know you don't want to talk about the "morality" of the two - but that has a lot to do with the "whys" of our current system. So... you tell me this: Realistically, how would "no homeless shelters" [as an example] affect your life - morality not included... ???

It's not that I don't want to talk about it... open a thread discussing it and I'm there... it's that my topic is already too-broad and that makes it broader.

In short, I'm trying to imagine a society that implamented such a system. It's equally interesting to imagine the other extreme... though more complicated as it's more decision-based (the government itself has great influence on the outcome).

[tlj009]

I think that scholarships will pay for some.

But let's be honest. Minimum wage now is about $6 per hour, and there won't be a minimum wage under Lasse'faire. Assuming that they even managed $6 per hour, that's $12,000 per year. Given a flat tax rate of even 10% (less than half of what I pay now) that's $10,800 post-tax dollars.

Do you think that such a family could afford to spend 33% of it's income, per-child, on direct education costs? I think they will prioritize food.

Well to be honest, I think that $3,000-$4,000 per student per year is the price that it could lowered to today without even having industries/business investing in it. With no minimum wage law and no regulations on business, I suspect the price of living will fall drastically, all pay will likely fall, and the cost of that education would likely fall. I think 1/10 of a family’s income per child, for the average worker, may be closer. And I only say that because I suspect the price the average worker gets paid would fall that much. I see middle class getting smaller and there being more poor and rich. Still, if businesses invest in it, and I think that it is likely, then it may be a very cheap education.

Further, if I look back before the public school system, that's what I see. Prior to the 1840s, education was available only to the wealthy. There weren't scholarships for elementary school, people didn't take out loans, and the costs were not accessable to the average person (much less the poor).

In the 1840s, funded education first really appeared because the average American kid was too ignorant ot be trained to work in a factory. Even as late as 1900, only 6% of the population graduated high-school.

Well I think that things are a little different today. Today, nearly everyone in the US gets some sort of education. Education is seen as a very good thing and capable of making people succeed. On top of that, I think that there are a good many more industries spread throughout the US even in rural areas. So I think that scholarships and funding of schools by businesses would be a lot more common than it was in the 1840's. And for the average worker, I do think that it would be very hard to get anything more than the most basic education and a training for a specific job or business.

An apparently different topic, though the removal of existing regulation would certainly open the door for such vocational schools. We saw similar in the 1840s, and still see vocational schoos (ending around age 15) in some other countries.

So how have they worked out?

Like kids working in sweat shops in Indonesia now?

I'm not sure that's prescedented. Why not import a trained labor pool )or indeed relocate)?

I am sure that there would be the sweatshops, but I think that the ones that did get the basic training would be just one step up from that.

The importing of trained labor could be a possibility, but why would they do that if they could train their workers cheaply in the local area? They could relocate to a location where the workers are trained, but where would that location be without a standard education system for the entire nation? They would likely go elsewhere and that would still leave a market in the local areas for the things that they are selling. That wouldn't happen simply because there is no minimum wage and even with the cost of training them, it is still cheaper than paying a higher wage.

I'm not too worried about college. More about elementary.

Well what I was saying is that the standard education might get someone to a 5-6 grade level today. And for anything more, the colleges would have to supply it before even starting a bachelor's degree program. So the rich would get a much better education. So the rich get richer and the poor get poorer.

I suspect that upper education would survive... but without children in primary school, few would be able to attend universities.

Certainly, that was the case before the public school system, and is the case where there is no public school system... though other factors can contribute as well.

I agree. The rich would attend universities.

So what does that do to the middle class?

Are more jobs created by a less educated workforce? Does this increase the divide between rich and poor?

The middle class would still be there, but there would be less of a difference between the middle class and the working poor. More jobs would definitely be created by a less educated workforce, but just because they are working doesn't really mean that they would be better off than they are now. It just means that they may not starve to death.

And I think that the divide between the rich and the poor would be huge with few middle class in between or the difference in middle class and poor would be to small to acknowledge the difference. There will be little or no incentive for the rich to give to charities so I doubt that they would give much. The poor and middle class would likely give a lot, but they would have less to give.

[JerryLove]

Well to be honest, I think that $3,000-$4,000 per student per year is the price that it could lowered to today without even having industries/business investing in it. With no minimum wage law and no regulations on business, I suspect the price of living will fall drastically, all pay will likely fall, and the cost of that education would likely fall. I think 1/10 of a family’s income per child, for the average worker, may be closer. And I only say that because I suspect the price the average worker gets paid would fall that much. I see middle class getting smaller and there being more poor and rich. Still, if businesses invest in it, and I think that it is likely, then it may be a very cheap education.

So what we may end up with (and there is prescedend for this) is some areas without access to any education, some areas with access only to expensive education, and some areas with access to cheap education, likely focused entirely on training to work in a factory of service industry?

Well I think that things are a little different today. Today, nearly everyone in the US gets some sort of education. Education is seen as a very good thing and capable of making people succeed.

But it's also both provided and mandated.

I think that some communities place a high emphasis on education. I don't think it's a generally true statement.

On top of that, I think that there are a good many more industries spread throughout the US even in rural areas. So I think that scholarships and funding of schools by businesses would be a lot more common than it was in the 1840's. And for the average worker, I do think that it would be very hard to get anything more than the most basic education and a training for a specific job or business.

I suspect it will look much like the 1840-1860 timeframe... perhaps a little better.

So how have they worked out?

Mixed results... much like the rest of education.

But let's be honest, there are a lot of jobs with skill levels higher than "casheer" but lower than "analyst", or specialized (all the trades).

The importing of trained labor could be a possibility, but why would they do that if they could train their workers cheaply in the local area? They could relocate to a location where the workers are trained, but where would that location be without a standard education system for the entire nation? They would likely go elsewhere and that would still leave a market in the local areas for the things that they are selling. That wouldn't happen simply because there is no minimum wage and even with the cost of training them, it is still cheaper than paying a higher wage.

I'd have to look at historical examples, but my gut feels that it's not cheaper to fund an education system through to at least the beginnings of college in the hopes that some of the kids you educate will succeed and choose to work for you. Fare easier/cheaper/more reliable to import trained people.

Well what I was saying is that the standard education might get someone to a 5-6 grade level today. And for anything more, the colleges would have to supply it before even starting a bachelor's degree program. So the rich would get a much better education. So the rich get richer and the poor get poorer.

As "are you smarter thana fifth grader" reminds us, that's acctually pretty far.

The middle class would still be there, but there would be less of a difference between the middle class and the working poor. More jobs would definitely be created by a less educated workforce, but just because they are working doesn't really mean that they would be better off than they are now. It just means that they may not starve to death.

And I think that the divide between the rich and the poor would be huge with few middle class in between or the difference in middle class and poor would be to small to acknowledge the difference. There will be little or no incentive for the rich to give to charities so I doubt that they would give much. The poor and middle class would likely give a lot, but they would have less to give.

I think this is a very valid assessment.

There are a couple of factors that lead to a middle class... one is industry, and that is still there. The other, however, is oranized labor. It's not clear to me how effective unions would be without governmental protections.

[tlj009]

A little different angle but...

A lot of times water is supplied by a non-profit organization. I assume that under this new government electricity and water would have to be served the same way. I doubt for profit could work because of monopolies in the area and no government regulating prices. One or all of these services could be provided by one non-profit organization. Education and anything else deemed necessary by the local community could be funded by this same non-profit organization. That would really be just another flat tax but it wouldn't technically be the government providing the service.

[JerryLove]

Originally Posted by tlj009

A lot of times water is supplied by a non-profit organization.

The cables are generaly, currently, owned by regulated industries. California tried de-regulating the power suppliers and prices shot through the roof.

I don't know that there's any prescedent for competing power-companies to come in and preven price-fixing without governmental regulation... I suspect that either power prices will shoot through the roof, people will generate much of their own power / a cottege industry will emerge, or both.

I assume that under this new government electricity and water would have to be served the same way. I doubt for profit could work because of monopolies in the area and no government regulating prices.

That would seem to make a great deal of money for a for-profit company. The problem has to do with the need for immenant domain... though I suppose that companies could contract with the owners of the roads.

One or all of these services could be provided by one non-profit organization. Education and anything else deemed necessary by the local community could be funded by this same non-profit organization. That would really be just another flat tax but it wouldn't technically be the government providing the service.

If it's a civil union it's not a marriage?

So you would propose that communities should band together and collect money, by force of contract, to put into an entity which provides services for the community? I think you've already pointed out the problem... it's still a government.

[tlj009]

The cables are generaly, currently, owned by regulated industries. California tried de-regulating the power suppliers and prices shot through the roof.

I don't know that there's any prescedent for competing power-companies to come in and preven price-fixing without governmental regulation... I suspect that either power prices will shoot through the roof, people will generate much of their own power / a cottege industry will emerge, or both.

Or the community would decide that they wanted to do it like the water is payed for (in many places) and vote on a board with everyone with a meter having a vote. And so a non profit organization suppling power would be created. But I think I may have missed something with your reply.

That would seem to make a great deal of money for a for-profit company. The problem has to do with the need for immenant domain... though I suppose that companies could contract with the owners of the roads.

They could but non-profits would keep the prices low and still supply power. Imminent domain would likely not be much of a problem... at least it hasn't been for the majority of water companies. They just pay the landowner for an easement.

If it's a civil union it's not a marriage?

So you would propose that communities should band together and collect money, by force of contract, to put into an entity which provides services for the community? I think you've already pointed out the problem... it's still a government.

Yes it is still very much like a government except that it is both voluntary and a (non-profit) business. It is voluntary because you don't have to pay the service of water, electricity, or gas whichever one that we are talking about. You could always drill or dig your own well, have your own power supply, or do without gas. Or a for profit company can come in and supply the needs, but I suspect that they would be a good bit higher than the local non-profit. Anyway it would not have to cover everyone in the area. But if you chose to participate in the group, then it would include paying for some other community projects that were specifically voted on. It is like a non-profit selling hamburgers to give the money to charity. You buy the hamburger because you are hungry, but you are also providing for the charity.

Anyway this is the only other way that I can think of to provide some services without the local government supplying them. And without the government supplying these needs, I am willing to bet that something similar to this would develop to supply them.

[JerryLove]

Or the community would decide that they wanted to do it like the water is payed for (in many places) and vote on a board with everyone with a meter having a vote. And so a non profit organization suppling power would be created. But I think I may have missed something with your reply.

Let's start at the beginning because I am confused.

You think that a group will buy and run a non-profit power-company? How will it be paid for?

They could but non-profits would keep the prices low and still supply power. Imminent domain would likely not be much of a problem... at least it hasn't been for the majority of water companies. They just pay the landowner for an easement.

I'm looking around for the non-profit resturaunts and grocery stores... or more analogously, the non-profit oil companies and refineries and not finding any.

I don't see any prescedent to believe that power companies, which are not currently non-profilt; will become non-profit nor lower prices out of their desire to be nice.

Yes it is still very much like a government except that it is both voluntary and a (non-profit) business. It is voluntary because you don't have to pay the service of water, electricity, or gas whichever one that we are talking about. You could always drill or dig your own well, have your own power supply, or do without gas. Or a for profit company can come in and supply the needs, but I suspect that they would be a good bit higher than the local non-profit. Anyway it would not have to cover everyone in the area. But if you chose to participate in the group, then it would include paying for some other community projects that were specifically voted on. It is like a non-profit selling hamburgers to give the money to charity. You buy the hamburger because you are hungry, but you are also providing for the charity.

And when there are two competing water companies? Wherre will you put the pipes?

[tlj009]

You think that a group will buy and run a non-profit power-company? How will it be paid for?

Actually I was thinking that people in a community would see that the power company has a monopoly in the area and are gouging prices (would likely happen). So there alternative would be A) each individual home owner generate their own power B) start a new company. Providing their own power would be very costly and require a maintenance and/or expertise that everyone doesn't have. But my friend's brother's sister-in-law's cousin knows how to start a plant generating power for around 500 homes. So everyone contributes $1,000 per meter start up, the corporation is formed, and a loan is taken out for startup. So now we have a company that is not going to gouge prices. It takes what 1-2 megawatts to power 500 homes. The generator costs $500,000-$600,000. So with the startup cost and the monthly bill to pay back the loan, pay for repairs, and operation. The loan should be paid off in 5-10 years (even a 20 year loan wouldn't be too much) and money could be put aside for maintenance and prices lowered even more. So in short, if it became necessary because of price gouging, yes I think that people would form a company and supply it their selves.

I'm looking around for the non-profit resturaunts and grocery stores... or more analogously, the non-profit oil companies and refineries and not finding any.

You do realize that the whole point was because the electric companies would have a monopoly in the area and gouge prices. None of your examples fit that. Not even the oil companies or refineries although they are closer and would likely be a problem then but not now.

I don't see any prescedent to believe that power companies, which are not currently non-profilt; will become non-profit nor lower prices out of their desire to be nice.

Yeah, me neither. But that isn't what I have been talking about.

And when there are two competing water companies? Wherre will you put the pipes?

Well you could string them overhead but it may be better to leave them in the ground like the rest of the world does. Why do you think that it is a problem? A water company cannot compete with the non-profit organizations that are out there supplying water. Why? Because they don't make a profit. So either a company would be in the area and gouge prices (likely) and cause the residents to start their own water system. At that point the company would be out of business because they would lose a majority of their customers. The alternative is that their prices would remain reasonable; they would make a small profit and supply the need. I suspect only a few on the smarter side would do that. Even then the people may choose to either buy the water system and run it their selves or start their own just so that they would be in control.

I am sure that your water is probably supplied by the city, but look around at the counties in your area. Are the people supplied by a business or a non-profit organization? In louisiana most rural areas are supplied by non-profits with every meter having a vote.

[Chrysostom]

Originally Posted by JerryLove

Looking at this country, we have a great number of people (mostly illegal) working below the minimum wage, and a great number very near it. Looking a the past (before government intervention prevented companies from sidliing union attempts), the corporations like Carniege, Standard Oil, and US Steel had shanty-towns of indentured workers.

With contemporary transportation capabilities, companies wanting or needing to avoid minimum wage laws can easily outsource. The way to get companies to pay more to their employees is to make it worth their while to pay more, not to try to artificially force them to up their salaries.

The primary means of accomplishing this goal by the US government was the education mandate. (After all, you said that most people were formerly too uneducated even to work in factories, and why on earth would somebody who can't even work in a factory expect to make much money?) While effective at raising salaries, this had the unfortunate side-effect of turning people into mindless factory fodder (since the point wasn't actually to educate them).

So I would say the government's actions then were just like they are now -- effective at the immediate goal but society-destroying in the long run, as the Fed's current attempt to prop everything up is making people think things are fine but sending inflation through the roof. For this general reason, I take government action to be wise only in emergency cases; the problem is that we're trying to turn an emergency response into a permanent solution, not unlike the over-fascination with hospitals.

Originally Posted by JerryLove

"the share of the workforce earning subpoverty pay [is] 24% [in 2003]" - Businessweek.

Since you're talking about the government's influence on poverty, the government's own numbers on poverty are more relevant: 12.3% of all households (not just the workforce) is the number given for 2006, with 2003 being only slightly higher. (You've also got to factor the impact of immigration on this number, as higher wage-lows will only attract more low-paid immigrants and therefore thin out the poverty reduction.)

This information can also be found on Wikipedia, which notes that the US poverty rate is 17% according to UN standards. Assuming we take UN standards to be relevant, despite the fact that they ignore diversity, they still provide a number significantly below the Businessweek number.

I'm assuming you're getting the information from Wikipedia, which is citing this article. The article gives us this statistic right after complaining that sometimes unemployed people are willing to work for less than union workers, but I don't see the authority for the statistic. My best guess would be "the Economic Policy Institute (EPI), a liberal Washington research group," to which it refers previously, but after having read this book I'm inclined to take the "living wage" declarations of any self-styled "liberal... research group" as out of touch with reality.

[normajean777]

Originally Posted by tlj009

And I think that the divide between the rich and the poor would be huge with few middle class in between or the difference in middle class and poor would be to small to acknowledge the difference. There will be little or no incentive for the rich to give to charities so I doubt that they would give much. The poor and middle class would likely give a lot, but they would have less to give.

Whats the incentive now

[Ax]

Originally Posted by normajean777

Whats the incentive now

Tax breaks....

Seriously... I kinda wish we all could afford to give so much to charity every year that all our tax money came back... if everyone were to do that, the government would go broke and then we'd see about government spending.

[normajean777]

Originally Posted by normajean777

Whats the incentive now

Originally Posted by AXguitar

Tax breaks....

Seriously... I kinda wish we all could afford to give so much to charity every year that all our tax money came back... if everyone were to do that, the government would go broke and then we'd see about government spending.

Sorry I had written a much larger paragraph than that. Guess it didn't post (I'm not even going to try to type it up again).

Tax breaks are fine but they can't be the main reason that people donate. For example some Christians tihe 10% of their income regardless of tax treatment (unfortunately not all of them). Big donations certainly are not for tax deductions. I doubt Bill Gates could write off his $30 billion in contributions to his charity on his taxes, and I doubt he was thinking very little about them when he did. Same as Warren Buffet.

A huge number of billionaires become philantropists because they want to be remembered, or just want good publicity. They realize that they cannot take their money with them and choose to give it away instead (also in despise of their spoiled kids).

Also other incentives include good marketing. Consumers like to see companies with heart. Right now companies are doing the same thing with the green fad. IE GE Green.

So I think that in a free market, the amount of money to help the poor will still be there, funding similar organizations as today, but even more efficient organizations as the market would dictate. An example of private philantropers filling in the gap when government cuts spending is research in stem cells. The government decided to stop funding new strains in stem cell research and people were outraged. They saw that money was needed for the cause and completely filled the gap in.

Just because we would have a free market, it is in no way meaning that human pyschology would change and people would all of a sudden have no compassion.

[tlj009]

Sorry I had written a much larger paragraph than that. Guess it didn't post (I'm not even going to try to type it up again).

Tax breaks are fine but they can't be the main reason that people donate. For example some Christians tihe 10% of their income regardless of tax treatment (unfortunately not all of them). Big donations certainly are not for tax deductions. I doubt Bill Gates could write off his $30 billion in contributions to his charity on his taxes, and I doubt he was thinking very little about them when he did. Same as Warren Buffet.

A huge number of billionaires become philantropists because they want to be remembered, or just want good publicity. They realize that they cannot take their money with them and choose to give it away instead (also in despise of their spoiled kids).

Also other incentives include good marketing. Consumers like to see companies with heart. Right now companies are doing the same thing with the green fad. IE GE Green.

So I think that in a free market, the amount of money to help the poor will still be there, funding similar organizations as today, but even more efficient organizations as the market would dictate. An example of private philantropers filling in the gap when government cuts spending is research in stem cells. The government decided to stop funding new strains in stem cell research and people were outraged. They saw that money was needed for the cause and completely filled the gap in.

Just because we would have a free market, it is in no way meaning that human pyschology would change and people would all of a sudden have no compassion.

You are kind of missing the point. I wasn't saying that people would change and have no compassion. My point was really the opposite. People won't change and have more compassion. So the gaps made from no government funding would not be filled. And even that is probably a best-case scenario. I see no reason to expect the rich to give more with less incentive than they have now.