Chapter V: Taxes Discourage Production

The Industrial Revolution was a major turning point in history that took place between 1760 and the mid 1800’s. During this time frame, a variety of different machines were invented and put in factories to make workers and everyday people’s lives easier. These machines had to be run by people such as women and even children because the men were mostly in coal mines. Some of the many negative consequences about these new jobs and new machines being invented were; child labor, physical abuse on the job, and unsafe working conditions. While some might argue that Industrialization had primarily positive consequences for society because more jobs became available, it was actually a negative thing.

Both coauthors explain “the myth of corporate taxes” with two statements: “When it comes down to it, no corporation or business really pays taxes,” and therefore, “the burden of it all falls on us [the taxpayers]” (32). They continue their explanation with another claim: “The economic education of Americans is so woefully inadequate that many of us actually think we pay less as individuals when the taxes are transferred to businesses and corporations” (31). To illustrate their point, the authors created a fictional corporation with simple guidelines. Although not their actual example, the following is similar: Qwerty Inc., a manufacturer of computer keyboards, has 200 employees and 100 shareholders. At the end of the year, Qwerty Inc. sold 1000 keyboards at $100 dollars each; therefore, the yearly income was $100,000. After labor, cost, taxes, and other charges, Qwerty’s profit is $2000 for the year. If the government adds a 10% corporate tax increase, Qwerty now owes an additional $200 in taxes. According to Boortz and Linder’s logic, Qwerty has several possibilities to balance the budget from the tax increase: the shareholders could see their dividends decrease, the price on the keyboards could be raised, some employees could be fired to save on cost, or employee benefits could decrease to cover the cost of the tax increase. This simple example demonstrates the current tax code’s consequences on the taxpayers (citizens and consumers) and introduces “the embedded

Approach 1: Taxes can be used to force businesses to pay for external costs. When a business’ action creates a cost, it would be taxed to pay for damages. This approach can be hard to use. How do we prove that a particular business caused harm? How much should damages cost? If the “right” amount is chosen, businesses will find other ways to create or offer goods and services because the taxes are too much. But sometimes the costs decided by legislatures, government agencies, or judges are not enough to stop an externality. Businesses decide it is more profitable to pay the tax than change its actions.

“Making it in America”, by Adam Davidson, illustrates how technology and machinery are interchanging humans in the workforce. Machines are taking over factories and leaving more employees out of work. Davidson also points out that the wage-gap is considerably increasing between un-educated and educated laborers. Corporations and companies all over the world, including the Americans, Europeans, and Chinese, are purchasing machines over hiring workers to save money.

Business taxes can have a huge impact on the profitability of businesses and the amount of business investment. Taxation is a very important factor in the financial investment decision-making process because a lower tax burden allows the company to lower prices or generate higher revenue, which can then be paid out in wages, salaries and/or dividends. Business taxes include, Federal Income Tax; a tax levied by a national government on annual income, Payroll Tax; a tax an employer withholds and/or pays on behalf of their employees based on the wage or salary of the employee, Unemployment Tax; a federal tax that is allocated to unemployment agencies to fund unemployment assistance for laid-off workers, and Sales Tax; a tax imposed by the government at the point of sale on retail goods and services. Sales tax is based on a percentage of the selling prices of the goods and services. Consumers pay sales taxes, but effectively, business pay them since the tax increases consumer’s costs and causes them to buy less.

In the era when capitalism was booming workers faced very harsh working conditions and little job security. The workers were the very last ones to benefit from their own work, “the products of capitalism invariably benefit[ed] the ‘wealthy’ first”(DiLorenzo, pg.96). Workers worked long hours sometimes even a 24 hour shift and maybe got a day off every two weeks, with a typical work week of 50-54 hours, where today it is only 40 hours. Due to this era being big on industrialism that meant machines were constantly replacing workers, that is “new machine techniques replacing old human skills

The Industrial Revolution that took place after the Civil War made for a more economically sound country. American workers, however, were becoming more and more dependent upon their wages; a fear of unemployment also stemmed from this. Workers didn’t share in the benefits that their employers reaped. In a chart representing the hours and wages of industrial workers, from 1875 to 1891, it shows that even though their wages were subtly increasing,

One major problem found with industrialization is the development of political machines. A political machine is a group that controls politics for financial gain. One major political machine was located in New York City in the Tammany Hall building led by Boss Tweed. William L. Riordan wrote about George Washington Plunkitt who worked under Boss Tweed. He would use insider knowledge to make a profit. Plunkitt would find out the city was going to build a jail, so he would buy the land for the jail at a low rate then sell it to the city at a high rate. This would create a profit to give back to Boss Tweed. Plunkitt would also help families that had their houses burnt down to get them to agree to anything he said. This allows for the political

Recently, the public and the government of the United States have been at odds with each other over many enforced fiscal policies. Whether one believes that the answer to the nation’s economical crisis is an increase taxation of the wealthy one percent, or the leveling of the tax rate, every concerned citizen is searching for a solution. Typically, in American politics, the liberal side of the political scale believes that the wealthy should contribute more to the nation’s tax income. This idea centers on the notion that a lower tax rate on the poor will ease their burden and allow them to purchase more products; meanwhile, the rich will support the tax deficit from the lower classes with their own vast amounts of wealth. Opposite liberals, there is the conservatives. They will typically advocate for a tax break for business owners (wealthy or otherwise) or a more even tax rate across the socioeconomic classes. This outlook is supported by the idea that if the upper one percent of the U.S.A. is flourishing, it will produce more jobs and opportunity for the middle and lower class. Regardless of who is consulted, many people in today’s more liberal society will agree with higher taxation of the rich. However, there is a growing number of people in the United States that believe that the answer to solving the economic crisis is to abolish the current income tax and replace it with a national sales tax. By installing a national

However, it can be argued that mechanization caused the loss of job opportunities to Canadians in rural areas because human and manual labour was replaced by machines that did twice as much work and functioned better. An example of this is the “iron chink” that replaced Asian workers (Francis, Jones, Smith 139).

For around three decades, the effects of the US tax policy have been an issue because it has created inequality. According to Bargain (2015), the main idea about tax system policy is that inequality remains in the United states and it isn’t a system fair. Furthermore, no one enjoys paying taxes yet all but the extreme libertarians agree as Oliver Wendell Holmes said “that taxes are the price we pay for civilized society. It shouldn’t take U.S taxpayer 6% billion hours and 168% billion per year to file their taxes”. The burden of paying that price has been distributed in increasingly unfair ways. Taxes on wealth, such as capital gains, are often more subject to a lower tax rate than wages and salaries, which the vast majority of every day.

The taxes are so much these days that the government are getting money for nothing. The government take about 12% of the house payment. That means if you want to sell your house it must be expensive and that is a problem for many people. There are many houses that are in millions and billions. There are people buying them and selling them The taxes of these billions of dollars goes to the government because you are taking their space. New york city's government gets about 50 billion dollars a year. These days taxes are affecting people because the people can't buy anything. If you want to go buy a car you must pay the taxes. Almost everything is with taxes. The people get affected by taxes because they must think about the taxes before buying

The United States is a service economy. The growth of power within the American service sector in the 20th century corresponded with the long term decline of employment in agriculture and manufacturing. In the late 19th century, the capacity of the American labor force involved with agriculture started to decline and more of the Americans found employment in the manufacturing and service sectors. In the earlier part of the 20th century, manufacturing became the largest sector of employment. As new technology comes along, they are no longer needed in the workplace. All of the new machines are replacing them so quickly, and it's becoming more difficult for them to find new employment. The main issue is that many of these workers don't have many

“By reducing taxes for households and businesses, the reform would boost consumer spending and business investment in the short term, lifting economic growth”(3). This viewpoint is shared by many analysts that support President Trump’s new tax reform. The most impactful change caused by the Tax Cuts and Jobs Act is the corporate tax cut from 35% to 20%, and the repeal of the corporate alternative minimum tax(4). This change will result in companies losing a lot less money in taxes and having the ability to use that money towards capital and investment purchases. These new benefits could also sway companies to stay within the united states, as outsourcing and moving overseas would no longer result is as big of tax relief and increased profits. This new incentive for companies to stay local within the united states would increase local business, and the boost in business and investment spending would directly result in an increase in the United States’ aggregate demand and a boom in our country's economy. All of these factors, in theory, would come together and fulfill Trump’s goals of economic growth while avoiding any increase in our national debt. The problem, however, becomes apparent when looking at the actual potential this

“Great! Another decapitated worker, that's the 3rd one this month.” Industrialization developed in the united states as people began to find easier ways to make and acquire goods that kept costs down which led to more profit on the end of the owners of these new businesses. Industrialization was a time of great economic progress for the united states as we were finally able to evolve from the harsh labor of agricultural work and began to mass produce goods that greatly benefited our economy. Because of industrialization many people were able to find work that previously couldn’t which let to them being able provide for their families even more than they could before. Industrialization impacted workers in very extreme ways as they constantly were at risk of losing their limbs or even their lives to the machines in the factories that they worked at, and in order to support their families even had to employ their own children just so they could earn an honest living. In response many workers formed unions as an insurance policy where they could demand higher wages and the government made public schools mandatory for children so that they didn’t have to also own risk their lives in factories. However it wasn't all bad for the workers as the companies that they worked for often provided them with homes and goods to make the lives of the workers and their families just a little easier.