Tag Archives: Money/Economy/Taxes
maximum-wage law was enacted by Massachusetts as early as 1630
he first maximum-wage law was enacted by Massachusetts as early as 1630. Due to the high wages commanded by the scarcity of construction craftsmen, the law concentrated on maximum-wage rates in the building trades. Carpenters, bricklayers, etc., were limited to two shillings a day and any payment above this rate would subject both the employer and the worker to punishment (for instance, a buying-cartel of employers established by the law punished the recalcitrant employer who decided to break ranks). Almost immediately, the magistrates decided to imbibe more of the magic medicine, and legal wage rates were pushed down to 16 pence a day for master carpenters and bricklayers, and correspondingly lower for other laborers.
But the economic laws of the market made enforcement hopeless, and after only six months, the General Court repealed the laws, and ordered all wages to be “left free and at liberty as men shall reasonably agree.” But Massachusetts Bay was not to remain wise for long. By 1633 the General Court became horrified again at higher wage rates in construction and other trades and at the propensity of the working classes to rise above their supposedly appointed station in life by relaxing more and by spending their wages on luxuries. Denouncing “the great extortion … by divers persons of little conscience” and the “vain and idle waste of precious time,” the court enacted a comprehensive and detailed wage-control program.
The law of 1633 decreed a maximum of two shillings a day without board and 14 pence with board, for the wages of sawyers, carpenters, masons, bricklayers, etc. Top-rate laborers were limited to 18 pence without. These rates were approximately double those of England for skilled craftsmen and treble for unskilled laborers. Constables were to set the wages of lesser laborers. Penalties were levied on the employers and the wage earners who violated the law. Sensing that maximum controls below the market wage led to a shortage of labor, the General Court decreed that no idleness was to be permitted. In effect, minimum hours were decreed in order to bolster the maximum-wage law — another form of compulsory labor. Workmen were ordered to work “the whole day, allowing convenient time for food and rest.”
Interestingly, the General Court soon decided to make an exception for the government itself, which was naturally having difficulty finding men willing to work on its public-works projects. A combination of the carrot and the stick was used: government officials were allowed to award “such extraordinary wages as they shall judge the work to deserve.” On the other hand, they were empowered to send town constables to conscript laborers as the need arose.
Although merchants were happy to join the landed oligarchy and the Puritan zealots in forcing down the wage rates of laborers, they were scarcely as happy about maximum controls on selling prices. The gentry were eager, however, to force downward the prices of products they needed to buy. A blend of mercantilist fallacies and Puritan suspicion of commerce, the result was persistent attempts to force commodities below their market prices. Having little conception of the function of the price system on the free market, the Massachusetts authorities also felt that maximum-price control would bolster the maximum-wage-rate program. There was no understanding that general movements in prices and wages are governed by the supply of and demand for money, and that this too can best work itself out on the free market.
Corn was the major monetary medium of the North, and in 1630 Massachusetts set the sterling price of corn at six shillings per bushel. Failing to work, this control was repealed along with the wage laws of 1631, and corn was “left at liberty to be sold as men can agree.” In 1633, however, maximum-price controls were reimposed as an auxiliary to the wage controls.
The massive wage laws of 1633 were quickly discovered to be a failure; once again the quiet but powerful economic laws of the market had triumphed over the dramatic decrees of the coercive state. After one year the actual wage rates were 50 percent higher than the statutory levels. At that point, the General Court repealed the penalties against paying, but retained those against receiving, wages above the fixed legal rate. While, in fact, no employer had ever been tried or penalized under the old act, the wage law was now an open and flagrant piece of class legislation. This was nothing new, however, as there were ample precedents in English maximum-wage laws since the early 15th century.
Another change made in 1634 allowed a little flexibility in decreed prices and wages by permitting each town to alter the legal rate in case of disputes. Only a year later the General Court, despairing of the continued failure of the law to take hold, repealed the comprehensive wage controls and the auxiliary price controls. Just before this comprehensive repeal, the courts had apparently been driven by the failure to inflict ever harsher penalties; fines had been so heavy that two workers were imprisoned for failure to pay. The authorities were at the crossroads: should they begin to impose on workers violating clearly unworkable economic decrees the sort of punishment meted out to heretics or to critics of the government? Happily, common sense, in this case, finally prevailed.
(Read more)
Grants Pass, Oregon Releases Inmates After Budget Cuts Leave County With ‘No Other Alternative’
Dozens of inmates ran whooping from a small town jail into the sunshine Wednesday after a cash-strapped county in Oregon’s timber region was forced to release them amid budget cuts.
The sheriff’s office released 39 inmates, dropping the population at the jail in Grants Pass to 60 – half of them federal prisoners held on contract.
“We had no other alternative based on our funding predicament,” said Josephine County Undersheriff Don Fasching. “We are very concerned for public safety.”
About half of those released will finish their sentences on work crews. The rest were waiting for trial.
The most common charges were for drug crimes, minor assaults, burglary, identity theft and probation violations. (Read more)
German opinion poll shows majority believe euro membership carries more disadvantages than advantages
From Open Europe:
New German opinion poll shows majority believe euro membership carries more disadvantages than advantages;
In an interview with Leipziger Volkszeitung, German Interior Minister Hans-Peter Friedrich reiterated that German assistance for Greece was not unconditional, arguing that: “We’re not willing to pour money into a bottomless pit… Anyone who wants to see help and solidarity from us has to accept that we expect a certain amount of seriousness and a certain amount of reasonableness”. An opinion poll commissioned by German state TV ZDF published on Friday showed that 79% of respondents rejected eurobonds as a solution to the crisis. Support for euro membership appears to be waning as 50% of respondents (up from 43% in February) say they believed Germany’s euro membership carried more disadvantages than advantages. According to the poll, 45% took the opposite view (down from 51% in February).
US House Stealthily Passes Extreme Pro-Israel Legislation. Ron Paul lone dissenter.
The House bill basically provides Israel with a blank check drawn on the U.S. taxpayer to maintain its “qualitative military edge” over all of its neighbors combined.
. . . .
Go to Google and type in “H.R. 4133.” You will discover that, apart from a handful of blogs and alternative news sites, not a single mainstream medium has reported the story of a congressional bill that might well have major impact on the conduct of United States foreign policy.
H.R. 4133, the United States-Israel Enhanced Security Cooperation Act of 2012, was introduced into the House of Representatives of the 112th Congress on March 5 “to express the sense of Congress regarding the United States-Israel strategic relationship, to direct the president to submit to Congress reports on United States actions to enhance this relationship and to assist in the defense of Israel, and for other purposes.” The American Israel Public Affairs Committee (AIPAC) reportedly helped draft the bill, and its co-sponsors include Republicans Eric Cantor and Ileana Ros-Lehtinen and Democrats Howard Berman and Steny Hoyer. Hoyer is the Democratic whip in the House of Representatives, where Cantor is majority leader. Ros-Lehtinen heads the Foreign Affairs Committee.
. . . .
A number of congressmen spoke on the bill, affirming their undying dedication to the cause of Israel. Rep. Ron Paul of Texas was the only one who spoke out against it, describing it as “one-sided and counterproductive foreign policy legislation. This bill’s real intent seems to be more saber-rattling against Iran and Syria.” Paul also observed that “this bill states that it is the policy of the United States to ‘reaffirm the enduring commitment of the United States to the security of the State of Israel as a Jewish state.’ However, according to our Constitution, the policy of the United States government should be to protect the security of the United States, not to guarantee the religious, ethnic, or cultural composition of a foreign country.” (Read more)
Rational meets mysticism. UFO’s and Climate Change.
Steffen’s videos are getting better and better.
Greek Politicians speak disaster and more free stuff
From Patrick Barron:
From today’s Open Europe new summary:
Former Greek PM warns of “vortex of self-destruction” if Greece leaves the euro
The FT reports that former Greek Prime Minister Lucas Papademos has warned that Greece would enter a “vortex of self-destruction” if it left the euro. Papademos suggested inflation could hit 50% while real national income could fall by a further 20%. Separately, Syriza leader Alexis Tsipras said yesterday that if he wins the next election he will not fire any civil servants, scrapping the current pledge to cut 150,000 public sector jobs by 2015, agreed under the bailout programme.
There is no better illustration of the destructiveness of the European common currency, as currently constructed, than these statements. One Greek politician predicts chaos in Greece if the euro subsidies stop, and the other states that he will do nothing to reform the Greek economy. These statements expose the destructive forces of what can only be described as a socialist currency–the euro.
U.S. erects prison walls as Facebook entrepreneur gives us citizenship
I really liked Steffen Molynieux’s observation that these actions totally blow away all that bullshit about a social contract. Leftists like to say, if you don’t like it, leave. But now the government says, you can’t!
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Internet message boards bristled with denunciations of Saverin’s “treachery” and promises to renounce Facebook. “Way to defriend America, [expletive deleted],” one annoyed American taxpayer tweeted. Another Twitterer, who happened to be outspoken rich guy Marc Cuban, told his followers that “if i could realistically stop using facebook, … I would. Just wrong.”
(MORE: This is your Life (According to Your New Timeline))
The story behind Saverin’s move is a little more complicated than the headlines suggest. The Brazilian-born, Singapore-based investor with the cherub face was one of Mark Zuckerberg’s original backers during Facebook’s Harvard days; while no longer involved in the company as an executive, he retains a 4% stake, which could be worth as much as $4 billion after Facebook goes public.
There’s no question that by giving up his American citizenship and settling down in Singapore, an investor-friendly tax haven with no capital gains taxes, he’ll spare himself a hefty bill from Uncle Sam. He’s not going to escape the IRS entirely, though; the US charges citizenship-renouncers an “exit tax” which could add up to as much as $150 million in his case, one tax expert contacted by the Los Angeles Times estimates.
Saverin maintains that his renunciation of American citizenship, which actually took place last September, wasn’t a ploy to skip out on American taxes, but rather an attempt to free himself from burdensome restrictions on American investors abroad. “U.S. citizens are severely restricted as to what they can invest in and where they can maintain accounts,” the Wall Street Journal quotes a spokesman for Saverin saying. “Many foreign funds and banks won’t accept Americans. This was a financial rather than a tax motive.” (Read more)
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Ilyse Hogue of The Nation is incensed:
In making this decision, the Brazilian native did more than expose his blind disregard for all that his adopted country has done for him. He has made himself the poster child for the callous class of 1 percenters who are all too happy to use national resources to enrich themselves, and then skate, or cry foul, when asked to pay their fair share. The story evokes the image of the marauding aliens from the movie Independence Day, who come to Earth to take what they can get before moving on to another planet.
Wait a second! Did Eduardo Saverin plunder us? Are we now a desolate husk of a country, sucked dry by Eduardo Saverin’s rapine? Well, no. Facebook created wealth. Mr Saverin is leaving having deployed his capital in a manner that made America better off than it was when he arrived. But will he escape without rendering unto Caesar what is Caesar’s? Well, no. Both Mr Manjoo and Ms Hogue mumble in passing under their breath while coughing that Mr Saverin will have to pony up an “exit tax”. So what’s this woefully insufficient tribute come to, such that Mr Saverin may be so bitterly denounced for exploitation and despoilment? According to Danielle Kucera, Sanat Vallikappen and Christine Harper of Bloomberg:
Saverin won’t escape all U.S. taxes. Americans who give up their citizenship owe what is effectively an exit tax on the capital gains from their stock holdings, even if they don’t sell the shares, said Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan’s law school. For tax purposes, the IRS treats the stock as if it has been sold.
Got that? Mr Saverin’s on the hook for the amount his capital-gains tax would have come to had he sold all his American stock holdings. Tim Worstall sketches it out on his napkin:
[T]he net effect of his citizenship renunciation on his immediate tax bill is to increase it, hugely. For it will, at minimum, start with the idea that he’s just made a $3.5 billion or so profit (adjusted downwards for the difference between the private market value of Facebook last fall and the IPO price) on his Facebook stock which he got originally for minimal amounts of money. At the standard 15% long term capital gains rate that’s near $500 million right there.
Half a billion dollars! That is not scot-free. Did the marauding aliens in “Independence Day” leave behind a half billion American dollars after having successfully invested in Earth? They did not! One wonders how many pounds of flesh Mr Manjoo and Ms Hogue think Mr Saverin owes for the privilege of having Uncle Sam’s hooks out once and for all.
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Senator Charles Schumer: Eduardo Saverin Can Never Set Foot in U.S.
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Ron Paul: The Egregious Ex-Patriot Act Has No Place in a Free Society
Pig Tusks Used as Money
I strongly disagree with the title of this video, “How Humans Are Supposed to Live.” But it’s interesting to see one of the most unique commodity monies (i.e. real monies) I have ever heard of.
Illegal Immigrants getting tax refunds
“Across Italy police are cracking down on Ferrari and Lamborghini drivers [because they are rich]”
Across Italy police are cracking down on Ferrari and Lamborghini drivers, but not because they are driving too fast. Italy, like so much of southern Europe, is drowning in debt, so police are pursuing drivers to make sure they are declaring – and therefore paying taxes on – earnings that would allow them to afford cars worth as much as half a million dollars.
The targeting is part of an ongoing war on tax cheats, an attempt to shore up $2.5 trillion of the country’s public debt and change a culture that has often prided itself on avoiding taxes. Tax authorities have long carried out much-publicized checks on owners of luxury cars, yachts, even nightclubs that don’t issue proper receipts. But since the unelected, technocratic government took power in November, it has made enforcing tax collections a priority. (Read more)
Atlas will shrug.
Europe’s worst fear: Spain and Greece spiral down together
In a season of nightmare projections for Europe, this one could be the scariest: Greece leaves the euro currency union at the same time that Spain’s banking system is collapsing.
In many ways, the market convulsion last week was a test run for those crises, as political deadlock in Greece and mounting fears over the health of Bankia, one of the largest consumer banks in Spain, converged. . . .
The money available to Europe within its main bailout fund, about 780 billion euros ($997 billion) would not be enough to handle the twin calamities of a Greek euro exit and a Spanish banking implosion.
And despite recent statements from Germany and leaders of the Group of Eight industrialized nations to encourage economic growth in the eurozone, Europeans may have little desire to continue financing the debt disasters of other countries.
“When you have Greece and Spain happening at the same time, the problem becomes exponential and very, very dangerous,” said Stephen Jen, a former economist at the International Monetary Fund who runs a hedge fund in London. “So far, the policy has been to buy time and build a firewall – but that just makes the cost bigger. There is just no good ending here.”
The numbers do look dire. (Read more)
Let the banks who made bad loans fail!!!!
Danger lies in that they made the bad loans to governments, and government have a lot of guns.
An undergraduate takes-down Paul Krugman
Paul Krugman gave up being an honest economist a long time ago – shortly after he learned that the cool crowd gave him more attention when he conjured up economic-like arguments to support the left’s irrational view of the world.
His most recent piece of propaganda claims that increased national debt causes economic growth. He supports his claim by looking at 5 countries and showing that the countries with higher debt levels grew faster over the last 3 months. Thousands of Krugman zombies must have been elated to finally see hard evidence that the 1% aren’t any smarter or harder working: All you have to do is take on a lot of credit card debt.
But an economic Jedi — an undergraduate from the University of Illinois — uncovered the subtle flaw in Krugman’s logic: The earth has more than 5 countries, and the world wasn’t created 3 months ago. The student used a graph posted on his Facebook page to show that if you look at the 21 largest countries over the past year, you see a strong, clear relationship: Economies with higher debt grow less.
(Read more)
Is Austerity to Blame for Europe’s Economic Woes?
The fact that his argument even needs to be made is pretty depressing.
Obama: JPMorgan Is ‘One of the Best-Managed Banks’
ust hours after a top JPMorgan Chase executive retired in the wake of a stunning $2 billion trading loss, President Obama told the hosts of ABC’s “The View” that the bank’s risky bets exemplified the need for Wall Street reform.
“JPMorgan is one of the best managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost $2 billion and counting,” the president said. “We don’t know all the details. It’s going to be investigated, but this is why we passed Wall Street reform.” (Read more)