I remember when one time Bud got a raise, and by the end of the month, he was in a different tax bracket and bringing home LESS than before the raise!! It blew us away. I've been contemplating Ann's recent post on the minimum wage being, for instance, $15.00 an hour. My first thought was this is typical government trying to make Congress look good in the eyes/mind of the labor force. But in all reality, it's just a way of collecting more money in taxes withheld. I can't help but be skeptical. It's the way the USA government operates. Hear me out. You may not agree, that's okay.
My thought behind this minimum raise hike is...larger paycheck for the worker [not really all that much if calculated correctly, I'll explain that in a bit] and then...larger pay, more Federal Tax withheld from each check.
And, not to mention cost of living will skyrocket because of the pay hike...and the worker will be in the 'same boat' as before a minimum wage increase!
Okay, for example. Say you work 40 hours a week at $15.00 an hour. A monthly pay before tax withheld is: 160 hours a month times $15.00 equals $2400 a month. Commonly, depending on your filing status [single, married, dependents], the average is 10% [per cent] Federal Tax withheld. That's $240. [multiply THAT by the millions of workers in our country and the total is mind boggling] IF that is all that is deducted [but there is MORE ...i.e., state income, insurance, Medicare, etc.] Now, let's go with the example of $7.25 an hour...40 hours a week at 4 weeks a month, pay $1160. a month. 10% [per cent] FIT would equal $116!! If minimum wage would be raised to $15. an hour, that would more than double what the government would collect from you. Government wins!! It's not about being 'good' for the people, it's being good for the government!!
And my previous point of explaining further for the workers which in turn are also the all American consumers...with minimum wage increase drastically, so will the cost of living. Groceries, gas, home mortgage, cars, insurance for home owners, rent, day care expense for those that have small children so parents can GET to work, etc. etc. etc. Again, it's labor force/consumer: lose ...government: wins!!! And further, ya...you do file tax returns and if lucky, get a refund. But, all year long as the government collects your taxes monthly this money is invested to make tons of interest...again, government wins. It's like we all walk around with a big "L" on our foreheads for "loser" and the government is literally, laughing all the way to the bank.
Ps....hope I did my math correctly. If not, I apologize. I'm just trying to get my thought written down about pay raise for minimum wage.
I have a friend who lives in Denmark and she boasted about the free medical ["not a cent comes out of our pocket when seeing a doctor or hospital visits"] in their country! That too is all well and good, but guess what? Their taxes are so high it's hard to make ends meet no matter what the minimum wage is; other countries are considered a tax haven. But, again, their government wins. Boast about the "free" medical, high tax, it really equals out to the same situation as here in America, dollar-wise. From the internet:
- Does Denmark have the highest taxes in the world?
People living in Denmark pay some of the world's highest taxes - up to half of their income. On top of this, Danes pay a 25% value-added tax on most items, and a tax of up to 150 % on new cars. But most Danes will tell you that they are happy to pay taxes because they can see what they get in return.
One more thing, if employers are forced to pay the $15 minimum wage to even part time employees, rest assured the employers will be laying off/firing many workers 'cause they can't afford to pay the wages...in turn, more set backs for the labor force. Anyone with just a lick of common sense and economy 'know-how' can figure out the outcome of such.