House Democrats Threaten Workers with Higher Corporate Income Tax

Huh? Why would Democrats want to threaten workers, and how the hell does the corporate income tax impact them?

Here’s what Democrats are planning:

Rep. John Yarmuth, the new House Budget chairman, said his chamber’s budget blueprint will aim to claw back lost revenue by boosting the corporate tax rate from its current 21 percent to as high as 28 percent… he anticipates the budget resolution will envision changes to the 2017 GOP tax overhaul, including raising the corporate tax rate above its current 21 percent. “…We’ll see how much revenue we can get out of it.” The rate was 35 percent before it was cut in the GOP tax bill.

 

Here’s how the higher tax rate impacts workers:

 

Whole thing here.

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Minimum Wage Adverse Impact on People

A study from Denmark:

This paper estimates the long-run impact of youth minimum wages on youth employment by exploiting a large discontinuity in Danish minimum wage rules at age 18 and using monthly payroll records for the Danish population. …On average, the hourly wage rate jumps up by 40 percent when individuals turn eighteen years old. Employment (extensive margin) falls by 33 percent and total labor input (extensive and intensive margin) decreases by around 45 percent, leaving the aggregate wage payment nearly unchanged. Data on flows into and out of employment show that the drop in employment is driven almost entirely by job loss when individuals turn 18 years old.

A landmark restaurant closing in Boston, MA:

One of Boston’s most historic restaurants is closing its doors…Durgin-Park in Faneuil Hall…disappointed customers are trying to get in their final meals. …”This is another passing of a great institution,” said Berg. Rachelle Mazzone is Durgin-Park’s bartender and says dozens of long-time workers were told the restaurant would be closing next weekend. She was told it’s no longer profitable. …According to Ark Restaurants CEO Michael Weinstein, the restaurant wasn’t profitable anymore. He says…increase in minimum wage and health care costs…were all factors in the restaurant’s downfall. …Since 1827, the business attracted faithful diners and tourists to its Faneuil Hall location, winning several culinary awards.

Three restaurants in St. Lawrence County, New York:

The rising minimum wage is getting at least part of the blame for the abrupt closure of three St. Lawrence County restaurants. …About 60 people have lost their jobs. “The minimum wage increase has been a big burden on our business. At one point we were up to 100 employees and the minimum wage has just increased every year since I opened in 2009. It’s been harder and harder to do business in New York state every year,” said Marc Morley, owner of the restaurants. …Morley said he told the restaurant managers to notify the workers. “They held all the contact information for all their individual employees,” he said. “It was an abrupt decision on our end. It wasn’t something we were planning on doing. We just got to the point where the businesses weren’t profitable and we were losing money every week.”

A study on the higher minimum wage in Minnesota:

Beginning in 2014, the state of Minnesota began a series of minimum wage increases. …While the effects of minimum wages changes remains a controversial topic, comparing relative outcomes in Wisconsin and Minnesota suggests that the minimum wage increases led to employment losses in Minnesota, particularly in the restaurant industry and youth demographic most affected by the changes. …Following the minimum wage increases limited service restaurant employment fell by 4% in Minnesota relative to Wisconsin. Further, youth employment fell by 9% in Minnesota following the minimum wage increases, while it increased by 10.6% in Wisconsin over the same time period. In addition, part of the increased wage costs employers faced have been passed on to consumers through higher prices. The relative price of restaurant food in the Minneapolis metro area had fallen by 2% in the four years preceding the minimum wage hikes, but it has risen by 6% in the four years since.

 

And the hit on black teens:

…economists William Even from Miami University and David Macpherson from Trinity University report that when a state, or the federal government, increases the minimum wage, Black teens are more likely to be laid off. The duo analyzed 600,000 data points… The report focused on 16-to 24-year-old males without a high school diploma and found that for each 10 percent increase in the federal or state minimum wage employment for young Black males decreased 6.5 percent. By contrast, after the same wage boost, employment for white and Hispanic males fell respectively just 2.5 percent and 1.2 percent. The real hit for Black teens occurred, however, in the 21 states that had the federal minimum wage increase in 2007, 2008 and 2009. The findings reveal that while 13,200 Black young adults lost their jobs as a direct result of the recession nearly 40 percent more, a total of 18,500, were fired because of the rise in the federal minimum wage.

Read the whole thing.

Black Teens Are Fired When the Minimum Wage Rises

From BET via Glenn Reynolds:

It is no surprise that Black teens, 16- to 19-years old, are disproportionately unemployed. At the Great Recession’s bottom, African-American teens had an unemployment rate of nearly 50 percent while the rate for all teens was 27.1 percent. In the weak post-Recession, many teens compete for jobs against down-sized adults with college degrees.

And economists William Even from Miami University and David Macpherson from Trinity University report that when a state, or the federal government, increases the minimum wage, Black teens are more likely to be laid off. The duo analyzed 600,000 data points, which the Employment Policies Institute says included “a robust sample of minority young adults unprecedented in previous studies on the minimum wage.”

The report focused on 16-to 24-year-old males without a high school diploma and found that for each 10 percent increase in the federal or state minimum wage employment for young Black males decreased 6.5 percent. By contrast, after the same wage boost, employment for white and Hispanic males fell respectively just 2.5 percent and 1.2 percent.

Reynolds’ conclusion: Like so many things pushed by unions, the minimum wage is a racist barrier to entry.