Forum Post: Profit Cap will stop the 'Ship from Sinking!'
Posted 10 years ago on June 3, 2013, 4:15 p.m. EST by ProblemSolver
(79)
This content is user submitted and not an official statement
..and create a rising tide for all ships ..
A cap on profits will prevent financial ruin for everyone.
The benefits don't outweigh the negatives. A profit cap would reduce a companies ability to hire people and take away the incentive to excel by vastly reducing the amount of money a company can make each year. It would harm the 99 percent that it was supposed to protect.
Here , listen to this, There is a pile of stagnant money right now .. in the billions ..possibly trillions.. if that money were still in the hands of the consumer at the end of each week .. they would be out there shopping stimulating the economy ..and every business would be booming. .. but it is not in the hands of the consumer .. the consumer is broke and businesses are failing because of it... due to high profits ..
The consumer is willing to spend money .. on this surely we both agree. And the Government spends money like a drunken sailor.. we all know spending money stimulateds the economy .. but the consumer and the Government are both deep in debt.. but the 1% with all the wealth .. are not spending money .. they have it all ..and they are looking for consumers to increase their wealth .. but their are no consumers .. to rape and pillage ..for no less a better term.. so here we all stand .. but if, the re was a cap on profits .. all that money would not be piled up on top .. it would be in the hands of the consumer where it does the most good for everyone .. creating jobs and stimulating the economy .. It is not the wealthy that creates jobs , it is the consumer.
I agree that the consumer creates jobs, however how will the consumer spend money if he is fired from hi job because of reduced profits? Also, a companies profits would never increase if it continually worked at top efficiency with a profit cap, it would simply make the corporation a slave of the state. Also, it is high profits in companies that pull us out of economic trouble by decreasing unemployment. If you cap that, then you also cap our ability to recover, and give businesses only the option to decline while simultaneously limit ing how much they can succeed.
If the price of an auto mobile drops due to a cap on profits .. their would be an increase in auto sales .. now why would the auto manufacture fire there workers if there is an increase in sales ? Your logic is not sound.
A corporation profit would not increase? Look at the wealth spectrum .. corporations have an extreme amount of wealth .. and workers are poor. a cap would merely even the tables somewhat.. The Cap is not designed to kill the corporations .. that would do no good .. the cap is merely designed to level the wealth distribution .. and allow a rising tide for those whom need it the most. Because currently the course we are on there is no hope in sight for economic recovery .. we must make some changes .. A Cap on profit is the best change we can make at this point.
High profits pull us out of economic troubles ? It was the high profits that destroyed the economy. Had profits been capped we would all be living a healthy standard..
It wa not high profits that increased employment.. it was high sales .. and again to have high sales you need consumers .. making high volume purchases .. high profits stall sales volume .. decreasing employment ...
The finger on the pulse is in stopping the high profits.. that is where the money is leaving the economy .. it is out of circulation .. we must stop the out flow of money and keep it in circulation by means of a profit cap .
thanks and good night
money leaves the economy through loan interest
money is borrowed to start the business
money is created to loan to the business
the business pays back that created money plus loan interest
it's a negative sum game
Also, the economy actually has been growing. Recently under the current system.
Look, I don't understand why you think high sales doesn't equal high profit. If you sell a ton of stuff all at he same price then it will increase your money supply. This is a fact. Also in what way do high profits stall sales volume? If anything they would allow the company to expand and increase sales volume.corporations have extreme wealth because they, unlike the individual they depend on, are designed to make money.also, while there are some poor workers, many workers are doing fine under the current system. Once again if a company is making a lot of money and the. Has its profit level capped then it will have to adjust to the reduced profits by downsizing will will increase unemployment. But as you say, good night. ( sorry if that made me sound like a jerk, it wasn't supposed to)
"Also in what way do high profits stall sales volume?"
Would someone like to explain this ..
If I have 20 crates of milk all for 30 dollars each, and I sell that milk then my business gets more money. I can use that money to hire people or expand, which would increase my sales volume and as a result my profit.
..and how do you decide the amount of mark-up profit on your milk crates ?
You decide based upon your needs as a business, taking into account debt and wages while still maximizing available profit. After you have paid back your debt and have a surplus of money, you can use that to expand and increase volume of sales while lowering unemployment, or you can increase your workers wages and benefits to make your company more attractive to potential workers or investors. Unfortunately, I am almost at school and must stop for now, but I would like to continue our argument. If you reply, I will only be able to respond at about 3:30.
business, schmisness.
It's all about awards.
http://www.truth-out.org/news/item/16729-walkers-dismal-jobs-agenda-gets-a-gold-star-in-alecs-rich-states-poor-states-report
Rewards and awards motivate people to do better.
NO it doesn't.
In this case the award was for losing jobs.
Walker's just a Koch sucking asshole.
He's hurt wages, and JOB creation, more than anyone else in Wisconsin history.
Why do think some lame platitude negates that simple fact?
I agree that walker screwed up, but that is one example. The majority of job creators are motivated by money, which is the main source of greed.
The very same thing is happening in Michigan, despite a teabagge(R) tax increase.
Indeed, in spite of the auto industry rebounding.
Walker is hardly the only case.
Hell, if what are saying were true Wallyworld employees would be the highest paid in the World!
Guess what?
The average WallyWorld costs almost a million per store in tax payer subsidies.
Are you getting a clue yet?
You know there is no need to be rude, I am simply explaining my point of view.anyway I have to get back to class. See you on some other forum. Who knows, it might even be this one.
we live in a belief system where
it's not the work that needs to be done
it's that everyone must work
Yes everyone must work to keep the economy running and to do what needs to be done. Stop spouting philosophy and debate.
lol
more could be accomplished if we focused on product and not production
Product is the result of production. Production is more important because it is usually what creates jobs, and its quality determines the quality of the product.
jobs is god spelled backwards
You're thinking of doG.
doG is God spelled backwards.
That's old school thought.. it doesn't work anymore.. individual selfishness is frowned upon .. where at one time .. greed was success it no longer applies.
It does still apply. Greed moves people forward to achieve their goals. I'm not saying that its always fair, but it does work quite well.
The only goal of greed, is more greed.
That's why they call them greedy fucks.
And doesn't work so well, unless you are one of those greedy fucks.
GREED, is a disease.
It has a name and a pathology.
You could look it up, if you wanted to.
The goal of greed is to accumulate, and to do that there has to be a means of production which constantly improves. As a result, greed is what creates jobs, along with need of course.
LOL
I take it you have yet to take a look around?
If what you're saying was true.
Employment would be 100%+!
Guess what?
It's not.
Greed is a disease. It has a name and a pathology.
You do know what a pathology is?
Name one country in which there is one hundred percent employment which isn't a disaster. Also, I never said the system is without flaws.
Greed is a failed motivator.. look around you ..
The system of greed has encountered problems like this before and has always overcome them.
Where and when????
You could have fooled me.
Greed is a disease.
I'm just sayin'.
America has faced recession after recession and has still been a mostly successful country, and is a nation built on greed.
Discussion is over.
Very well. I should get back to my class work anyway.
overcome them how ? ..world wars ...
Incorrect, that was one war. Economic policies saved the greed system, policies based on greed.
When people are being paid the lowest possible rate of pay that they can survive on (often still requiring food stamps) high profits on sales will limit those who can afford to buy those goods with high profits on them.
We stuck in top drawing
By the way, I would like to apologize if my last post offended anyone. It was not my intention and I sincerely apologize.
Okay, your good. thanks
Your welcome. It annoys me when people turn debates into insult matches.
This is an important debate , I believe we can find a way out of this economic distress the world is in .. only with a few tweaks to the system .. but the important part is to realize the benefits of those tweaks .. because than we will be motivated to implement .
Clearly the people posting here didn't pay any attention to penguentos whole argument. He is talking from personal experience and is clearly well versed in business, unlike the rest of you. For once, I wish that you protesters would listen to what's being said to you. And by the way, I am in the 99 percent. I'm just an average middle class USA citizen who understands basic logic.
penguentos comments were well worthy of this post .. and he had a pleasant tone. Unfortunately he could not grasp , as with many, the concept of Cap on Profits. He just couldn't realize the benefits .
He grasped the matter fully, and simply did agreed with your point of view. The profit cap would limit a companies ability to hire people and take away the incentive to excel by creating smaller wages as an effect of limiting the amount of profit made by a company. I am only 13 and I know this.
people are driven by a desire to create
That is true to only a small extent. If your logic worked on a large scale then communism would not have been such a disaster. To get someone to work hard at something, the best incentive for continuous effort is in almost all cases money.
china did manage to feed its people
I hope that you haven't given up. It would be a shame.
I agree but my life is waiting for godot
I suppose we all are in a way.
Yes, but only after a series of famines coupled with the government corruption and inefficiency that goes hand in hand with the communist system killed off millions of people. It was only because of deng xiaopongs reforms that hurtled china closer to capitalism that that they were able to feed their people.
Please go back and read my response to the comment you refer to. Penguento did not fully grasp it ..he fell short a few steps and that is why he drew the wrong conclusion. with all due respect. penguento needs to understand the effects on the masses when there is a cap on profits .. think about this .. at the end of the week if the consumer is so strained by high profits can not make another purchase , orr if he has an extra $200 over the weekend because prices are kept low with an implemented cap .. what will the consumer do ? he will of course make one or two more purchases ..
The problem might be in understanding this:
High profits are not a measurement of a thriving economy.. instead high sales volume is a measurement.. why? because with high sales volume you have high job growth.. but with high profits , you have low sales volume ,and decreased job growth .. wrap your head around .. I'm done for now . thanks again .. discuss with penguento for a bit and see what you come up with .. see if you can understand the benefits would increase the companies production .
Thank you very much for the debate. It was very interesting and quite refreshing. I still disagree, but I suppose we all have the right to our opinion. Good bye.
I understand your point, but too many of our approaches to equality and fairness are based on impossibles
check out HJR29
&
OWS site http://corporationsarenotpeople.webuda.com
When we have a solution, we than find a way to implement it.
Are you suggesting we can not change some rules, and regulations? are you suggesting certain rules are "impossibles" to change ?
bensdad, mankind hasn't come this far by giving up on what may seem an impossibility.
A cap on profits is no more impossible than placing a man on the moon ..
Union YES!!
It's a wonderful way around a profit cap.
Be sure to repeal "right to work" in your State.
Goodnight everybody
If anyone would like to debate about this, please reply to this message with an argument.
Clearly you guys hadn't considered small businesses and such as part of this discussion; so I'll move away from them for a moment. I think you meant limit the profits of big, black hat corporations, say IBM or Boeing. So let's see what happens then.
Current corporate profit margins average around 6 or 7 percent of revenue. Let's suppose we pass a law that limits this to some arbitrary percentage of that, say 20%. We take the rest, 80 % of profits, as some sort of tax, or we limit the prices they can charge or whatever. Okay, what flows from that? Well, since profits are paid out as dividends, ipso facto you reduce dividends to shareholders by 80%. Also ipso facto, since the dividends are 80% smaller, the value of the shares is significantly reduced, and their price goes down.
Sounds great, and if the only shareholder in the world were George Soros, I'd agree with you that it really is great. And he's the one I think you're after. Unfortunately, he's not the only shareholder out there. He's not even the biggest one. The biggest single shareholder in the U.S. is CALPERS, the California public employees retirement fund. And right behind them in the line of people you've affected are every public employee retirement fund, every union retirement fund, every employer retirement fund, every 401(k) and IRA in the country. You just diminished their income by 80%, and the resale value of their equities by some very large percentage. And that income and resale are the source of the money they need to pay benefits to their retirees. Most public pension funds are underfunded as is, and you'd drive some of them, like Illinois, into insolvency. Result: Lots or retirees would see their pensions substantially reduced, others would see them vanish completely. All of these funds are absolutely, critically dependent upon corporate earnings to stay afloat and pay out benefits. And they'd all be screwed by such a scheme.
Thank you penguento for making one of the few logical arguments here.
The cap would have to be introduced gradual .. I see your concern .. and thank you for this comment .. just keep in mind , as what you say is happening .. a reduce in cost of living is also happening.. and that means more money in the pockets of the consumer..
Just remember the big picture .. 1% of the population have an estimated 90% of the wealth.. and that was all gained through high profits.. reduce those profits and the cost of living goes down significantly .. and as consumer prices begin to fall .. sales volume increases .. and this increases a demand on production.. creating jobs ! all from a cap on profits .. it raises all bots and in all honesty, it will be the big ships that will have to adjust .. they will need to stop handing out million dollar bonuses .. and cut back on other expenses .. they will have a lot of cutting to do before they come down to the medium level .. even to come down to the high level they have a long way to drop .. in the mean time all the other ships are rising ..
I don't think it's a question of reducing profits. I think it's a question of spreading them around more evenly. That's why I think employee ownership is good, as are things like profit-sharing. They give employees a stake in the success of the business, and reward them for helping make it a success. And the employees can then take that extra money and do the things you say.
Sorry, the root of the problem in a Capitalist free market system is excess profits.. this needs to be Governed.
Well, let's think about it for a minute. I start a business. In doing so, I risk everything that I have -- my house, my savings, my retirement savings, run up a bunch of credit card debt. I then work 80 or 90 hours a week for several years to get it up and running. During that several years, I make little or nothing, and if, as 75% of all businesses do, I go bust during that time, I lose it all -- house, savings, retirement; and I'm saddled with crushing debt.
Now, at the end of this long, miserable startup period, I start making money. But wait, now you're saying I can't keep the money I've worked all these years for the opportunity to make; and which I need to make up for years when I was struggling -- the second mortgage on the house, the miniscule or non-existent income, the lack of contributions to some sort of retirement plan for myself. My income caps out at say, the income I would be making as a mid-level manager if I'd stayed in regular employment (minus, of course, the money I didn't make all those years when I wasn't making much at all).
Why would I do this to myself? Regardless of any societal benefits, no one in their right mind would subject themselves to the incredible stress of starting up a business if at the end of the day, they didn't have the hope of making a whole lot more money than they were going to get working for the man every day, particularly given that long, lean stretch that comes before the money come, if it ever comes at all. If you think people wouldn't weigh those unlimited downside risks against your proposed limits on upside gains, you're kidding yourself. They'd weigh the risks, do the math, and if you limit the upside too much, they'd simply not try to open the business. So you'd rapidly squelch the business and job creation you need to build the economy and keep people employed.
I speak here from long experience, by the way. Everything I said above has happened to me, including near-bankruptcy, 100 hour weeks for $10,000 a year, $50,000 in credit card debt and the incredible stress that comes from wondering if you can make payroll and the next mortgage payment every month. I'm not speculating or exaggerating any of it a bit.
And there goes another crackpot comment = "Now, at the end of this long, miserable startup period, I start making money. But wait, now you're saying I can't keep the money I've worked all these years for the opportunity to make; and which I need to make up for years when I was struggling -- the second mortgage on the house, the miniscule or non-existent in"
You Just Started To Make Money. WTF makes you think you are making so much money that you are effected by the CAP. Totally Irrational Argument.
Or maybe you just don't understand how it works with small startups. I do. So you may want to study up a bit more before you start getting snotty with people.
It'd be great if your income progressed smoothly up the ladder -- 50k this year, 60k next year, and so on. Unfortunately, it often doesn't work that way. You struggle and struggle and just get by, and then if you're lucky, you get a few big payouts at the end, maybe only one when you sell it. So that million bucks you get when you sell the biz and retire represents the entire accumulated payout for years or decades of insanely hard work. Sounds like a lot of money, but amortized over the entire time you spent getting there, it's not all that much. But since it comes all at once, any cap hits it hard, unless you do long-term income averaging.
Please define....."insanely hard work".
Like 18 hours a day, seven days a week for months at a stretch, 80 or 90 hours a week for years at a stretch.
I knew a guy who used to do that. He walked out in front fork lifts, fell off platforms, fell asleep on the job, screwed up the job, got in arguments.........etc.
He wasn't too effective.
Lack of proper sleep, will do that to you, no matter who you are.
BTW, you are talking 126 hours a week. Do you think you might be exaggerating a little?
Nope. Not exaggerating. I had a stretch last year, where I worked from 9 am to 2 or 3 am, 7 days a week for three and a half months, eating at my desk. Did absolutely nothing but work, under some crushing deadlines, the entire time, and its not the only time I've ever had to do that by a long shot. 7 days a week, 70 or 80 hours, is the norm. Been doing that for 15 years.
You walk out in front of forklifts and such.
If you have to work that long, you lose efficiency.
At the same time, you must not be proud of what you do, or you would have mentioned what it was.
Then again, about the only people that put in those kinds of hours are drug dealers.
You obviously don't hang around much with people running small businesses or start ups. Very long hours are the norm.
Welp, I guess we now know why so many of them fail so quickly.
Lack of sleep and amphetamines.
Of course you never did say what small business, which of course leaves speculation wide open.
Then there's the small business woman I know who did all right with her coffee shop and didn't sell, until she recently, had her third child.
She never put in those kinds of hours. Plus she's still married.
Good for her. She's the exception.
She is smart enough to get adequate sleep.
So if that makes her an exception then I guess it does
Everyone I know who put in that kind of overtime is divorced.
Speaking of sleep.
I'm gonna go get me some.
G'night.
I think it likely that the whole story is fiction.
I'm thinking........18hrs a day, 7 days a week and he still has some hours to kill in here?
OK, .........um how much methedrine would he have to do?
Or does he pay someone to sleep for him?
I'm for real, about the guy who would work double shifts and walk out in front of forklifts.
People need sleep, or they start fucking up. I don't care who they think they are.
Oh but shooz it is only for 3 months a year - I am sure with a judicious use of crank that it would be no problem - as long as someone has a dart gun loaded with a heavy tranquilizer when U went psychotic.
Gotta keep up with the Jones, whatever it takes.
Those kinds of hours are great for divorce lawyers.
You betcha by golly - hmmm - are they a write off on taxes? Business expense?
Only for those guys on Wallstreet that keep a box of lawyers on hand for whatever they need them for.
The little guy who works far too many hours?
Nope. He gets to pay, and child payments and alimony will keep him working those hours for the rest of his days.
You can do it alright, if you're motivated. It's not fun, and at the end, you're wiped out, but it can be done. I'm not doing it at the moment, though. That's why I have time to waste here tonight.
It's why so many fail.
Lack of sleep.
As the Frenchman, used to tell Jason Bourne, "Sleep is a weapon. Use it."
Without sleep, you walk out in front of forklifts, if only metaphorically.
I agree completely. But owning a business, you discover quickly that your customers aren't really concerned about your sleep. They're concerned about their deadlines.
Everything you've said so far, just explains who so many systems are in trouble these days.
Slow networks, broken archaic systems.
No sleep=less than optimum operation .
You can pretend it doesn't, but EVERY study proves it's so.
Well, the systems are often broken, you're certainly right there, but they're not broken because I'm not sleeping enough. I'm awake late at night solving the problems that are already there. As to why they don't work right, that's a very, very complicated issue. If only it were as simple as people sleeping more. If it were as easy as all that, I wouldn't have a job.
What deadlines?
Why are you being so evasive?
If you are on a flight and your pilot hasn't had proper sleep, you should be afraid...........VERY afraid.
I work hard, and I deserve more than others
We do something related to big computer systems. Contrary to your insinuations, it's a completely legit business, complete with business licenses, workers comp policies, E&O insurance and all the rest.
Trust me, you start working with big computer systems, you'd better get used to long hours, lots of deadlines and lots of stress. Comes with the territory.
Neither my business nor my bank account require your validation. Nor do the realities of running a business. So you can think anything you like, because it's irrelevant to anything that matters.
I love sweeping statements
The Base production employee? Doing major hard labor? Yep - quite typical - and then left out of the success consideration most typically.
The things employees do on a daily basis to make a business successful???
Edit: the things that the Base of the WORKING employes do on a daily basis.
And then when they retire, the corporation takes away, or limits their pension.
I like how they quit paying whatever amount you're getting from your SS account.
they lean all over us.
Yep - nothing new really - just additional programs to pillage in this day and age.
Did you see today's BIG number??
http://www.democraticunderground.com/1017122796
BTW - very tweet worthy.
DKAtoday @DKAtoday
Pic Of The Moment: Today's Big Number - Democratic Underground http://demu.gr/1017122796 I think overall that 900,000 is a low Nat. Avg. Expand
I didn't see that today but did comment on it with GF yesterday. Considering the number of employees they have and their poor pay practice - I am pretty sure that they are costing the tax payer in their operational areas - quite a bit more then 900,000
Those are just costs related to labor.
they rip us in ways much more devious than the obvious.
Well I was just thinking that cost of living in Sconny is pretty reasonable - so figuring health care and transportation and housing aid along with food stamps - well You know.
California is apparently trying to put an end to it.
http://www.forbes.com/sites/rickungar/2013/06/03/california-to-wal-mart-enough-no-more-taxpayer-subsidized-profits-for-you/
AWESOME - TWEET - even though it is only a start on what those retailers are raping the public and their employees for.
DKAtoday @DKAtoday
California To Wal-Mart: Enough! No More Taxpayer Subsidized Profits For You - Forbes http://onforb.es/14bk4Sk AWESOME 49 states to go View summary
It's something positive anyway, and those BIG retailers aren't happy about it.
Now to get the other 49 States on board, and you know those retailers are going to try and use the fact that the others haven't jumped on board as a defense.
Let em raise a ruckus it will just speed up the proper reckoning.
[Deleted]
Ahhh, the worklife of middle management.
It's hard knowing who's ass to kiss and when.
[Deleted]
Middle mangers have been like that since before we ever heard of capitalism.
Besides, a true "capitalist" lives on his "investments". He doesn't get anywhere near doing actual work, or even much in the way of management. He may dabble, but he mostly hires people to do all that.
[Deleted]
Unions help keep that kind of thing to a minimum.
Support one today!!
Union YES!
I seriously doubt that a cap would affect your buisness at the point when it 1st starts making money - unless of course you are wildly successful in your make money moment - then - I would not expect a cap to be detrimental to you at all. You have already paid off your loans for the start-up at this point as well as being ahead of operating costs. So - NO - I think you are being irrational.
I didn't say it affects you the moment you turn profitable. What I did say is this: You start a business, you'll make little or no money for some extended period of time. Then you start to make a bit of money, maybe even a decent living, if you're lucky. But the real payout, if there is one, is likely to come in a few big chunks, maybe only one, right at the end.
Example: you want to own a taxi in New York City, you buy a medallion. They're limited, so one will cost you several hundred thousand dollars. The amount of money you can make in a taxi is limited by the legal fare limits and the number of fares you can run in a day, so your income is absolutely limited by the number of shifts you can drive in a week, and out of that come all the maintenance and repair costs for the cab, fees to the cab company and so on. If you rent your cab to other drivers, you can add a bit more, but not much -- the other guy's got to make a living too. And of course, your maintenance costs go up then too. Bottom line, you're going to spend 30 years driving 12 hour shifts and you aren't going to get rich, by a long shot. It's a living, nothing more.
Your one big payout comes when you sell that medallion to the next guy. That's your retirement fund. So that last year, you make maybe 50k driving, sell the cab for 25k and the medallion for maybe 500k. That's nearly 600k on your tax return. All of a sudden, you're 1%er, and any income limits make your retirement a lot less prosperous. Even as it is right now, you'll take a massive tax hit on that kind of money, and the fact that you spent 30 years getting to that point doesn't affect it a bit.
I taxi worker must be paid by people that already have money
Matt pretty much every comment U make is asinine.
the difference between working for others money
and having money to get others to work is asymptotic
Then I would say you are running a gambling house instead of a proper business that is consistent and shows a steady output and growth.
Only apparently your gambling house is run poorly as the odds are always in the houses favor.
Try it sometime. See how it works for you.
I was a part of management for over twelve years - during that time we saw no less than 20% growth per year - and you know who got left out of the rewards for success and continuous quality? The Base Worker - doing the real job.
If you are working those kinds of hours - as the owner(?) - well then I can only say you picked the wrong business to be in - or a very poor at your job.
JohnFlynn does raise a good point. If you were management, why did you leave the workers out in the cold when your profits were rising so steadily every year? Your profit after 12 years was nearly 9 times what it was in year 1. Seems like you could have shared the wealth a bit. If you objected to the workers being left out, why did you stick around for 12 years? And if you weren't the owner, but weren't yourself there working all the time, how would you know how many hours the owners worked after you left or before you got there, or on the weekend, or remotely from their homes?
1st line management does not have a say in who gets what - as an owner(?) you should be very well aware of that fact.
We aren't running on that model. We're running a workers' cooperative here. Everybody gets paid the same, everybody has a say in management, everybody works long hours. If we ever cash in big, everybody gets an equal split.
That's what you are doing? Right Now? And you are working those kinds of hours and are just getting by? Sounds like you ain't running things very well. You say for 15 years? What kind of growth are you averaging - a lot of businesses are happy to make 3 to 5% per year growth.
We're running them just fine, thank you. This is one of those situations where the money doesn't come in a nice, smooth, steadily increasing stream. The money comes in irregularly, in big chunks. And of course, there's always the potential of that big payout down the road. If I didn't think it was a real possibility, I wouldn't be doing this. I'd go get a regular job as a mid-level manager someplace.
And U R just as likely to go bankrupt before U ever have another Pay-out from Ur slot machine. Right?
Wait a minute - R U telling me that U R running a retail business - and that U expect to hit a pot of gold in a one shot happening? Instead of working for steady growth and consistent sales?
Damn - if that is the case - then U R an idiot.
sure jealous
mean while 2 of my contemporaries died
You don't read very carefully. I didn't say I was in retail. I'm not. What I said was, that in retail you make most of your money in the two-month run-up to Christmas. That's no great inside secret. It's common knowledge in business.
I may be an idiot, but after three years of hard work, we're paying base salaries well north of 100k, along with those distributions I mentioned, which should bring everybody close to 200k this year. How about you, smart guy? Does your business make that much for everybody?
It's amusing- you spent 12 years admittedly going after the brass ring and the big payout yourself, and it was a bust. We put together a co-op, and after a lot of hard work, we're succeeding and making it pay pretty well, and may make it pay even more, and you affect to be disdainful and insulting. You obviously don't know much about what goes into running a small business. And you're pretty obviously bitter about your own failure and jealous of our success.
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WTF do you think I did for 12 years I made less than half market value salary for the title I was given - every thing was going well before my 1st boss had to retire for medical reasons and prior to the president of the company retiring to a position on the board of directors. The new pres with my new boss went fortune 500 operation - rape the employee to get all the personal cash they could.
Shooting for a pot of gold R ya? Figures. U consider Ur self as a temporarily embarrassed wealthy individual? 15 years shooting for that pot of gold? What ya doin(?) playing pull tabs and the lottery?
And just as an FYI, we had one of those chunks come in a while back, so everybody got a 45k distribution on top of salary that month. And we'll probably do another one later in the year. So I guess it's working out okay. How about you?
flipping asinine lottery argument
That's how lots of businesses work. If you're down the totem pole too far, you don't notice it because they keep enough around to make steady payroll, but for the people up top, the swings are very large indeed. Anybody in retail will tell you that they make most of their money in a couple of big months every year. The rest of the time they're lucky to break even. I've been in situations where I was paying employees steadily every month, but did it by putting payroll on credit cards and not paying myself at all. Nowadays, our totem pole's horizontal, so everybody around here notices those swings pretty quick.
I take it that you'd never debase yourself by working hard for less money now in return for the opportunity to make say, $2 million five years down the road.
everyone has a say
Sure - and I advocated for the worker as well as for myself. But you got no pull you got no pull.
Actually, I'm regarded as one of the best in the country at what I do -- in part because I'm willing to work those hours when need be.
Sure, some businesses you can do that -- build it slowly and incrementally, and with it income. To imagine that that's the universal way of the world is, however, an indication that your experience in these matters is a bit limited. My taxi example's only one of many such instances, and you've conveniently ignored it.
Even a taxi has a standard level of income/business - just to keep a driver behind the wheel - and it should damn well be fairly consistent.
Oh, a taxi has has a standard level of business alright. I ride in New York taxis all the time, and I used to drive one myself in another city. Average fare is about $7, average ride time about 20 minutes. With tips, that's maybe $30 an hour gross revenue (leaving aside the time you're sitting at a cab stand making nothing or driving around without a fare, when you're losing money), out of which come taxes, maintenance and repair, gas, fees and everything else. Work a 12 hour shift and you can maybe gross $300-$350. Some days it'll be less. That's 100k or so as your maximum gross revenue if you work 6 days a week, which most guys do. When I was driving a cab 30 years ago, fees, gas etc. were worth about $120 a shift, they're probably more now. That leaves you maybe $200-$250 a shift of your own money, out of which you pay 15% self-employment tax, maybe 20% federal income tax, in NYC, maybe 10% state and local income tax. Like I said, it's a living, nothing more. Don't believe me? Go get a job driving a taxi. See how much money you make.
I've done much of the san diego airbus and bike cab
those jobs often and sub minimum wage
Sounds like more then I was making as 1st level management.
I'll bet that 50k take-home goes a lot farther in Coon Rapids than it does in NYC. That's barely middle class money there, maybe not even. And of course, no sick days, vacation, personal days or any of that. Miss a shift and you're out the money, simple as that.
I didn't take home anything like 50,000. I would have been living pretty if I had.
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If you were part of management, why didn't you reduce your salary to pay the base worker?
After twelve years they were paying me less then half of what my job titles pay was - borrowing on my 401K I was getting by.
I understand what you went through..
But if there was a cap on profits would what you have went through been .. different? that is the important question!
You see , right now the rich have stock piles of money .. tonnes of it .. but they are providing your business with enough customers.. so .. if there was a cap on profits ..lets speak retroactive.. if the past had a cap .. on profits .. all that huge pile of wealth at the top .. would be spread out amongst the people .. because of the cap on profits .. and people would be coming over to your business with actual money in their pockets .. and your business would have been more successful due to the simple fact that the greedy profits were capped and not allowed to bleed the people as strongly as they have.
And a 2nd consideration, the cap would not have effected you because you were 'under the caps limit..
and of course there would be an averaging of profits .. a forecasting method .. where you could have accumulated your allowable profits over the bad years .. when you were starting up .. and claimed those extra limits today ..
The main point of the cap profit cap , is that it distributes the money , in a rising tide' fashion .. and right now money is very tight amongst the masses .. which is very hard on all businesses .. but the money is out there .. unfortunately it's all in the hands of the few ..
which a cap would have prevented..
sorry for my grammer and poor punctuation
Well, if there was a cap on profits and it was low enough, I wouldn't bother starting a business. That's actually a serious problem -- admitted to by the government -- in Denmark, which pretty much does that. The income tax scheme there effectively limits your income to maybe 75k or so. After that, the tax man pretty much gets everything. So people don't work overtime, people don't take promotions if they think it'll involve more work or longer hours, people don't start new businesses. It's just not worth it, because the tax man gets all the extra.
In a little country with a homogenous population and steady population size, they can get away with that. But if you have a growing population and need new businesses, cap that upside and you'll discourage new businesses. Regardless of whether you think they should or not, people who start new businesses are looking for a big payout some place along the way, and if they think it's not there, they won't try starting the business.
Seems to me a better way is employee ownership. In Silicon Valley, for example, the tech companies give out stock options as part of everybody's compensation package. That aligns the employee's self-interest with that of the company -- the employee is now an owner -- and can add up to quite a lot. For example, I worked a project at one of them a few years ago, and a secretary -- not a big shot, just a regular old admin assistant - we were working with decided to retire and cash in her stock options. After working there 20 years for a very good salary and good benefits, those options gave her a cool million dollars to play with in retirement. And that's pretty common in Silicon Valley. If the company takes off the janitor can become a millionaire.
So I think that instead of limiting profits, the way to go is to cut everyone in on the action. Then everyone is motivated to have the company succeed.
The cap is not a set amount , it is a set percentage ..
Comparing profit cap to taxes is like comparing apples to oranges .. not even going there ..
How do you think billionaires became billionaires .. through huge profits .. that's how .. so a little cap ain't gonna hurt them .. but it will certainly do the world a whole lot of good .. especially will be good for small business due to the increase in customers .. volume will be high !
If you still disagree at this point , it can only be because you do not understand.
Well, if you cap profits, you have to have a mechanism for doing so. That means either price controls to limit what they can charge and thereby limit profits in the first place, or some sort of excess profits tax to take excess profits after they are made. If there's a third way, I don't see it.
And then, assuming this results in money to redistribute, you have to have a mechanism for doing the re-distributing. I don't understand what your mechanism is for accomplishing these things. What is it?
here is a simple example .. others ..are more complex.. when the middle man purchases a product from the manufacturer he has a set price. Now the middleman resells that product with an allowable CAP on markup . that's it. nothing else ..
The out come .. the consumer whether a booming economy or not, does not get over priced by a greedy middleman. How much should the allowable mark up be? It should be connected to The amount the government sets the sales tax .. this way if the government wants to stimulate the economy , they simply lower the sales tax a bit .. and this will also lower the profitCap .. giving consumers a buying edge and stimulating sales .. the rest you know. But just to make clear, the cap is not a price control .. or a limit as to how much the middle man can make in one day .. no no .. it is a cap on each sale by percentage .. example: a $100 sale with a 5% cap on profit would yield the middleman $5 on each sale .. now if sales volumes are high .. like 1000 sales per day .. that is a $5000 dollar total profit per day ..
The devil is in the details, and I'm not sure you've thought them through. Suppose I open a store and sell things. To stock it, I buy from wholesalers, up the prices some and resell what I buy. How much do I raise prices? And can you limit that to 5%? Well, let's think that through. You can't limit me to 5% -- my price increase has to cover the cost of my building, insurance, taxes, payroll, utilities and so on, and then give me a 5% profit on top of all of that. So how much would I have to raise prices in order to achieve that 5% profit? That's very hard to calculate in advance. What if some of my merchandise doesn't sell very well? I have to make it up on other things. What if I have to discount my prices with sales and coupons to get people into my store? Again, I have to make that up somewhere. What if my insurance company raises its rates? Any of a great many other things can affect it as well -- weather, the unemployment rate, a competitor opening up, etc., etc., and they're all pretty much out of my control. Again, I have to make them all up somehow if I want to stay profitable and stay in business. The bottom line, I can tell you from experience, is that it's very hard to predict in advance how much profit you'll be making. Sometimes you make more, sometimes less, sometimes none at all, sometimes you lose money. That's true even of very large corporations. So if you're going to limit profits, as a practical matter you have to do it after the fact with some sort of profits tax. You can't simply limit the gross margin on individual items. It wouldn't work.
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Good morning.
An uncontrolled mark-up on profits is what we have today. The Result: 1% own 99% of the wealth.
To add to your argument.. If a merchant buys domestic and has to compete with oversea prices it's even tougher yet .. but the merchant that buys overseas and has to compete with domestic prices makes a killing ! But, with a cap on markup .. the merchant buying overseas will see a huge reduce in profits .. thus consumers will have more money left over to afford domestic prices .. stimulating the economy.
Can you see the huge pile of profits .. made by excessive mark-up !!
Look at some of the posts with graphs about how the wealth is distributed .. the 1% have a ton of money .. and the bottom 40% have no money .. how did the 1% get all that money .. ? High profits !
The trick is figuring the correct markup. That's very hard to do a priori.
Right now, I'm not arguing about whether wealth is equitably distributed. For this discussion, we're assuming it's not, and we're trying to fix that. The practical issue is that it's difficult or impossible to achieve income redistribution by limiting the markup on products. There's no guarantee that any given level of markup will produce a given level of profit because there are too many variables. You may make a killing, you may make only a little, you may actually lose money. And this year will be different from last year and next year. If it were easy, all businesses would be consistently profitable, which is hardy the case. Even very large businesses go insolvent regularly.
Ideally , all business would be non-profit community owned. where the price of the product produced is the cost of production.. and the amount produced is based on demand.. no need for investors sitting on the sidelines.. taking the cream off the top while the community goes dry.. but to reach that point we must first implement a Cap on existing businesses ..
And how do you plan to cut Wallstreet, the commodities markets and hedge funders out of the picture?
Let alone those that produce supplies in far flung corners of the world?
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You better hire someone for that then, because you're not very nice.
All of this pointless bullshit, just because you don't like unions.
Sad, simply sad.
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Oh, goody, I can't wait.
You couldn't even solve the problem of union busting, and now you think you can take on the entire "investment" community with a single card??
They own the deck and they already own you too, or you would be backing unionization to the hilt.
The logistical nightmare reappears.....
As long as I can set the profit cap.
I am thinking the profit Cap will be set equal to sales tax.
..perfect, right !
Correction:
Last night I was tired ..and when I wrote this something felt 'out of place' .. hadn't looked at this in a while..
The connection should be related to Government interest rates .. as we know interest rates were at a near zero .. and why did the government do this? they lowered interest rates to try to stimulate the economy .. so ..if the profit cap was related to interest rates , as the government lowers interest , so would profits be lowered .. and whamo you have a huge economic stimulation.
thanks for listening
the government lowers interest
secondary private banks create money for loans to business charging interest
it's a negative some game
Walmart's profit margin isn't as large as you think. 3% to 5%.
http://ycharts.com/companies/WMT/profit_margin
What a ludicrous idea. Profit is the surplus left after a farmer harvests his crop, subtracting a portion for his family to eat and to plant next years crop.
How do you think the one percent gained 99% of the worlds wealth ..?
Through unfettered profits.. that's how !
farmers are not amongst the one percent..
A cap on profits will actually reduce a farmers expenses..
"How do you think the one percent gained 99% of the worlds wealth ..? Through unfettered profits.. that's how !"
They gained their advantage by unfairly dividing those profits. The solution is for the 99% to demand a fair share of the wealth they produce. Unionize, demand a living wage, and boycott businesses that refuse to cooperate.
They gained their wealth through a set of rules that allowed them to.
We simply need to adjust the rules . Cap on profits is the quickest fix to the problem. It's the 'silver bullet' it creates a rising tide that will consider all possibilities you mention .. for example .. a cap on profits would reduce living expense solving many poverty issues, and encouraging growth amidst the masses .. the rising tide .. would be a take off in a big way .. everyone would gain from a cap on profits .. and the extremely wealthy .. too
How does the wealth flow from the 1% to the 99%? Give a specific example.
Rather than a cap on profits, why not make X% (X being an as yet undecided number) of net profit returned to the people that created this profit. The "front line" workers. Say 1% for every 100 workers to a maximum of 65% regardless of how many workers are kept employed. This would create more expendable cash, because the people that get a share would spend it, hence the economy would get stimulated making it easier for the small business to succeed , while increasing tax revenues for gov't due to increased spending. I consider this fair distribution of earned capital for both the worker and the employer so the more profits a company earns the more cash gets returned to the economy. ( And the wheels on the bus go round and round)
"Say 1% for every 100 workers to a maximum of 65% regardless of how many workers are kept employed."
Not following this part.
these numbers aren't cast in stone , merely a suggestion of a possible breakdown where 1% of net profit is returned for every 100 workers to a maximum of 65% for 6,500 workers as a distribution cap regardless of how many employees an employer has above 6,500. Bear in mind that an actual fair distribution could be significantly higher or lower than the numbers I have used.
It wouldn't work in the big picture .. because the rates of the product would simply go up to accommodate for profit sharing. Same thing happens when taxes go up .. the business simply raises profits to pay the increase in taxes and the customer carries the extra cost .. .. where as a profit cap would limit how much the business can raise his prices .. limiting the burden on the customer ..that would work.
Even still, the smaller the business the smaller the cost of profit distribution, meaning that the larger employers would have to compete with smaller business or lose even more business. Part of the problem is big business is too big and has too much sway in the gov't so by making it less profitable to be big it becomes more viable to have several companies of 3,000 workers as opposed to one company of 15,000 workers. This would also reduce the effect of a failure of a company on a local economy by spreading out the area of effect of said failure. Meaning, instead of 15,000 jobs being lost in 1 city it would be spread across several cities. Maybe instead of "profit sharing" or a "profit cap" what is needed is an" employee cap" where 1 person, corporation, business entity etc. can only have so many employees before it has to " split" and create another independently owned business of the same type. Perhaps an amalgamation of all 3 suggestions would work. The problem is big business makes too much money and doesn't distribute if fairly amongst the people that create the profits.
Your not looking at the main objective..
The main objective is to more equally distribute the wealth that is being created. By incorporating " profit sharing" the laws of diminishing returns becomes more prevalent the larger the " business entity" grows because no matter how much it charges for its product 65% or whatever % is agreed upon is returned to people that will spend it further stimulating the economy and making small business more attractive. Your idea of a profit cap doesn't return profit back to the people that create the wealth it merely curtails the amount of profit that can be made, neglecting the imbalance of wealth distribution which, to me, is the problem.
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Is this reply to the proper comment?
You only have to step out of the box three times to see this jrhirsch .. not six or seven times .. like the experts do.. jus t three times .. but of course you like everything from inside the box .. such a small world you live in .. oh well many do .. many do ..
It doesn't flow from the 1% to the 99%, the cap prevents it from getting to the 1 % in the first place .. good lord .. if I have to explain this simple concept ..than you really have no idea what a cap on profits can do .. holy smokes .. I thought you were intelligent enough to understand the at least the basics of this idea .. jrhirsch .. after all you are a journalist .. you're supposed to be good at figuring out what is happening ..
The economic injustice that the lower 90% of Americans face is due to low wages. If we just cap profits, what insures those rerouted profits will go to where they're most needed? Will they go to back to their customers in the form of lower prices, and to the employees in the form of higher wages?
Or will the corporation pay even more extravagant salaries and benefits to it's executives, while increasing it's acquisitions of other businesses?
The proper fix is a floor for wages based on a concrete measure of our economy such as a percentage of GDP per worker. This insures that the people near the bottom at least get a reasonable share of the wealth they help create.
okay, last try.
Walmart is a middleman .. and is a billionaire. Walmart produces nothing but is merely a buy and sell middleman. Walmart pays a dollar and sells for three dollars .. We place a cap on this .. Walmart now pays a dollar and is capped at the current sales tax rate .. 7% Where is money 'rerouted ? the consumer pays less for the product .. The consumer no longer pays the huge mark up to Walmart .. the money is not rerouted back to the consumer..??? it never left the consumers wallet ? and now Mr Walmart is no longer a billionaire and everyone else ships have risen to the tide..
What if everytime you went shopping you no longer had to pay greedy inflated over prices .. Would you than say .. "hey , I don't have to no longer work those few extra hours every week .. and hey now I can afford to put my kid through college ... etc..
Face jrhirsch, High profits has pressed us all up against the wall .. a Cap on profits would ease the pressure on everyone .. and looking at the extreme wealth those at the top have .. it's time we turn off their tap .