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Please see the discussion on the talk page. | A maximum wage is a state enforced limit on how much income an individual can earn. This is a related economic concept that is complimentary to the minimum wage used currently by some governments to enforce minimum earnings. Both a maximum and minimum wage are methods by which wealth can be redistributed within a society. Image File history File links Unbalanced_scales. ...
A state is a set of institutions that possess the authority to make the rules that govern the people in one or more societies, having internal and external sovereignty over a definite territory. ...
Income, generally defined, is the money that is received as a result of the normal business activities of an individual or a business. ...
Face-to-face trading interactions on the New York Stock Exchange trading floor. ...
The minimum wage is the minimum rate a worker can legally be paid (usually per hour) as opposed to wages that are determined by the forces of supply and demand in a free market. ...
Wealth from the old English word weal, which means well-being or welfare. The term was originally an adjective to describe the possession of such qualities. ...
Young people interacting within an ethnically diverse society. ...
Advocates argue that a maximum wage could limit the possibility for inflation of a currency or economy, similar to the way a minimum wage may limit deflation. This limitation is achieved by using both pieces of legislation to implement an economy with wages that cannot inflate or deflate past the point of the relative maximum/minimum wage (respectively). Accordingly, wages in the economy would hover between the maximum and minimum, and the populace would live between the two wage points. Supporters say a maximum wage could also reduce devaluation of a currency by limiting the amount any member of the populace can earn, and consequently effectively limiting the availability of currency. Economists of the mainstream, if not dominant, Monetarism view would say that inflation is controlled by the growth in the money supply according to the quantity theory of money, rather than through growth in actual wages. Such an economist would believe that the argument made by the advocates of the maximum wage is therefore fallacious.[citation needed] Deflation (economics) Deflation (data compression) Deflation is the removal of loose soil by eolian (wind) processes This is a disambiguation page — a navigational aid which lists other pages that might otherwise share the same title. ...
Devaluation is a reduction in the value of a currency with respect to other monetary units. ...
Monetarism is a set of views concerning the determination of national income and monetary economics. ...
Money supply (monetary aggregates, money stock), a macroeconomic concept, is the quantity of money available within the economy to purchase goods, services, and securities. ...
In economics, the velocity of money refers to a key term in the quantity theory of money, which centers on the equation of exchange: where is the total amount of money in circulation in an economy at any one time (say, on average during a month). ...
Implementation Although no major economy has a direct earnings limit, some economies do have highly progressive tax structures in the form of scaled taxation.
Maximum Liquid Wealth A maximum liquid wealth policy restricts the amount of liquid wealth an individual is permitted to maintain, while giving them unrestricted access to non-liquid assets. That is to say, an individual may earn as much as they like during a given time period, but all earnings must be re-invested (spent) within an equivalent time period; all earnings not re-invested within this time period would be seized. Wealth from the old English word weal, which means well-being or welfare. The term was originally an adjective to describe the possession of such qualities. ...
As commonly used, individual refers to a person or to any specific object in a collection. ...
In business and accounting an asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or a group acting together, e. ...
Look up time in Wiktionary, the free dictionary. ...
This policy is only arguably a valid maximum wage implementation, as it does not actually restrict the wages a person is allowed to maintain, but only restricts the amount of actual currency they are allowed to hold at any given time. Proponents of the policy argue that it enforces the ideals of a maximum wage without restricting actual capital growth or economic incentive. A wage is a compensation which workers receive in exchange for their labor. ...
Proponents believe wealth that is not re-invested in the economy is harmful to economic growth; that actual liquid currency not re-invested timely is indicative of an unfair trade, in which an individual has paid more for a good/service than the good/service was worth. This stems from the belief that currency should represent the actual value of a good or service. This article or section does not adequately cite its references or sources. ...
A good or commodity in economics is any object or service that increases utility, directly or indirectly, not be confused with good in a moral or ethical sense (see Utilitarianism and consequentialist ethical theory). ...
Wikibooks has more about this subject: Marketing In economics and marketing, a service is the non-material equivalent of a good. ...
In general, the economic value of something is how much a product or service is worth to someone relative to other things (often measured in money). ...
When this policy is imposed, individual savings can only be held as solid assets like stocks, bonds, business, and property. Opponents argue that since a maximum liquid wealth policy makes no allowance for individual savings, it therefore assumes the non-importance of a bank and the loans that banks provide. Loans being essential to the economy, opponents argue, banks are an essential economic institution. Proponents of the maximum liquid wealth policy respond that government could be directly responsible for supplying loans to individuals; they also add that such an arrangement could result in vastly lower interest rates. Of course, proponents of a conservative (small) government would not find this situation ideal. The stocks are a device used since medieval times for public humiliation, corporal punishment, and torture. ...
In finance, a bond is a debt security, in which the issuer owes the holders a debt and is obliged to repay the principal and interest (the coupon) at a later date, termed maturity. ...
Wall Street, Manhattan is the location of the New York Stock Exchange and is often used as a symbol for the world of business. ...
Property designates those things that are commonly recognized as being the possessions of a person or group. ...
Banker redirects here; see wiktionary:banker for more meanings. ...
A loan is a type of debt. ...
This box: • • An economic system sucks(social institution) which deals with the production, distribution and consumption of goods and services in a particular society. ...
Interest is the rent paid to borrow money. ...
This article deals with conservatism as a political philosophy. ...
iDEAL is an Internet payment method in The Netherlands, based on online banking. ...
Relative Earnings Limit A relative earnings limit is a limit imposed upon a business, to the amount of compensation an individual is allowed, as a specific multiple of a company's lowest earner; or directly relative to the amount of individuals a company employs and the average compensation provided to each individual employee, not including a certain percentage of the company's top earners. The former implementation has the advantage of limiting wage gaps. The latter implementation has the advantage of encouraging employment opportunities, as increasing employment would be a way for employers to boost their maximum earnings. A compromise would be to base the limit upon the number of employees had to a specific company and the compensation of that company's lowest earner. Wall Street, Manhattan is the location of the New York Stock Exchange and is often used as a symbol for the world of business. ...
Compensation has several different meanings as indicated below. ...
Multiple is a comic book superhero in the Marvel Comics universe. ...
A percentage is a way of expressing a proportion, a ratio or a fraction as a whole number, by using 100 as the denominator. ...
It has been suggested that this article or section be merged into economic inequality. ...
For the album by the Kaiser Chiefs see Employment (album) Employment , one being the employer employee. ...
To moderate self-employeed individuals, the maximum would be based on the average compensation of the nation's employed (GDP Per Capita) and a specific multiplier.
Direct Earnings Limit A direct earnings limit is a limit placed directly, usually as a number in terms of currency, upon the amount of compensation any individual is allowed to earn in a given time period. A number is an abstract entity that represents a count or measurement. ...
Scaled Taxation -
Scaled taxation is a method of progressive taxation that raises the rate at which the principal sum is taxed, directly relative to the amount of the principal. This type of taxation is normally applied to income taxes, although other types of taxation can be scaled. A progressive tax is a tax imposed so that the tax rate increases as the amount to which the rate is applied increases. ...
A progressive tax is a tax imposed so that the tax rate increases as the amount to which the rate is applied increases. ...
An income tax is a tax levied on the financial income of persons, corporations, or other legal entities. ...
In the case of a maximum wage, a scaled tax would be applied so that the top earners in a society would be taxed extremely large percentages of their income. Modern income tax systems, allowing salary raises to be reflected by a raise in after tax income, tax each individual note of currency in each particular bracket at the same rate.[1] An example follows. Young people interacting within an ethnically diverse society. ...
The percent sign. ...
This article or section does not adequately cite its references or sources. ...
Calculations are made for the top of each bracket | Currency Bracket: | Dollars Taxed: | Rate: | Taxes: | After Tax Income: | Percentage of Income Kept: | | $1 - $40,000 | $40,000 | 15% | $6,000 | $34,000 | 85% | | $40,000 - $100,000 | $60,000 | 35% | $21,000 | $34,000 + $39,000 = $73,000 | 73% | | $100,000 - $175,000 | $75,000 | 50% | $37,500 | $73,000 + $37,500 = $110,500 | 63% | | $175, 000 - $250,000 | $75,000 | 60% | $45,000 | $110,500 + $30,000 = $140,500 | 56% | | $250,000 - $500,000 | $250,000 | 75% | $187,500 | $140,500 + $62,000 = $203,000 | 40.6% | | $500,000+ | $1+ | 90% | more than $0.90 | greater than $203,000 | less than 40.6% |
Criticism of maximum wages Critics of a maximum wage such as Milton Friedman argue that it would reduce incentive to innovate and for highly skilled workers to pursue demanding jobs. This decline in innovation would be problematic as innovation is one source of economic growth. Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist and public intellectual who made major contributions to the fields of macroeconomics, microeconomics, economic history and statistics while advocating laissez-faire capitalism. ...
Austrian economists argue that inflation is not caused by wages but by governments printing money. In addition, they highlight the fact money is a commodity whose value is subject to supply and demand. The Austrian School is a school of economic thought which rejects opposing economists reliance on methods used in natural science for the study of human action, and instead bases its formalism of economics on relationships through logic or introspection called praxeology. ...
Furthermore, Austrian economists and others have argued that given the diverse preferences of individuals within society it would be impossible to determine at what level the maximum wage should be set or what 'sufficient wealth' is.
History Maximum wage has been imposed by some social democratic governments such as Sweden in the 1960s. However, the policy was criticised and campaigners later had a "tax rebellion" and demanded the government reduce the top marginal taxes. Social democracy is a political ideology emerging in the late 19th and early 20th centuries from supporters of Marxism who believed that the transition to a socialist society could be achieved through democratic evolutionary rather than revolutionary means. ...
The 1960s decade refers to the years from January 1, 1960 to December 31, 1969, inclusive. ...
In his 2000 run for the Green Party presidential nomination, Jello Biafra advocated implementation of a maximum wage in the United States. Biafra claimed he would increase taxes for the wealthy and reduce taxes for those in the lower and middle classes. In American politics, the Green Party is a third party which has been active in some areas since the 1980s, but first gained widespread public attention for Ralph Naders presidential runs in 1996 and 2000. ...
Eric Reed Boucher (born June 17, 1958), better known by the stage name Jello Biafra, is an American punk rock musician and political activist best known as the former lead singer and song writer of the Dead Kennedys. ...
In England, the "Statute of Artificers of 1563" implemented statutes of compulsory labor and fixed maximum wage scales; Justices of the Peace could fix wages according "to the plenty or scarcity of the time". A Justice of the Peace (JP) is a magistrate appointed by a commission to keep the peace, dispense summary justice and deal with local administrative applications in common law jurisdictions. ...
To counteract the scarcity of labor and increase prevailing wages, American colonies in the 17th century created a ceiling wage and minimum hours of employment. [2]
Related Concepts Maximum Total Earnings legislation suggests that when a person has accumulated sufficient wealth that they can survive on the interest alone they must stop working and allow someone else to work. This theoretical concept assumes there is a set amount of work to be done in an economy, and is not supported by any major form of modern economic thought. Attempts to reduce unemployment by removing people from the labor force, as is proposed by this theory, have been a failure. Interest is the rent paid to borrow money. ...
See also In professional sports, a salary cap (often called a wage cap in the United Kingdom) is a limit on the amount of money a team can spend on player salaries, either as a per-player limit or a total limit for the teams roster (or both). ...
The minimum wage is the minimum rate a worker can legally be paid (usually per hour) as opposed to wages that are determined by the forces of supply and demand in a free market. ...
Graphical representation of the Gini coefficient The Gini coefficient is a measure of inequality of a distribution. ...
Socialism refers to a broad array of doctrines or political movements that envisage a socio-economic system in which property and the distribution of wealth are subject to social control. ...
It has been suggested that Definitions of capitalism be merged into this article or section. ...
Welfare economics is a branch of economics that uses microeconomic techniques to simultaneously determine the allocational efficiency of a macroeconomy and the income distribution associated with it. ...
Income inequality metrics or income distribution metrics are techniques used by economists to measure the distribution of income among members of a society. ...
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Face-to-face trading interactions on the New York Stock Exchange trading floor. ...
References - ^ TaxAlmanac - Online tax collaboration
- ^ U.S. Department of Labor history on wage laws in England and the American Colonies
External links - TaxAlmanac - Online tax collaboration A wiki created by tax professionals with detailed information on US IRS Tax Law and the only known free up to date copy of the US Internal Revenue Code.
- CAPitALLism.org - An online resource for creative maximum wage implementation
- A simple microeconomic explanation of wages, skill, and utility
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