Taxation

1
Taxation

• Issues to consider
• How visible are they?
• How socially acceptable are they?
• Progressive versus flat
• Who pays? (how many people pays? Is payment
  connected to usage?)
• What kind of Incentives on the economy and
  individuals?
• How burdensome are they to administer for
  businesses?

2
Workers rights (chapter 15)

• Employment at will governs the employment
  relation
• Limits (FLSA) Over the years the government has
  passed laws that have limited the rights of
  employers in this relation.
• Protections Over the years the government has
  also passed laws that provide protection to
  employees.
• There has also been also legislation that has
  created exceptions Union negotiated contracts
  EEO

3
Workers rights (chapter 15)

• Employment at will Common law
• the employer can set the terms and conditions of
  the job.
• The agreement between employer and employee is
  voluntary. Either party can end the agreement at
  any time.
• Critics note that this doctrine favors employers.
  The relationship employers employees is
  asymmetric. Employers can hire another employee
  more easily than an employee can find another job
  (particularly when unemployment is high).

4
Limits to employment at will

• Child labor
• Hours
• Wages
• The need for DUE PROCESS when firing employees.
• Privacy

5
Mandated social benefits

• Paid vacations and holidays
• Health care
• Sick leave
• Long-term disability insurance
• Family leave
• Unemployment insurance
• Public pensions

6
Exceptions

• Contracts negotiated by organized labor
• Discrimination including protection against
  sexual harassment

7
Organized labor

• Balancing the asymmetric relation through a
  contract negotiated by parties that have similar
  power
• Unions are increasingly weakened directly through
  policies that undermine their power and because
  people is finding alternative ways of gaining
  rights.

8
Discrimination

• A failure of the market because it does not allow
  for meritocracy to be the guide on hiring
  decisions.
• Illegal discrimination
• Disparate treatment
• Disparate impact
• The question is whether government intervention
  through the Equal Employment Opportunity
  Commission makes things worse.

9
National policies

• Immigration of workers
• Emigration of jobs
• Flexibility of the labor market

10
Alien employees

• The Immigration Reform and Control Act (IRCA)
  changed the rules. It provided amnesty to
  individuals working illegally in the US to become
  legal. It worked pretty well and right now we
  are discussing a similar law.
• IRCA also held employers accountable for
  documenting their employees immigration status.
  It is considered very ineffective

11
Class discussion Amnesty for illegal immigrants
- McCain-Kennedy bill in the senate

• Amnesty for illegal aliens - The Washington
  Times Editorials/OP-ED Amnesty will be a magnet
  for further illegal immigrants, who hope to be
  the ... Amnesty not only encourages illegal
  immigration, but contempt for the law as
  ...www.washtimes.com/op-ed/2004/01/21
• The Senate Republicans who voted on Monday to
  legalize the nation's illegal immigrants look at
  the waves of immigration reshaping this country
  and see a powerful work force, millions of
  potential voters and future Americans. (NYT,
  March 29, 2006)