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To: Skeeter Bug who wrote (106949)	6/6/2001 3:28:37 PM
From: GraceZ	Read Replies (1) \| Respond to of 436258

I was simply showing you that tax cuts aren't necessarily inflationary. The reason they aren't, especially the ones that were instituted by Ray-gun and those proposed by Shrub have to do with who gets the tax cut. It's extremely unpopular to state, but rich people will take any incremental tax break and invest it because they already have enough income to satisfy their consumptive tastes (with some notably exceptions I'm sure everyone will eagerly point out). People on the lower rungs tend to consume any incremental income or tax savings. Consumption tends to be inflationary whereas investment isn't necessarily. Most of the investment assets in this country are owned by the top 5% in income earners. We have a minimum wage that is multiples higher than any number of other countries. I think you might even agree that while the minimum wage increases during the Ray-gun years didn't result in inflation there was certainly a flight of manufacturing jobs out of this country as there has been out of every country that has a high cost of employment. If the wage is raised some of the jobs will simply leave the country. The ones that can't leave because they are service jobs requiring a specific location here in this country, raising the minimum will raise the cost of employing those entry level workers to the point where those costs will have to be recooped in higher prices. I have a business where the production level of the employee is higher (after they go through a significant training period) than in an industry where they employ minimum wage workers. It's not entirely descretionary, what you pay your employees. It depends on what I said yesterday about jobs and employees having market values. But it is also dependant on the level of production. You can't pay people in excess of their production without it being inflationary. What people can do is raise their own market value. This is a far better, far more permanant solution to the problems facing the working poor. There are many, many resources available to people in which to do this. I know this first hand.