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The NYT reports that in a unanimous vote, the Seattle City Council went where no big-city lawmakers have gone before, raising the local minimum wage to $15 an hour, more than double the federal minimum, and pushing Seattle to the forefront of urban efforts to address income inequality. "Even before the Great Recession a lot of us have started to have doubt and concern about the basic economic promise that underpins economic life in the United States," says Council Member Sally J. Clark. "Today Seattle answers that challenge." High-tech, fast-growing Seattle, population 634,535, is home to Amazon.com, Zillow, and Starbucks. It also has more than 100,000 workers whose incomes are insufficient to support their families, according to city figures and around 14% of Seattle's population lives below the poverty level. Some business owners have questioned the proposal saying that the city's booming economy is creating an illusion of permanence. "We're living in this bubble of Amazon, but that's not going to go on," says businessman Tom Douglas. "There's going to be some terrific price inflation."
(Score: 2) by khallow on Thursday June 05 2014, @02:19PM
And then they have to raise the minimum wage again.
business value go up.
Value != price. That's the fundamental lesson of inflation.
Rich people with money under the mattress lose out.
Anyone who has to pay capital gains tax loses out. Sure, that's mostly the rich, but it's a lot bigger group than merely the mattress-stuffers. And there are a lot of dumb regulations (in addition to capital gains taxes) that don't take into account inflation. For example, the US has the "alternate minimum tax" (or AMT) which is a way to force relatively rich people to pay capital gains annually. It keeps catching more people each year.
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And it has a nasty synergy with inflation since capital gains due to inflation are taxed at the same rate as capital gains due to an increase in the value of the asset in question. And the AMT forces people to declare capital gains each year which increases the effect of inflation-based capital gains taxes. You'll get a higher final return, if you pay capital gains once, twenty years from now on your asset rather than each year.