November 3, 2026
Wages and Taxes
Economics is a complex matter. People tend to think that if wages rise from 100 to 150, the wealthy employer will earn 50 less, and that this is therefore both good and fair. Things are rather different. Higher wages do not so much reduce the employer’s profits as increase the cost of the product. Consequently, it is the person who buys the product who ends up paying for the wage increase. And if the resulting cost is higher than the market can bear, the company will go bankrupt and the workers will be left unemployed.
The same applies to taxes. For example, when attempts were made in the nineteenth century to tax grain producers, the result was an increase in the price of bread, which ultimately fell on the poor. In Italy, this happened with the so-called tassa sul macinato (mill tax).