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To: Brookhaven

Anyone who thinks businesses are going to uniformly pass on any proposed savings to the consumer is a naive.

That (suspect) 22%, um, profit will go to the shareholders. In most cases.

Your apple will be $1.09.


20 posted on 10/19/2011 12:48:33 PM PDT by nhwingut (Draft Palin '12... For 3rd Party Run)
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To: nhwingut
That (suspect) 22%, um, profit will go to the shareholders. In most cases.

Not that there's anything wrong with that.

23 posted on 10/19/2011 12:50:13 PM PDT by bkepley
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To: nhwingut
Your apple will be $1.09.

I'm going to buy used apples.

26 posted on 10/19/2011 12:52:03 PM PDT by Bubba Ho-Tep ("More weight!"--Giles Corey)
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To: nhwingut

Sure they’ll keep it, because there’s no such thing as competiton.

Competition will force prices down. Believing anything else is naive.


31 posted on 10/19/2011 12:53:50 PM PDT by Brookhaven (I oppose an electric border fence, because it might kill the alligators in the moat)
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To: nhwingut

Let’s assume you had Econ 100 & 200 in college. The key consideration is price elasticity. Assuming you know what that is, let’s presume the stabilized market price is indeed $1 per apple, of which the apple producer is happily making 5¢ per apple.

Now when the apple producer does not have 10¢ of tax burden carried forward in the price of their apple (because the end buyer ALWAYS pays the tax burden on products added anytime over the supply cycle), they’ll have 2 options:

1) Keep selling the apple at the $1 price and realize the additional margin as profit... or

2) reduce the price of the product and realize the same margin and profitability.

Obviously, if you choose option 1) above, you might encounter competition willing to reduce their competitive product to the price that reflects the margin that was occurring back before the tax burden was lifted.

This is all FREE MARKET dynamics at work. If you are an advocate of the free market, then none of this should be a surprise to you and you will agree that a reduced tax burden to the producer/supplier equates to a lower price to the end buyer in EVERY instance where it is permitted to work.


51 posted on 10/19/2011 1:06:29 PM PDT by GreenAccord (Bacon Akbar)
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To: nhwingut
That (suspect) 22%, um, profit will go to the shareholders. In most cases.

Not necessarily. The benefits/costs of tax cuts/tax hikes are not likely to be borne by only the supplier or only the buyer. Decreasing taxes decreases the marginal cost of producing more goods. It shifts the supply curve to the right. This means more goods supplied, and it also means the market-clearing price will drop, ceterus paribus (assuming a downward sloping demand curve, which is true for everything except stocks).

52 posted on 10/19/2011 1:06:43 PM PDT by Thane_Banquo
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To: nhwingut
You are naive to think that there is no competitive price pressure in the food, or any other industry. Initially the apple would cost $1.09, until ONE point-of-sale decides they can do just fine with a penny less profit but a larger market share. A race to the bottom would ensue. This process would take a matter of weeks, if not days, until the price of the apple is at it's most efficient price at that time.
64 posted on 10/19/2011 1:23:29 PM PDT by jdsteel (Cain vs. Not Able.......now that Sarah's out.)
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To: nhwingut

Not if the guy in the next apple orchard is willing to cut his prices a little more. There will be a slow race to the bottom.

Burnout all corps are paying the full rate.

I know that periodically when I need to upgrade equipment that I enjoy the section 172(?) dedeuction for accelleerated depreciation. I assume that goes away. That would suck. A single lens can costs as much a $7,000. Not cheap.


80 posted on 10/19/2011 1:57:22 PM PDT by Vermont Lt (I just don't like anything about the President. And I don't think he's a nice guy.)
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To: nhwingut

In the business world I live in, prices will indeed go down as a result of someone trying to get a competitive edge. Once one does it, all competitors will eventually follow. I agree with you in that it may not be 100% uniform, but prices will go down.


90 posted on 10/19/2011 2:34:20 PM PDT by 07Jack
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