Posted on 08/26/2004 11:05:33 PM PDT by n-tres-ted
It really depends on the business.
"well i just wanted to know why he differentiates tax costs incurred from other types of costs incurred when it comes to considering cost of doing business in pricing decisions..."
Because he hates the FairTax and has gone to all manner of contortions in logic to deny its obvious benefits. He has been proposaing the elimination of corporate income taxes and the substitution of tariffs on these threads for some time now. He ignores the obvious problems with that approach, as well as the problems associated with retaining individual income and payroll taxes. He attacks FairTax supporters, by calling them "shills". He wishes he had managed to convince anyone of his proposal's superiority, so he would have his own "shills". I'm not aware of a single FReeper, besides Willy, who thinks his proposal has merit. He can't understand why we all don't understand his brilliance and bow to his superior intellect.
Cost is usually "a" factor in price.
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usually? when is it NOT?
ignoring costs in the formulation of pricing is beyond a contortion in logic... it is just plain illogical.
as i read here, "you just can't make this stuff up"!!!
Hey you bunch of blood suckers in Washington, my state capitol, and my local tax commissioner, STOP SPENDING SO MUCH AND TAX ME LESS! That is the answer to the problem.
"the objective is to maximize profit yes, but that is done as frequently by lowering prices as increasing them."
Thank you for that lucid post!! I have been trying to explain to LewisLynn/balrog666/YourNightMare for years that maximizing price and maximizing profit are NOT synonymous. Maybe you will have better luck explaining to him than I have.
i wonder if i could find any business whose budget included no line item whatsoever relating to costs...
maybe next i'll hear that budgets are unnecessary??
i like it!
i've been trying it for years....
"how much are prices inflated by the costs of our tax system - and how does wage reduction factor into this? or does it? i'd like your opinion and any supporting information..."
According to the economists who have studied it, anywhere from 15 - 30% depending on the industry, somewhere around 22% on average. I'm not sure I understand your question about wage reductions.
thank you philwill for the information. do you have any links or sources?
the part about wage reduction was a question as to whether the tax costs not only affect price but also affect wages... since we have to compete price-wise with subsidized imports, maybe some of the domestic tax costs are paid via wage reductions?
Killing the IRS at any cost is a first step...black markets are actually white markets...the black market is the IRS
"And a VAT is incredibly counterproductive because it is a hidden and unattributed cost and is easily changed by law in the dead of night."
Finally!! We agree on something.
"Everything is governed by supply and demand and that never remains static."
That is very true. However, it is also true that any business that consistently sells its product at less than its total costs (including tax costs) won't be in business on a long term basis. Also, any business that doesn't provide its owners a competitive rate of return for their investment won't be able to attract capital in the future.
Because he hates the FairTax
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why?
"the part about wage reduction was a question as to whether the tax costs not only affect price but also affect wages... since we have to compete price-wise with subsidized imports, maybe some of the domestic tax costs are paid via wage reductions?"
Well, I'm not sure I have ever heard that (non-payroll)tax costs may affect compensation levels. There has been considerable debate on these threads relative to whether the employer's portion of payroll taxes, if eliminated, would be reflected in higher wages or in product pricing reductions. I suppose you could argue that one either way and it is probably a mixed bag in the real world.
thank you.
btw do you have link/source for the 22% "embedded" tax?
Care to post a link to some of those "studies"?Sure.
The economic analyses reviewed suggest that the tax-free status of exports under a destination-based consumption tax may have short-term effects but is unlikely to have a long-run effect on the overall U.S. trade balance. First, these analyses conclude that the tax-free status of exports simply maintains a level playing field between domestic and foreign producers in domestic and foreign markets. Second, any increase in net exports in the short run is neutralized in the long run by exchange rate movements. However, the studies suggest that changes may occur in the composition of U.S. trade. For example, U.S. net exports of capital-intensive goods could increase, while net exports of labor-intensive goods could decrease.
source
btw do you have link/source for the 22% "embedded" tax?No one seems to eager to point you to a source for a 22% embedded tax in consumer prices, do they?
well i have asked 3 people in the last hour or so... delay doesn't mean much yet... maybe they're looking...i'll give more time...but i hope for an answer... i'll be seeing the pillow soon but i'll check back... i was going to ask you too -
as to producer versus consumer...
i would suppose producer prices are prices paid by producer and that consumer prices are prices paid by consumer...
or is it wierd?
"Because he hates the FairTax"
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"why?"
He's a Pat Buchanon protectionist who keeps posting this attack that says that it is a truly "despotic" system that will lead to two classes blah, blah, blah. Another FReeper counted more than 400 times he has presumably copied and pasted the same attack message - presumably on 400+ different threads.
Tariffs would encite our trading partners to retaliate, generate more WTO sanctions and would simply band-aid a tax system which, at its heart, disadvantages US producers vs their counterparts in other countries. Trying to fix what is wrong with this tax system with tariffs is like putting a new roof on a house with major structural termite damage.
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