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To: Gvl_M3

"We currently have about 30 plants in the U.S. Since we won't have to depreciate our property against our income, we can lower prices, make more profit.

It could encourage us to build/expand more plants since it would be a one time cash expense. Instead of building in Romania or Mexico, we could expand here."

You would still have to recoup all your operating costs, including plant and equipment, through the pricing of your product. At least, that is what we FairTaxers believe. The naysayers say that costs exist in one part of the business universe and prices exist in another and never the twain shall meet. If a business is profitable, it's just a coincidence. FairTaxers view that as silly revisionist economics.

The difference is that you would not have the expense and administrative hassle of maintaining two sets of books on your depreciable assets and that you would not have corporate income taxes, payroll taxes and their associated compliance costs. Your suppliers would also have similar savings and could pass those along to your company with no erosion in their profit margin.

The USA would be the largest tax haven in the world and your business would be one of many expanding here, rather than overseas.


210 posted on 08/23/2005 2:28:13 PM PDT by phil_will1 (My posts are in no way limited or restricted by previously expressed SQL opinions)
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To: phil_will1
The naysayers say that costs exist in one part of the business universe and prices exist in another and never the twain shall meet. If a business is profitable, it's just a coincidence

Now you're going to start misrepresenting the position of those you are arguing against. Well I guess since you misrepresent your own plan, its no surprise that you'd try to misrepresent ours.

In our "universe" costs and prices are extremely linked, if they weren't we could create the 22% cost savings out of thin air like you do. But since we are living in a real world where PRICES= COSTS+PROFITS we can't reduce Prices without reducing COSTS or PROFITS.

213 posted on 08/23/2005 2:32:43 PM PDT by RobFromGa (Afghanistan, Iraq, Iran-- what are we waiting for?)
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