Posted on 02/20/2006 3:30:35 PM PST by Bigun
This is wonderful! He backstops his ignorance with even more misinformed misunderstanding of hidden taxes.
I see that Nightie is illustrating his lack of understanding of what the cascading example shows. that's pretty typical.I understand completely what the "cascading" example shows. It shows you have absolutely no idea what the hell you are talking about.
Mysteries? Oooh, sounds spooky.Didn't mean to scare ya. I'll be more careful in the future.
Doesn't matter much, since our economy isn't built on a feudal caste system. Individual taxpayers represent all three groups - labor, capital, and consumption. All of the embedded tax and compliance costs in every supply chain must show up somewhere, either in higher prices, lower wages, or both. Any way you look at it, individuals are the ones who take it in the shorts when the gov't "taxes" corporations.You forgot lower return to investors.
LOL, yeah, showing your numbers to be completely impossible is a 'straw man' claim.....whatever.
What's your point?That you forgot that the corporate tax could be borne by investor through a lower return.
Hmmm, just for the sake of argument, I'll say you are wrong. Investors don't bear corporate taxation through a lower return.I didn't say they did. I said they could.
All corporate tax and compliance costs show up in product prices.Maybe you could tell me how much corporate tax and compliance costs show up in the price of GM's cars. They lost $8.6 billion last year. Why didn't they just raise their price to cover all their costs, including compliance costs and all the tax costs of all of their suppliers? Why didn't they "pass all of it on to the consumer"? Did they just forget?
huh?????
Uh, yeah, that's what I said.
Being the accomodating fellow that I am I'll tell you! ALL of those types of costs incured by GM (don't tell me they do not incur such costs simply because the failed to make a profit that year) plus those of every supplier of every component in the supply chain of GM but that's all!
And, if additional levels are involved instead of the 6 chosen to present the illustrative example, you'll find that the cascading and embedding picks right back up again. So while the "Accumulated tax as % of price" (which in my example is "tax cost as % of sell price") appears to fluctuate in your example, it only does so because of the carefully-chosen marginal points used. But your example has other basic flaws as well. Your derivation of "cost of value added" appears both arbitrary and inconsistent from level to level - it makes no sense. The poorer performing businesses are adding less value proportionately than the more successful ones; perhaps that's why they're clearly going out of business - all 4 of them.
More than that, even though you have basically chosen 4 of the 6 levels as being failing companies, there will be few companies even at what you call a 4.9% "net profit margin". You spreadsheet example has changed the entire example and only illustrates that failing businesses (4 of the 6) pay little or no tax. They also will not be in business long at that rate. A 4.9% "net profit" (your spreadsheet description) really represents a markup (as used in my spreadsheet) of about a little under 9% which will be untenable in the real world.
Another fly in your ointment is that you assumed that even those businesses doing poorly were paying taxes when in fact they would not be since they have little or no profit and you haven't adjusted the rate.
It would have been more intellectually honest of you to use the second example I gave which used a net profit of 10% *which represented a markup of about 18%) and go from there. Artificially adding costs isn't what the example is all about and you apparently ignored the fact that I clearly stated the example was not intended to be any sort of real-world accounting example of businesses but was intended to show how the cascading mechanism of embedded tax costs occurs - which it does.
Your example is so drastically modified in several ways that it does nothing of the sort. Since you are pretending to have some sort of "real world" example (and you don't) you could at least have used more realistic markup/net profit levels instead of picking 4 of the 6 as failing businesses. Lets say that all 6 were reasonable businesses operating at some sort of profit level such as the 2nd example I showed.
As it is your example means nothing at all except as an example of your cleverness in devising a spreadsheet to minimize certain values (and some of those are incorrect as we've seen). If I were grading your effort in class, Nightie, I'd give you an F- and send you back to Business 0.000001.
This exercise you'd like to engage in is truly nonsense and I'm certainly not going to continue the waste of time with you. I've been all over this ground in the past.
Perhaps the funniest thing of all, though, with your misbegotten and misshapen attempt at illustrating some point (which escapes me since the execution is so flawed) it this:
EVEN WITH ALL OF YOUR CAREFULLY-CHOSEN VALUES (OFTEN PULLED FROM GOD-KNOWS-WHERE) AND UNREALISTIC ASSUMPTIONS OF 4 OF THE SIX BUSINESSES BASICALLY FAILING AND THEREBY CONTRIBUTING LITTLE OR NOTHING THE THE CASCADING EMBEDDED TAXES AT THE END OF LEVEL 6 YOU STILLSHOW EMBEDDED TAXES COSTS OF ALMOST 5%. THIS WOULD BE IN ADDITION TO THE 7.65% YOU "EXPERTS" HAVE BEEN HARPING ON THAT STEMMED FROM THE SAVING OF THE "ER" PORTION OF PAYROLL.
So, if you are to be believed you're illustrating close to a 12.5% price drop by eliminating the income tax and that doesn't even count compliance costs which one of your whizzes (AR maybe?) said was 2%. Goodness how prices will drop with the income tax elimination ... and you've just demonstrated it.
My example illustrates the cascading mechanism with far less folderol to get in the way than yours, but thanks for proving that perhaps the 15% price drop area is reasonable. Who'da thunk it??? 'Preciate it Nightie!! Don't know how you'll square that with the other Squirrels, though, since you've just shot them all in the foot.
Those costs were in the price of their cars and they still lost $8.6 billion last year?Maybe you could tell me how much corporate tax and compliance costs show up in the price of GM's cars.Being the accomodating fellow that I am I'll tell you! ALL of those types of costs incured by GM (don't tell me they do not incur such costs simply because the failed to make a profit that year) plus those of every supplier of every component in the supply chain of GM but that's all!
Yep!
You may also be unaware of the fact that GM, as required by contract, has been paying the salaries of many thousands of their UAW employees who have not shown up for work in years!
Yep!So the cost of their sales was $8.6 billion more than their sales, but somehow those costs were in the prices. If those costs were in the prices wouldn't the sales be higher than the costs? Hmmm....
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.