Replies

My income taxes aren't a cost, so they aren't paid. Absurd.

You don't pay your liabilities?

What we are discussing is if income taxes are a cost of production. The costs of production are the costs of the inputs needed to produce a product. Income taxes are not an input! You can produce a product without paying income taxes (it happens all the time).

BTW, a business's profits are considered maximize when "the revenue from selling one more unit of output is exactly equal to the cost of producing that last unit of output." [link] Income taxes do not factor into that equation.

AHA. I see. My income taxes are a "liability", not a "cost".... okee dokee.

Now you say that income taxes paid by business are a liability, not a cost... and that's what keeps them from being paid from sales revenues?... the question remains, where does the money to pay the liability of business income taxes come from???

Your initial position (I think it was yours and justshutup's) was that business income taxes are not costs and are not paid with sales revenues. Are you now saying that although they are not a cost, but rather a "liability", that they still are not paid with sales revenues?! Just where does the money to pay "liabilities" come from?!

LOL! And you wonder why we parse your words...(eyes rolling).

"BTW, a business's profits are considered maximize when 'the revenue from selling one more unit of output is exactly equal to the cost of producing that last unit of output.'"

From the link:
"In describing a producer optimum, we have defined the profit maximization condition with respect the variable factor input (labor) as:"

Please note on the graph that the revenue line is a straight 45 degree angle from the graph axis. IOW, there is a one-to-one relationship between price increases and revenue changes, which is to say that the elasticity of demand is ignored. That is because, as the above quote illustrates, this model is based on making labor the variable input factor and holding other factors constant.

IOW, this is a deliberately simplistic model to isolate a single variable and analyze it. This isn't the real world, nor is it intended to be.

This is coming from the same poster who just a couple of posts above made a comment about how FairTaxers don't understand economic principles. Then he posts a quote out of context and attributes relevence to this thread which clearly its author would not have given it.

Amazing. Such arrogance and incompetence combined. I would suggest you stick with graphic design, YN.

... there he goes again ... trying to mis-frame what was being said.

Are you trying to argue that income taxes have not been embedded in some way into the costs going into the next level of production?

I see nothing to suggest that the discussion was about profit mazimization so the quiant little formulas of digitaleconomist do not apply so it's hard to understand why you throw them out except to put a little more of your mud on the wall.

Another red herring!