Posted on 03/19/2014 7:20:24 AM PDT by SeekAndFind
And it has been established that the buyer is willing to pay $1.10 for an apple. Just because the sellers costs go down why should we expect that the price will be reduced? It's more likely to believe the seller will pocket the extra profit. After all, isn't that what he's in business for? To make money? As much as possible?
If some seller or seller attempts to “keep” the 10 cents, another seller or seller will take away their customers by cutting their prices.
Nice in theory, nonsense in the real world. Commodity prices are set by the market. The market may decide that a bushel of corn is worth $5.00. Farmer A raises corn and it costs him $4.90 per bushel to produce his crop. He sells it at $5 and is happy with profit. But say Farmer B down the road has a larger spread on more fertile soil with a lower debt load and it costs him $4.75 per bushel to raise his crop. Does Farmer B go to the market and a) sell his corn at a reduced price to reflect his lower costs? Or b) does he sell his corn at the market price and pocket the additional profits? If you said a) then I suggest you stay out of business.
And those are perfectly competative markets where the costs are known and the items identical. That applies even less when trying to compare Honda with GM, Apple with Microsoft, or any other competing companies. Eliminating their taxes will not automatically bring their prices down because there are other factors affecting what the consumer is willing to pay. Do away with corporate taxes and you'll make a lot of CEOs happy at bonus time, but will do next to nothing for the average consumer.
Happens all the time, even with corporate taxes. Make a list of 10 items. Go to three different grocery stores and price all of them. Tell me how many are the same and how many are different.
It's been established that people will buy all their apples at $1.10. Why wouldn't companies continue to sell at that amount?
If apples cost a dollar and you're selling them at less than cost then you're losing money. In which case you are probably pissed that they've done away with the corporate taxes because now you won't be able to declare a loss and benefit from that at tax time.
Well, then Neal Boortz misled me. He has been emphatic that the repeal of the 16th Amendment comes first, as a guarantee that the FAIR Tax would not be added on top of the current income tax.
BTW: Amendments don’t always take so long to pass. The ERA took literally forever because people didn’t want it. The repeal of the 18th amendment passed lickety-split.
If a doctor works as a sole practitioner, he pays personal income taxes. If he incorporates, does he get to raise his prices because he now also pays corporate taxes? No, his competition won't allow it.
I don’t ever recall Boortz saying that, and I have been in the NRST/FairTax “lobby” since 1991.
Where did the $1.00 cost come FRom? You are the first to mention that before the $.10 tax was imposed, apples cost their sellers $1.00.
Taxes are paid by consumers. If there is no consuming going on, there will be no taxes paid by companies.
The corporate structure matters not.
Where did you study economics?
Careful, there are a lot of Freepers that think that is a can of worms! And believe me, they’ll throw all kinds of “degrees” and “certificates” in your face.
Park University.
And, what did you learn?
A whole lot.
I’m not trying to be snarky, but in reference to the question at hand, please try to convince me that your Econ 101 class taught you the basic Laws of Supply and Demand.
It did. But we're not talking about an increase in supply or a decrease in demand. We're talking about a reduction in the company's cost of doing business. The article established that the market has set the price for the apple at $1.10. Buyers are consuming all they want at that price. Sellers are producing exactly the amount buyers want at that price. Reduce the cost to the seller and why should that bring the buyers cost down? Consumers are paying the $1.10 and aren't complaining. Why should we assume that the seller will pass the cost savings on to the buyer rather than keeping it themselves?
It is called “competition,”...If you want to know why your Fairtax never gets anywhere look in a mirror.
Government forcing businesses to pay them is NOT in any way related to competition...In fact it's the opposite.
How long have you been on Obama's economic team now?
You know, LurkeyLiarLou, you and I have been snarking one another about the FairTax for several years now.
You refuse to acknowledge the truth of how liberating the FairTax would be to the USA.
I, of course, will not give up promoting the FairTax, because FReedom is important to me.
The FairTax represents FReedom, and those of you who are so blind as to not see that deserve to live and die with the evil Marxist inspired progressive income tax!
As for me, I believe that the single most important policy decision that the Congress and the President could ever make to revitalize America would be to replace the income tax with the FairTax and abolish the IRS.
You, however, wish to retain the aforementioned evil Marxist inspired progressive income tax!
We are at an impasse, and I am damn tired of it.
It is time to quit.
I will no longer respond to your comments.
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