Unemployment Rate Falls

[wiretap]

I'm not aware of any credible source that states that 100% of taxes levied upon businesses are passed on to consumers. Like I said, some are, some aren't.

I guess you haven't taken any business and economics courses. It's basic 101 entry level course material. Your taxes directly effect your business, how much revenue you need to make in order to break even or make a profit, how many positions/benefits you may need to cut if you don't meet the goals and the taxes come rolling in, etc. The costs are all worked in when you're dealing with a business so you don't collapse your company.

 

[fskimospy]

I guess you haven't taken any business and economics courses. It's basic 101 entry level course material. Your taxes directly effect your business, how much revenue you need to make in order to break even or make a profit, how many positions/benefits you may need to cut if you don't meet the goals and the taxes come rolling in, etc. The costs are all worked in when you're dealing with a business so you don't collapse your company.

This is simply incorrect. If you learned this in your 101 class, ask for a refund. If a tax is passed on to consumers (and how much of it is passed on if this is the case) is based upon their market influence and relative cost curve.

Frequently a considerable portion of any tax levied is paid by the consumer, but the entirety of all business taxes? Absolutely not.

 

[wiretap]

A business is entire supported by the CUSTOMER. Without the customer, they wouldn't be in business. Of course the customers pay the entirety of their taxes. Christ, it doesn't get much simpler.

Well, I guess I am wrong in part, because now the American taxpayer is picking up the cost with all the bailouts. If the business fails, they just foot the bill to the American taxpayer.

 

[fskimospy]

A business is entire supported by the CUSTOMER. Without the customer, they wouldn't be in business. Of course the customers pay the entirety of their taxes. Christ, it doesn't get much simpler.

Well, I guess I am wrong in part, because now the American taxpayer is picking up the cost with all the bailouts. If the business fails, they just foot the bill to the taxpayer.

If we're going to look at it that way then all taxes are really paid by the government, because the government created the money to begin with. It is silly to say that the government is only taxing itself.

Lets make it simple: Something costs $1.00, all taxes included. Legislation is passed to increase the tax on that by 10%. If 100% of the tax were passed on, then every time that happened the price of the item would increase to $1.10. It many cases it does not however. This really isn't rocket science. If those $0.10 were going to profits and now they are going to taxes the customers are paying the exact same amount that they were before.

If you were simply pointing out that the source of all businesses' money is their customers that's something so obvious that you could have saved everyone the time and not said it. Since presumably you were referring to the effect of taxation on the prices that consumers pay for a product, not all of it is passed on.

 

[wiretap]

If we're going to look at it that way then all taxes are really paid by the government, because the government created the money to begin with. It is silly to say that the government is only taxing itself.

Lets make it simple: Something costs $1.00, all taxes included. Legislation is passed to increase the tax on that by 10%. If 100% of the tax were passed on, then every time that happened the price of the item would increase to $1.10. It many cases it does not however. This really isn't rocket science. If those $0.10 were going to profits and now they are going to taxes the customers are paying the exact same amount that they were before.

If you were simply pointing out that the source of all businesses' money is their customers that's something so obvious that you could have saved everyone the time and not said it. Since presumably you were referring to the effect of taxation on the prices that consumers pay for a product, not all of it is passed on.

heh, you simply don't get it. The taxes are not paid by the government because they created the currency. The companies and citizens use the currency as an offset for their time and labor. But you'll notice now that our currency is a Federal Reserve note rather than being backed by solid assets.. but that is a whole other topic we could get into, and it's even more in depth so I doubt you'd understand that either.

Your $1.00 example is flawed. A company maintains a profit margin to stay in business at their standard operating margin. If something costs $1.00 to produce with taxes included, and the tax rates go up costing the consumer $1.10, the company either has to charge that or cut their business somewhere in order to maintain that business at the rate they were going. And this is precisely what we've been seeing in America. Production costs keep going up and up, and the companies can no longer afford to keep as many employees or keep the product cheap enough for people to continue buying it. This is why they move to cheaper labor overseas and move to countries with lower tax rates.

 

[fskimospy]

Your $1.00 example is flawed. A company maintains a profit margin to stay in business at their standard operating margin. If something costs $1.00 to produce with taxes included, and the tax rates go up costing the consumer $1.10, the company either has to charge that or cut their business somewhere in order to maintain that business. And this is precisely what we've been seeing in America. Production costs keep going up and up, and the companies can no longer afford to keep as many employees or keep the product cheap enough for people to continue buying it. This is why they move to cheaper labor overseas and move to countries with lower tax rates.

No, they maintain the best profit margin that they can. If they come to the determination that the cost of raising their prices in order to pass on the cost of the tax will result in lower sales that will in the end net them fewer profits than if they maintained the same price, they will simply swallow a portion of the cost. It all has to do with the supply/demand curve and the amount of elasticity present in the pricing structure.

This really is economics 101.

EDIT: If you're interested in a simple summary, check the wiki article on Tax incidence and indirect taxation: http://en.wikipedia.org/wiki/Incidence_of_indirect_taxation

 

[wiretap]

Businesses are in business to make a profit, not bleed out when they get taxed. They'll move wherever they have to in order to maintain that profit margin. History speaks volumes. Your empty analogies and false logic carry no weight when compared with what is actually happening, and what has happened.

 

[fskimospy]

Businesses are in business to make a profit, not bleed out when they get taxed. They'll move wherever they have to in order to maintain that profit margin. History speaks volumes. Your empty analogies and false logic carry no weight when compared with what is actually happening, and what has happened.

Not going to admit you were wrong, huh.

 

[wiretap]

No, because your argument doesn't hold water, and mine is backed up by exactly what has been happening historically. Everything isn't "theoretical".. sorry, that isn't how the world works.

 

[fskimospy]

No, because your argument doesn't hold water, and mine is backed up by exactly what has been happening historically. Everything isn't "theoretical".. sorry, that isn't how the world works.

No, you've drawn unfounded conclusions that are directly contradicted by basic economics, and then you had the balls to try and tell me that the bullshit you were letting fly was from econ 101.

Just admit it, you were wrong.

 

[heyheybooboo]

Businesses are in business to make a profit, not bleed out when they get taxed. They'll move wherever they have to in order to maintain that profit margin. History speaks volumes. Your empty analogies and false logic carry no weight when compared with what is actually happening, and what has happened.

Spoken like a true wing-nut with no clue as to Econ 101. Your fixation on taxes is pathetic. Your pretense as a 'free marketeer' is flawed.

Fundamental economics has no fixation on taxes and 'profit margin'. If you do not understand that you should not be in business.

Your so-called 'profit-margin' is dictated by demand and price elasticity. I'm sorry you cannot understand that.

By the way, Federal corporate tax receipts as a percentage of GDP are at their lowest level since 1937. Kinda strikes at the heart of all the Voodoo Economic nonsense being spewed in this thread.



--

 

[wiretap]

No, you've drawn unfounded conclusions that are directly contradicted by basic economics, and then you had the balls to try and tell me that the bullshit you were letting fly was from econ 101.

Just admit it, you were wrong.

No. I outlined exactly has happened historically, backed up by basic 101 level business principles. It is soooooo simple, a 9 year old kid running lemonade stand could figure it out. If you are losing money to something (i.e. increased taxes), you have to either cut something, or charge more for something.. else your business will shit the bed. You simply cannot argue against that, because it is the most fundamental business principle.

 

[wiretap]

Spoken like a true wing-nut with no clue as to Econ 101. Your fixation on taxes is pathetic. Your pretense as a 'free marketeer' is flawed.

Fundamental economics has no fixation on taxes and 'profit margin'. If you do not understand that you should not be in business.

Your so-called 'profit-margin' is dictated by demand and price elasticity. I'm sorry you cannot understand that.

By the way, Federal corporate tax receipts as a percentage of GDP are at their lowest level since 1937. Kinda strikes at the heart of all the Voodoo Economic nonsense being spewed in this thread.



--

- Again, when your profits are eaten up by taxes, whether those taxes be high or not, you're still losing money to them. It's part of your business operations.

- Percentage of GDP or not, our corporate tax rate is still the 2nd highest in the world. Do you see companies flocking here to do their business? No, they're trying to escape. We even have companies using our own "stimulus" money to build in China as we speak.

 

[WhipperSnapper]

You cannot force companies to do business here in America, that would be tyranny.

Of course not. However, that wouldn't be the same as forbidding them to do business here if they don't want to follow the laws.

... and they certainly won't do it when we have the world's highest corporate tax rates, and legislation in place requiring them to pay for the people's expensive health policies.

They would do it if it were profitable to do business here and if they wanted to sell goods and services to people in the United States. Don't confuse advocacy of trade protectionism with advocacy of crushing socialism. What if the U.S. became more capitalist internally (capitalism is good locally) while insulating itself from socialist policies in other nations by restricting international trade? (I don't understand how supposed advocates of capitalism can advocate merging the U.S. economy with socialist nations or nations whose economies were damaged by socialism and communism with a straight face.)

Now the NeoLibs have taken the opportunity to capitalize and use their own tax and health policies which led to the outsourcing, and how they're going to "fix" it by taking over the private sector as we've seen to force price floors/ceilings and set executive pay, and they're also pushing to force people to opt into health care that don't have it and have people who don't want it and don't opt into it to pay a hefty fine. LOL. What a circle jerk. I also know we have done nothing to address illegal immigration, and that's a huge mistake as well. The sad thing is, now we're rewarding immigrants and minorities more than anything which is not treating all people equal. That is unconstitutional in itself right there. I have to pay full college tuition while people sitting next to me right now from a foreign country get it for free because of the tint in their skin and immigration status.

The outsourcing was not 100% caused by labor and environmental laws and taxes, but also driven by the cost of American labor. Even if we eliminated these things, effectively decreasing Americans' wages and standard of living (as we race to the bottom) it would still be difficult to compete with impoverished Chinese, Indians, and Mexicans. The labor and environmental laws are part of Americans' compensation for their work in a way, so if we regarded those costs as wage costs too, it becomes very obvious the problem is not merely the existence of the labor and environmental laws themselves but rather one of global labor arbitrage.

 

[wiretap]

Of course not. However, that wouldn't be the same as forbidding them to do business here if they don't want to follow the laws.

They would do it if it were profitable to do business here and if they wanted to sell goods and services to people in the United States. Don't confuse advocacy of trade protectionism with advocacy of crushing socialism. What if the U.S. became more capitalist internally (capitalism is good locally) while insulating itself from socialist policies in other nations by restricting international trade? (I don't understand how supposed advocates of capitalism can advocate merging the U.S. economy with socialist nations or nations whose economies were damaged by socialism and communism with a straight face.)

The outsourcing was not 100% caused by labor and environmental laws and taxes, but also driven by the cost of American labor. Even if we eliminated these things, effectively decreasing Americans' wages and standard of living (as we race to the bottom) it would still be difficult to compete with impoverished Chinese, Indians, and Mexicans.

1. Precisely why a lot of them leave.
2. On that point, I was in agreement. I was making the point that the burden is so high as companies grow larger, they go out of the country to do their operations. But now we are seeing that the burden is being increased on the smaller businesses. We have yet to see the consequences because they're about to play out here over the next decade or two.
3. Let's look at what has been causing the increase. Unprecedented government spending driving up inflation, increases in the cost of minimum wage to offset those inflationary increases which themselves lead to more inflation since the money supply is increased artificially, moving away from a gold/silver tangible backed currency, creating derivative markets which cause bubbles to burst and benefit the elites while crushing the middle class, government takeovers and regulations in the private sector which dictate how a business must conduct it's practices, free trade where someone can ship something to this country cheaper than they can make it here, etc. (not to be confused with protectionism and it's sticks based policy)

 

[Patranus]

I'm not aware of any credible source that states that 100% of taxes levied upon businesses are passed on to consumers. Like I said, some are, some aren't.

Every tax is passed onto to the consumer or a company wouldn't make a profit.

 

[wiretap]

Every tax is passed onto to the consumer or a company wouldn't make a profit.

That's not necessarily true. (they could still turn a profit greater than they are taxed) But yes, it does have to be worked into their costs since it is a negative revenue.

 

[Ozoned]

No, they maintain the best profit margin that they can. If they come to the determination that the cost of raising their prices in order to pass on the cost of the tax will result in lower sales that will in the end net them fewer profits than if they maintained the same price, they will simply swallow a portion of the cost. It all has to do with the supply/demand curve and the amount of elasticity present in the pricing structure.

This really is economics 101.

EDIT: If you're interested in a simple summary, check the wiki article on Tax incidence and indirect taxation: http://en.wikipedia.org/wiki/Incidence_of_indirect_taxation

I know a ton of companies that operate on cost+fixed margin business model rather than pricing on whatever the market will bear. The really sucessful ones let their quality dictate demand, rather than the final cost of the product. Not saying you are wrong, just saying not all businesses operate the way you said up there.

 

[Patranus]

I cant wait until next year when the federal government employs over 1 million people for the census.

I wonder how much praise the liberals will give Obama when those job number come out (even though they are temporary workers)

 

[fskimospy]

I know a ton of companies that operate on cost+fixed margin business model rather than pricing on whatever the market will bear. The really sucessful ones let their quality dictate demand, rather than the final cost of the product. Not saying you are wrong, just saying not all businesses operate the way you said up there.

Well sure, in fact the contract my company is working on now is a cost plus one. My only point with the example was to illustrate that businesses do not pass on 100% of taxation, which is irrefutable.

 

[Darwin333]

No, they maintain the best profit margin that they can. If they come to the determination that the cost of raising their prices in order to pass on the cost of the tax will result in lower sales that will in the end net them fewer profits than if they maintained the same price, they will simply swallow a portion of the cost. It all has to do with the supply/demand curve and the amount of elasticity present in the pricing structure.

This really is economics 101.

EDIT: If you're interested in a simple summary, check the wiki article on Tax incidence and indirect taxation: http://en.wikipedia.org/wiki/Incidence_of_indirect_taxation

I see your point but that isn't exactly a good outcome (in most cases). So the government raises taxes on a company. The company doesn't pass all of it along and instead decrease their profits. Among other things, less profits mean less money to tax.

 

[fskimospy]

I see your point but that isn't exactly a good outcome (in most cases). So the government raises taxes on a company. The company doesn't pass all of it along and instead decrease their profits. Among other things, less profits mean less money to tax.

Well maybe in many cases it's not a good outcome. I wasn't really arguing the merits of taxation because such a thing isn't really possible. Most people would probably agree that taxes to build roads and the fundamental tools of commerce are good, necessary, and actually contribute to economic output while taxes to fund beastiality porn are bad, but there's a whole world in-between.

The only argument I was attempting to make in this entire thread was to point out the absurdity of the idea that 100% of taxes are passed on to the consumer.

 

[Wreckem]

Unemployment will rise significantly in Jan/Feb on 2010. B&M retail isnt faring so great this holiday season. Overall sales are only down .3% but same store sales for some chains have plummetted and even their averages for same sale stores dont tell the full story. There are alot Big Box locations off 20% of last year. Stores are already letting go some of their temporary seasonal workers. I fully expect some retail chains to close some of their stores next year. The retail retraction, from over expansion, still isn't finished.

 

[Zebo]

As I said these partisans and statistics are tools. 457,000 new claims this week were filed. But over a million is dropping off roles each week. A telephone survey is saying we're only down 11,000 jobs…does it look to you like SOMEBODY has fallen down on the job here?

 

[Zebo]

"The data, buried in Friday's unemployment report, are stark: The number of Americans out of work for 27 weeks or more reached 5.9 million last month, the most on records dating from 1948. That's 18 percent more than just three months ago, when the total was just below 5 million."

http://www.msnbc.msn.com/id/34280589/ns/business-stocks_and_economy/