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motbob
United States12546 Posts
On November 10 2009 07:40 SnK-Arcbound wrote:Show nested quote +On November 10 2009 07:21 Therapy wrote:
No. Thats simply not how economics work. It is not economically feasible for a "dude" to mark up prices in order to stay at the same net income. Thats just not how supply and demand works. Please don't talk about the economy when you don't know what you're talking about. Company's have to maintain a certain percent above costs to make money. All costs must be paid for by revenue. If you increase costs (taxes, minimum wage, inflation, cost of goods, transporting costs etc.) you must raise the price to match your profit margin, or cut the product, or try to dispose of the product to be replaced with something else.
Don't be condescending. You haven't been following the argument. We're talking about taxes on individuals, not on corporations.
Besides, taxes on corporations are on profits, not revenue, so corporate behavior does not change as a result of taxes. Profit-maximizing behavior before corporate taxes is the same as profit-maximizing behavior after.
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motbob i like your arguments.
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On November 10 2009 07:45 motbob wrote:
Don't be condescending. You haven't been following the argument. We're talking about taxes on individuals, not on corporations.
Besides, taxes on corporations are on profits, not revenue, so corporate behavior does not change as a result of taxes. Profit-maximizing behavior before corporate taxes is the same as profit-maximizing behavior after.
Taxes are a cost of doing business, when it is applied during the accounting process is irrelevant. If your taxes are increased, you increase the cost of the items to maintain your profit.
The debate was that "rich" don't stick the increased cost onto the poor, which is entirely false. The company (and thus an individual, since most people aren't on their own payroll and just make withdrawals from the business when they need money, and will often take all business income as personal income) is still making 10% profit, but the cost of increased tax is shown in the company's increased prices. People who are buying the product are the ones paying, not the one being taxed.
Profit "maximization" has nothing to do with a dollar amount. If you're in the IT business, you could be making a million dollars a year, but if you're below a 10% net income, you won't be in business. Maximizing profits is expending assets to produce revenue at a greater than 1:1 ratio, so it has nothing to do with taxes anyways.
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motbob
United States12546 Posts
On November 10 2009 09:57 SnK-Arcbound wrote:Show nested quote +On November 10 2009 07:45 motbob wrote:
Don't be condescending. You haven't been following the argument. We're talking about taxes on individuals, not on corporations.
Besides, taxes on corporations are on profits, not revenue, so corporate behavior does not change as a result of taxes. Profit-maximizing behavior before corporate taxes is the same as profit-maximizing behavior after. Taxes are a cost of doing business, when it is applied during the accounting process is irrelevant. If your taxes are increased, you increase the cost of the items to maintain your profit.
Taxes are not a cost of production. Increasing taxes will not make it more expensive for a company to produce their product. Thus, corporate taxes do not move the supply curve for a business. If the supply curve does not move, then the profit-maximizing price set for the item will remain the same.
The debate was that "rich" don't stick the increased cost onto the poor, which is entirely false. The company (and thus an individual, since most people aren't on their own payroll and just make withdrawals from the business when they need money, and will often take all business income as personal income) is still making 10% profit, but the cost of increased tax is shown in the company's increased prices. People who are buying the product are the ones paying, not the one being taxed.
Profit "maximization" has nothing to do with a dollar amount. If you're in the IT business, you could be making a million dollars a year, but if you're below a 10% net income, you won't be in business. Maximizing profits is expending assets to produce revenue at a greater than 1:1 ratio, so it has nothing to do with taxes anyways.
You are making the assumption that if the government raises taxes, the company can simply shrug their shoulders and raise the price of their product in order to get back to the level of profits that they were at before. This is an untrue assumption.
The following is anecdotal evidence to support my argument, but I think it's convincing all the same. Google "effect of corporate taxes"" and see what comes up. All you will find are articles on the effect of corporate taxes on investment and entrepreneurship. If you still believe I am wrong, please find an article that discusses the effect of corporate taxes on prices.
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10387 Posts
On November 10 2009 07:06 Undisputed- wrote:Show nested quote +On November 10 2009 07:03 mangomango wrote:
Undisputed- should we shut down the public school system? How about go back in time and stop the polio immunizations. What about rebuilding Europe after WWII? Social Security? Medicare/Medicaid? Let's not build roads. Let's not send the children of dead soldiers to university. Screw'em all no social safety nets. Let's terminate the police and fireman too. (They've been getting a free ride too if you ask me.)
We don't want to FORCE anyone to pay for someone else.
yeah thats almost the same thing RAGE RAGE
what the hell is wrong with you? You can't even properly answer the question anymore, you're just stuck in your own little shell where no amount of facts/reasoning will penetrate through.
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On November 10 2009 10:59 ArvickHero wrote:Show nested quote +On November 10 2009 07:06 Undisputed- wrote:On November 10 2009 07:03 mangomango wrote:
Undisputed- should we shut down the public school system? How about go back in time and stop the polio immunizations. What about rebuilding Europe after WWII? Social Security? Medicare/Medicaid? Let's not build roads. Let's not send the children of dead soldiers to university. Screw'em all no social safety nets. Let's terminate the police and fireman too. (They've been getting a free ride too if you ask me.)
We don't want to FORCE anyone to pay for someone else.
yeah thats almost the same thing RAGE RAGE what the hell is wrong with you? You can't even properly answer the question anymore, you're just stuck in your own little shell where no amount of facts/reasoning will penetrate through.
His comment had nothing to do with health care reform was my problem.
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The effect of corporate taxes on how a business is run varies from market to market. For markets with few competitors and inelastic demand, firms can afford to raise prices because people will still buy the product. The amount to raise and the choice whether to raise or not of course depends on the management. There will often be opportunity costs that goes with the increases prices.
In fairly competitive markets, with thin profit margins and elastic demand, higher taxes will either force companies to go under, or find other ways to lower their costs. The price is given to them by the market and is not something they can control. The most common means of cutting down costs is to lay off people.
Tying this back into the discussion of health care before it got derailed, most of the sectors associated with health care falls in the first category of markets--that is, it is inelastic and there are few competitors. The markets I'm talking about here are biotech/pharmaceuticals, insurance companies, and actual health care providers. In all these industries, the effect of raising taxes will probably be that the consumers will bear the burden of the costs. I didn't entirely read the line of discussion about taxes so I don't know if this is relevant to what you are discussing.
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motbob
United States12546 Posts
Until I see a paper talking about the effect of corporate taxes on profits I'm going to continue to maintain that since taxes don't affect the supply curve, they don't affect prices, period.
Remember that corporate taxes do not tax revenue. They tax profit.
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So ... if our healthcare is fine the way it is, why are we ranked number 37 on the World Health Organization's global ranking on world healthcare systems? http://www.photius.com/rankings/healthranks.html
And if socialized democracies are such horrible and ineffective ways to govern our population, why is Norway ranked number one on the Human Development Index? http://hdr.undp.org/en/statistics/
A big thank you to anyone on this website who is credited enough to dispute these facts and figures in advance.
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Really weird how your arguing against reform of your health-care system.. I see documentaries all the time on scandinavian TV stations, showing a hurting United States..
One example, how people in the U.S with severe life threatening diseases (like cancer etc) cannot even get to see a doctor because of the cost and lack of insurance.
And how you can call it stealing, to use your nations tax income, to build up a national health-care system that tries to get health-care to thoose that can't afford it..... well, i just don't want to belive you are this evil.. 
You are aware that international help organizations are operating in The US, because your states can't take care of it's citizens that fall out of the loop right?
There are aid camps, intended for the poorest regions in the world getting set up in your country for gods sakes!
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On November 10 2009 11:22 pubbanana wrote:So ... if our healthcare is fine the way it is, why are we ranked number 37 on the World Health Organization's global ranking on world healthcare systems? http://www.photius.com/rankings/healthranks.htmlAnd if socialized democracies are such horrible and ineffective ways to govern our population, why is Norway ranked number one on the Human Development Index? http://hdr.undp.org/en/statistics/A big thank you to anyone on this website who is credited enough to dispute these facts and figures in advance.
[colbert]You expect hardworking Americans to trust studies done by organizations clearly tied to the evil United Nations, which every day tries to usurp US law by asking us for the money we promised them years ago? Try again, fiend! If we were looking for someone to bring us international critiques to ignore, we'd ask Jimmy Carter.[/colbert]
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motbob, you're not going to find articles from academics that disclose information about how companies internally run their cost structures and pricing structures. Scientific articles are written by academics who work in a university for a living, not work in private industry. The reason why articles on corporate taxation are so scare when you google it is because in the field of taxation, cost accounting, and accounting in general, there is a huge divided between industry and academia. Most accountants who have the knowhow to work the corporate tax system, or have the know how to manipulate their cost structure for profit maximization are going to be working in industry. They can make money there. And they won't disclose that information out by publishing it in scientific papers because that would give away a company's competitive edge.
Most accountants who are the professors have knowledge that is 20 year old antiquated industry knowledge. That is why good accounting professors will try to bring in guest lecturers to provide contemporary industry insight. The bad accounting professors will lecture straight from the book.
Another factor to consider is that it is very expensive to gather information from industry because companies do not want to disclose their information. Most publicly traded companies have the generic 10-Ks they have to file, but that does not provide insight on what you are to address--how companies change their cost and price structure based on taxation.
Disclosure: I'm a tax accountant.
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HonestTea
5007 Posts
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i hope to god this passes. i just turned 21 and lost my insurance and im dirt poor
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motbob
United States12546 Posts
On November 10 2009 11:54 gchan wrote:
motbob, you're not going to find articles from academics that disclose information about how companies internally run their cost structures and pricing structures. Scientific articles are written by academics who work in a university for a living, not work in private industry. The reason why articles on corporate taxation are so scare when you google it is because in the field of taxation, cost accounting, and accounting in general, there is a huge divided between industry and academia. Most accountants who have the knowhow to work the corporate tax system, or have the know how to manipulate their cost structure for profit maximization are going to be working in industry. They can make money there. And they won't disclose that information out by publishing it in scientific papers because that would give away a company's competitive edge.
Most accountants who are the professors have knowledge that is 20 year old antiquated industry knowledge. That is why good accounting professors will try to bring in guest lecturers to provide contemporary industry insight. The bad accounting professors will lecture straight from the book.
Another factor to consider is that it is very expensive to gather information from industry because companies do not want to disclose their information. Most publicly traded companies have the generic 10-Ks they have to file, but that does not provide insight on what you are to address--how companies change their cost and price structure based on taxation.
Disclosure: I'm a tax accountant.
If there's no academic economic theory or empirical analysis concerning the effect of corporate taxes on prices, then as far as I know, such a relationship doesn't exist. If you maintain that information on the effect of taxes is simply impossible, then fine. I can't say definitively that you're wrong. You have experience in the field and I don't. But you can't expect me or anyone else to just take your word for it. You can't just say "it's a trade secret."
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On November 10 2009 12:22 motbob wrote:Show nested quote +On November 10 2009 11:54 gchan wrote:
motbob, you're not going to find articles from academics that disclose information about how companies internally run their cost structures and pricing structures. Scientific articles are written by academics who work in a university for a living, not work in private industry. The reason why articles on corporate taxation are so scare when you google it is because in the field of taxation, cost accounting, and accounting in general, there is a huge divided between industry and academia. Most accountants who have the knowhow to work the corporate tax system, or have the know how to manipulate their cost structure for profit maximization are going to be working in industry. They can make money there. And they won't disclose that information out by publishing it in scientific papers because that would give away a company's competitive edge.
Most accountants who are the professors have knowledge that is 20 year old antiquated industry knowledge. That is why good accounting professors will try to bring in guest lecturers to provide contemporary industry insight. The bad accounting professors will lecture straight from the book.
Another factor to consider is that it is very expensive to gather information from industry because companies do not want to disclose their information. Most publicly traded companies have the generic 10-Ks they have to file, but that does not provide insight on what you are to address--how companies change their cost and price structure based on taxation.
Disclosure: I'm a tax accountant. You can't just say "it's a trade secret."
That's exactly what I'm saying it is, which is why it is pointless to discuss it from a scientific standpoint. And that is also why I was trying to steer the argument away from taxation back on task to health care systems.
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1 Step closer to us socialist Canadians!
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So i'm wondering.
How many of you guys actually know what the bill is about?
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Very few people I'm willing to bet. I was going to make a post about directing people back to what's actually on the bill rather than on universal health care, but it would have been way too much work. The figures and parameters for the bill are actually up on public domain and their cost estimates are pretty terrifying, to say the least.
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motbob
United States12546 Posts
I appreciate that one of the provisions is taking away $24 billion from tax credits for biofuel manufacturers. Random, but welcome.
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EPT
