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Spence...a business is an entity..just like a person. And has the same needs regarding income and outgo.

There is an inverse but very similar affect with taxation between businesses and individuals. The effect of taxation flows both ways. Businesses must either pass on taxation costs to customers or become more efficient in order to absorb those costs and prosper.

Individuals, ultimately, are what support business. As individual income is affected by taxation, individuals cut back as the tax burden has impact on their budget..and they do so by passing these cut backs to business, especially those businesses that do not deal with life's very basic needs.

The same reason behind the fact that it is the rich who pay more taxes led Willy Sutton to answer the question.."Why do you rob banks?" with the answer..."That's where the money is".

billybud wrote:Spence...a business is an entity..just like a person. And has the same needs regarding income and outgo.

There is an inverse but very similar affect with taxation between businesses and individuals. The effect of taxation flows both ways. Businesses must either pass on taxation costs to customers or become more efficient in order to absorb those costs and prosper.

Individuals, ultimately, are what support business. As individual income is affected by taxation, individuals cut back as the tax burden has impact on their budget..and they do so by passing these cut backs to business, especially those businesses that do not deal with life's very basic needs.

I don't understand your logic. No business pays taxes. They just do not. The people who support the business pays their tax. There is no two way street the more you pass on to business in terms of fixed cost, the more you add to the bottom line. Business says they need a certain % to turn a profit and that profit is required to keep the doors open. You raise the bottom line 2% then you raise the cost of doing business 2 percent. Then I add my percent of profit to that cost and you pay more - everytime. Or I go out of business and then there are less people competing in the market.

You may be happy the tax is passed on to you indirectly, but you are still paying it. Business to not try to be more efficient to cover their tax, they do it for profit.

If it is people, only, who pay taxes, wouldn't it be great to make it illegal for business to pay the 100s of millions of dollars to lobbyists that they currently do to effect the tax code. Let the people decide. But "the people" don't have folks in Washington contributing to campaigns, wining and dining, and effecting taxation policy.

An economist who was brought to my attention by our folks in Florida says that it can not happen that the median tax payers are the primary influencers of tax policy.

Politics drives tax policy. The politics of becoming elected or maintaining office. And, according to the research of several economists, the power in politics is not in numbers, but in those who have a strong coordinated view of a policy. Thus the extremes seem to have more political clout than does the middle.

Then I add my percent of profit to that cost and you pay more - everytime. Or I go out of business and then there are less people competing in the market.

Many economists favor more taxation on the inelastic demand business...and less on those businesses with elastic demand. There is less of the cause/effect that you brought up when demand is inelastic.

The problem is that we do not develop taxation policy strictly from the best economic sense. Taxation policy is derived by the politics of running or maintaining office, the politics of campaign contributions and corporate lobbyists, and the politics of the extreme ends of the political spectrum who organize better and are more strident than the middle.

billybud wrote:If it is people, only, who pay taxes, wouldn't it be great to make it illegal for business to pay the 100s of millions of dollars to lobbyists that they currently do to effect the tax code. Let the people decide. But "the people" don't have folks in Washington contributing to campaigns, wining and dining, and effecting taxation policy.

An economist who was brought to my attention by our folks in Florida says that it can not happen that the median tax payers are the primary influencers of tax policy.

Politics drives tax policy. The politics of becoming elected or maintaining office. And, according to the research of several economists, the power in politics is not in numbers, but in those who have a strong coordinated view of a policy. Thus the extremes seem to have more political clout than does the middle.

So let's expand the role of government

The problem also is here is that you cannot expect a democracy to choose rational policy if an individual believes their vote is of minor consequence. Yes, a politician has some kind of dual nature where, on one hand, he must appeal to business interests and on the other hand, he has to appeal to the voters. The voters do ultimately decide which politician to place in office and often dangerous policies are promised and then implemented.

In other words, I don't trust "the people" to choose wise policy. Guess that makes me an elitist

What a politician can get away with though is free game for special interests. Look at the farm subsidy issues. Nobody pays attention to that, much less knows what it entails. Look at our current health care situation. Viewed from a Machiavellian perspective, the maintaining of power and influence is the ultimate goal of politicians, but there are two sides of the coin to be played. Economic policy directed to meet business interests need to be sold to the public in varying manners.

Who gets more attention from a Senator..you or me writing an email...or a $5 million PAC campaign contribution from the dairy industry?

The public are so bamboozled on policy that they don't even understand just who is behind the policy TV ads. The trial lawyers, in favor of more law suits, do not pump in their big bucks to advertise against a policy under "American Trial Lawyers"...but rather "Citizens for Justice".

billybud wrote:Who gets more attention from a Senator..you or me writing an email...or a $5 million PAC campaign contribution from the dairy industry?

The public are so bamboozled on policy that they don't even understand just who is behind the policy TV ads. The trial lawyers, in favor of more law suits, do not pump in their big bucks to advertise against a policy under "American Trial Lawyers"...but rather "Citizens for Justice".

Oh, that is true and something we agree on. I deal with lots of independent groceries and independent restaurants. Their big complaint is how much extra it costs -almost yearly - to comply with new regs. Chains like Walmart, Kroger, McDonalds...etc.... push for these regs to help put the indies out of business. Even though it costs them more too. They have it. They buy cheaper and sell for more margin, so they can afford it. That is why, outside of Texas anyway, the whole food industry is chain driven. Moving the direction the banking industry did years ago. Whether that is good or bad is a matter to be debated, but it is the major force driving the independents out of business.

That has little to do with the fact that no matter how the government likes do designate who is paying the tax increases they set into motion, are actually paid for by the people who use their goods and/or services. The individual pays all the taxes. There are no exceptions, at least that I am aware.

billybud wrote:Who gets more attention from a Senator..you or me writing an email...or a $5 million PAC campaign contribution from the dairy industry?

The public are so bamboozled on policy that they don't even understand just who is behind the policy TV ads. The trial lawyers, in favor of more law suits, do not pump in their big bucks to advertise against a policy under "American Trial Lawyers"...but rather "Citizens for Justice".

That's my exactly my point as well. When it comes down to it though, the voting booth decides which of the two (and granted, it's often a false dichotomy). I maintain that it's the public's fault for not being aware. None of this is solved, as you seem to oftentimes state the case for, more government. More government = less freedom. Crony capitalism = less freedom. They do go hand in hand, you know.

Just as "health care reform" doesn't really mean health care reform, now does it? It's a convoluted web of industry taking advantage of the monopoly of power that a state provides. Just as Spence said, the bigger industries push out the competition for their own profit. They are allowed to do this because government gives them a good boost to do it.

I know what you're saying Spence about indirectly paying taxes. However, there is still supply and demand that needs to be met. The business may have to adapt in order to maintain that equilibrium, and that's where the issue comes into play. Less profit to be made? Okay, we'll have to lay off some workers and scale back production in order to maintain the highest possible profit (which is not some back-door decision making process, it depends on what the consumer is willing to pay and the willingness of a business to perform the task, Economics 101). And now that the paradigm has been shifted, some people who would want to buy the product beforehand now lose the ability to enjoy the product. So in effect, you are marginalizing competition, denying people the ability to share goods, and forcing people to find work. All of these needs would be met if they were just allowed to do as they pleased, but no, the government decides what happens.

Eric wrote:I know what you're saying Spence about indirectly paying taxes. However, there is still supply and demand that needs to be met. The business may have to adapt in order to maintain that equilibrium, and that's where the issue comes into play. Less profit to be made? Okay, we'll have to lay off some workers and scale back production in order to maintain the highest possible profit (which is not some back-door decision making process, it depends on what the consumer is willing to pay and the willingness of a business to perform the task, Economics 101). And now that the paradigm has been shifted, some people who would want to buy the product beforehand now lose the ability to enjoy the product. So in effect, you are marginalizing competition, denying people the ability to share goods, and forcing people to find work. All of these needs would be met if they were just allowed to do as they pleased, but no, the government decides what happens.

When the government imposes a tax on business or certain kinds of business that is a fixed cost of doing business. Nothing to adapt. It goes directly onto the cost of the product. A good example - although very simplistic - is cigarettes. The government "sin tax" on cigarettes goes directly onto the price of cigarettes. It is a fixed cost so every manufacturer has it apply. Now - that applies to sales in this country. For sales to another country, where they do not pay this particular tax, they don't add it into the price and they buy cheaper - minus that tax. Most businesses operate on a fixed profit margin so while the number of dollars may change the margin generally does not. The lay off people - not because the margin of profit is changed - but because they market conditions have changed and people are not buying as much of that product. If people keep buying or increase sales enough, then they add people. If a company finds a way to operate more efficiently, they generally apply the difference to the product and increase profit dollars by increasing volume. Volume is the key to increase profits. No one can just charge a random price they plucked out of the air for their product. The market completely determines the price that everyone charges.


You are right, though, that decreasing the number of people that do what you do will eventually allow them to charge more. People charge as much as they can for their goods or services, not as cheap as they can. If Walmart is the only game in town, they will raise prices. That is how it works.

The majority of taxes are paid indirectly. Withholding tax is one of the biggest.

Spence wrote:

Eric wrote:I know what you're saying Spence about indirectly paying taxes. However, there is still supply and demand that needs to be met. The business may have to adapt in order to maintain that equilibrium, and that's where the issue comes into play. Less profit to be made? Okay, we'll have to lay off some workers and scale back production in order to maintain the highest possible profit (which is not some back-door decision making process, it depends on what the consumer is willing to pay and the willingness of a business to perform the task, Economics 101). And now that the paradigm has been shifted, some people who would want to buy the product beforehand now lose the ability to enjoy the product. So in effect, you are marginalizing competition, denying people the ability to share goods, and forcing people to find work. All of these needs would be met if they were just allowed to do as they pleased, but no, the government decides what happens.

When the government imposes a tax on business or certain kinds of business that is a fixed cost of doing business. Nothing to adapt. It goes directly onto the cost of the product. A good example - although very simplistic - is cigarettes. The government "sin tax" on cigarettes goes directly onto the price of cigarettes. It is a fixed cost so every manufacturer has it apply. Now - that applies to sales in this country. For sales to another country, where they do not pay this particular tax, they don't add it into the price and they buy cheaper - minus that tax. Most businesses operate on a fixed profit margin so while the number of dollars may change the margin generally does not. The lay off people - not because the margin of profit is changed - but because they market conditions have changed and people are not buying as much of that product. If people keep buying or increase sales enough, then they add people. If a company finds a way to operate more efficiently, they generally apply the difference to the product and increase profit dollars by increasing volume. Volume is the key to increase profits. No one can just charge a random price they plucked out of the air for their product. The market completely determines the price that everyone charges.


You are right, though, that decreasing the number of people that do what you do will eventually allow them to charge more. People charge as much as they can for their goods or services, not as cheap as they can. If Walmart is the only game in town, they will raise prices. That is how it works.

I definitely agree, Spence. What I was saying is that supply and demand still have an effect on the market. The business model changes, like you said, due to the market influence. Cigarettes would be a lot cheaper without taxes because of more competition (a race to the bottom of pricing the cigarettes) and there are obviously people who can't afford cigarettes now due to the pricing. My point is that it is not a proper allocation of resources when you punitively tax a business that there is a market for. Fewer people enjoy cigarettes that were previously able to afford it, true market forces are not allowed to operate, and people don't have jobs that would be necessary otherwise.

I guess I did ramble a bit, but I agree with your central thesis that the consumers get the hurt

donovan wrote:The majority of taxes are paid indirectly. Withholding tax is one of the biggest.

If people really understood how much the government took out of their pocket they would have a cow. You are absolutely right. I hear people say all the time that you don't have to pay taxes on food. That is one of the bigger jokes I have ever heard. The reason our tax structure is set up the way it is set up is because they can tax you and make you think they are soaking someone else. And we keep voting them in.

Lobbys are a problem. But the big problem is the lack of common sense. We don't want to make decisions so we have things like zero tolerance policy. That way no one has to make a decision and I five year old that brings a knife in his lunch to cut his meat gets expelled from school. My kid - in sixth grade - told me tonight that her teacher recomended bringing coffee to school so they can be sharp while taking their state test. I'm sending a note with her tomorrow that says I don't allow her to drink coffee, but she can celebrate afterward with a glass of champagne. They don't seem to understand the difference between adult behavior and child behavior. She also had a teacher that teaches them to use a calculator when they don't understand the process. She couldn't do simple division without a calculator. When I told her teacher that, he said she doesn't need to do it without a calculator because the state test allows them to use the calcuator. I don't care about the state test, I just want them to teach her. I taught her in 30 minutes how to simple division. Next year she is going to a new school, I have had enough.

Sorry for going off topic, but I am just so sick of our whole public system. I am going to vote against every one of the Incumbent SOB's out of office until it makes a difference. I hope 51% of people will join me.