Posted on 08/27/2007 7:53:49 AM PDT by Turret Gunner A20
if nothing else, it avoids setting up a NEW fed tax, which is what nat'l sales tax does.
If it will increase your profit. Lets say that both you and the guy across the street sell a product for $100 that costs both of you $70 wholesale, and that you each sell 100 of them a month. So you're making $3,000 profit on $10,000 sales. Now if you believed that by dropping your price to $95, you could get 75% of the 200 units sold each month, that would amount to $3,750 profit on $14,250 sales.
You might even do a little better, because lowering the price brings in 10 more customers who will buy at $95 but not at $100, and you might be able to make a deal with your wholesaler to get the items for $67.50 because of the increase in your volume. This would net you $4,400 profit on $15,200 sales.
The only thing the guy across the street can do is lower his price to $95 too, or he might even go you one better and cut his price to $92.50. This can go on until the margin is barely enough to cover your overhead or all but one of you decides he's unwilling to sell for less than X profit.
NUFF SAID!!
WalMart isn’t exactly hurting.
Without that, I will not support it.
Please enumerte the lies.
Meaning you don't believe embedded taxes exist?
I have never seen compelling documentation to justify anything approaching a 30% drop in the cost of goods at the retail level.
Or are you agruing about the amount of embedded taxes?
And the number is 23%, not 30%.
K-Mart however is, and deserves to be. It is without question the worst retail store in America. I have never seen such a dirty, disorganized, falling apart store staffed by the most incompetent people on the planet.
Wal-Mart greeters are rocket scientists compared to the people K-Mart employs.
I'm not so convinced that the high end mall-type department stores are doing so great, but even if they are, it doesn't prove anything about pricing in the pure sense, because those stores didn't just pocket the money made from the higher prices, they spent it on more expensive fixtures, better staff, higher rent locations, etc., IOW things that affect the customers' experience, so in effect it becomes part of the product they're 'selling', making a comparison to K-Mart not an apples-to-apples one.
I haven't seen you doing anything but posting a bunch of unfounded sniping. Nor have I seen any citations of authority to back up your rants. Are you hiding something that the MIT< Harvard, and other analysts would like to know? How about letting us "ignorant people" in on your vast store of hidden knowledge? We can hardly wait.
gotta love it, eh??
why? you’re doing just fine with your buddies posting them all...
Rule 1:
Never argue with an idiot.
“That is, they have created exemptions. For instance, they assume that congress would never agree to tax food and medicines, therefore the tax would have to be XX percent, or that congress wouldn’t tax transportation and housing, therefore the tax would have to be XX percent. Again .. the fact that the taxes are already there in the form of embedded taxes – embedded taxes to be replaced by the fair tax – is ignored.”
Therein lies the crux of the problem with the Fair Tax. Does anyone really think that Washington pols and K Street are going leave an implemented fair tax unadulterated by exemptions? Even if the Fair Tax was passed without exemptions, it wouldn’t be long before exemptions were added. Then we are back on the same old merry go round.
Like I said before, I'm holding my breath.
Not necessarily. There's no way to radically alter the tax code overnight. Just ain't gonna happen. You can make it flatter, and simpler. That would be a good thing. Don't make the perfect the enemy of the good (and it's only perfect in your head, anyway.)
You already are double taxed. In fact, your a minimum of triple taxed on the same money today. First your income, fica, etc... taxes. Then taxes on the earnings from savings, and the embedded taxes you pay when you spend the money.
So again I ask, what is different and worse with the FairTax on this issue?
The way we currently figure taxes is by adding the exclusive rate onto the retail cost of the item. So, if I buy a $100 something in California the 8.25% exclusive tax rate yields an at-the-register price of $108.25.
Doing an apples-to-apples comparison with the Fair Tax rate yields a 30% tax, not the 23% inclusive rate its proponents prefer to spout, for obvious reasons.
Yes. For exclusive taxation. Since the FairTax will replace the INCLUSIVE income tax, an apples to apples comparrison is to speak in terms of an INCLUSIVE rate.
You want some back up? Sure, here it is, printed in Money magazine and quoting the FairTax expert who did the study, Harvard economist Dr. Dale Jorgenson. This is a point I made for 7 years before the fairtaxers were forced to admit it. Excerpt below:
------------
We'll explain this bit about "embedded taxes" in a moment. But first, let's consider what Boortz and Linder appear to be saying. Prices at the store are the same. Your boss stops taking all that money out of your paycheck. Uncle Sam is sending you money instead. And, oh yeah, the government is still up and running.
This just can't happen. "It is practically and logically impossible for the government be collecting the same amount of money as before and have everyone suddenly be better off," says Daniel Shaviro, a tax law professor at New York University.
Part of the problem is the way Boortz and Linder are using the idea of embedded taxes. In an eight-year-old study paid for by AFFT, Harvard economist Dale Jorgenson noted that because the taxes paid by everyone in the chain of production are embedded in the cost of goods, prices could decline an average of 20 percent if all those taxes were scrapped. The FairTax Book devotes an entire chapter to this idea.
What The FairTax Book fails to mention is that prices can only fall this sharply if companies cut wages. I asked Jorgenson about this, and he agreed. Say your salary is $100,000 a year today, but you take home $80,000 after taxes.
Your company is still paying that extra $20,000. In a FairTax world, it will save that money, and be able to lower its prices accordingly, only if it can reduce your salary to $80,000. In other words, your take-home pay is the same as before. Sure, you'd get to "keep 100 percent of your paycheck," as Boortz and Linder repeatedly write, but it would be a smaller paycheck. That's kind of a big thing to leave out.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.