Pitiful portrait

[RobertNashville]

Believe me, those of us who enjoy making money are glad that you don't work for our companies, as well...

Just to be clear on your position, you use poor grammar, poor syntax, and misspelled words to make a point that is both circular and semantic (and which has been repeatedly torn to shreds with real-world examples that you refuse to refute), and it's everyone ELSE who is ignorant?

I don't believe I've ever claimed that I'm error free in the use of the English language or an error free typist. In any case, this is an internet forum, not a graduate level course room; or are you proposing that every post now be error free and contain footnotes and a reference list to be considered acceptable for public consumption?

If anyone who has used poor grammar (in your opinion) or ever misspelled a word or made a typing error were removed from this forum there would likely be no members here (or maybe you believe your posts to be error free ).

Edited March 9, 2011 by RobertNashville

[Guest Lester Weevils]

It depends on the elasticity of demand, as explained many posts ago. Maybe these graphs will better illustrate the theory.

Overtaker's answer seems most accurate. The list of effects in that Tax Incidence wikipedia article can buttress various arguments put forth by both Robert and Mosinon.

The theory of tax incidence has a large number of practical results, although economists dispute the magnitude and significance of these results:

Because businesses are more sensitive to wages than employees, payroll taxes, employer mandates, and other taxes collected from the employer end up being borne by the employee. The tax is passed onto the employee in the form of lower wages.

If the government requires employers to provide employees with health care, some of the burden will fall on the employee as the employer will pass it on in the form of lower wages. Some of the burden will be borne by employer (and ultimately the customer in form of higher prices or lower quality) since both the supply of and demand for labor are highly inelastic and have few perfect substitutes.

Employers need employees largely to the extent they can substitute employees for machines, and employees need employers largely to the extent they can become self-employed entrepreneurs. An uneducated population is therefore more susceptible to bearing the burden because they are more easily replaced by machines able to do unskilled work, and because they have less knowledge of how to make money on their own.

Taxes on easily substitutable goods, such as oranges and tangerines, may be borne mostly by the producer because the demand curve for easily substitutable goods is quite elastic.

Similarly, taxes on a business that can easily be relocated are likely be borne almost entirely by the residents of the taxing jurisdiction and not the owners of the business.

The burden of tariffs (import taxes) on imported vehicles might fall largely on the producers of the cars because the demand curve for foreign cars might be elastic if car consumers may substitute a domestic car purchase for a foreign car purchase.

If consumers drive the same number of miles regardless of gas prices, then a tax on gasoline will be paid for by consumers and not oil companies (this is assuming that the price elasticity of supply of oil is high, which is incorrect. In this case both the price elasticity of demand and supply are very low). Who actually bears the economic burden of the tax is not affected by whether government collects the tax at the pump or directly from oil companies.

If taxes ever rise so much that iPads become unprofitable to sell at the current price, then either the price of iPads will rise or Apple will eventually quit making iPads. The only way Apple can get money to pay its taxes is via profitable sales. So regardless of the level of taxes, by definition Apple's tax money comes from the consumer.

A lot of businesses operate "closer to the bone" than Apple and would more quickly show a price increase if the tax burden is increased.

The problem with economics is that it is a poor tool to discuss the problems, compared to other fields. But it is all we have at the moment.

You can get a pretty good consensus of civil engineers about the state of a dam, but you can't get a good consensus about much of anything from economists. If economics had much real world predictive ability, we wouldn't get so constantly surprised when things turn out better or worse than we expected.

[RobertNashville]

Well, I am mostly waiting for you to defend your position. If you can't no big deal. This, of course, isn't a personal deal. This is more of an economics discussion. I'm more interested in the discussion than necessarily being right. I might learn something and all.

by the way fain != feign

Oddly, I don't think we disagree on very much. We tend to disagree on how corporations price products. You think that Apple sets the price of the new iPad based on a formula where taxes are are a driving source. I think that Apple sets the price of the new iPad based on what consumers are willing to pay.

One of us believes in the free market system and the other one of us is RobertNashville.

I wasn't aware my position needs "defending".

It's difficult to have even a discussion let alone, "defend" a position, when, as you did above and in a few other posts, you ascribe statements to me that I've not made or take what I have said and expand it to create a position I don't hold.

I've never said "taxes are a driving source" in pricing a product. Nor have I insinuated that a company doesn't take into consideration what the market will bear. What I've said, or at least what I've tried to say is that all the costs of a product, including all tax obligations, must be, of necessity, considered in setting the price of a product....any product.

Since you must have missed what I said earlier, I'll quote myself...

"Of course there are many and various considerations when it comes to pricing a product other than just cost; I never said their wasn't...(but) at the end of the day, if a business doesn't collect ALL its costs, including taxes, plus some profit from its customers; it won't be in business very long..."

You can either agree with the above or not; it's okay either way.

Edited March 9, 2011 by RobertNashville

[Guest 6.8 AR]

They're both right on taxation and the idea that taxes impact one or the other will be seen

by one(the business) before the other(the comsumer), but will eventually be borne in the cost

to the consumer and after the final taxation at the POS, which is double taxation. It's a

monster.

That's where the power of the government impacts commerce detrimentally. We've allowed it

to exist too long and that alone makes it more confusing. Add the politicians wanting to overspend

and you get the mess we are in.

[G27]

This thread is the perfect example of exactly what the powers that be want - people expelling energy over semantics and insignificant issues while the larger issues loom over us.

Keep your eye(s) on the ball...

[mikegideon]

hard to see the ball through all that smoke.

[Seaslug]

This thread is the perfect example of exactly what the powers that be want - people expelling energy over semantics and insignificant issues while the larger issues loom over us.

Keep your eye(s) on the ball...

This is perhaps the most reasonable and astute comment that has been made in this entire thread, and it is also a pretty fair representation of how our country (read: government) does business as a whole. Pay no attention to the man behind the curtain...

[Guest 6.8 AR]

I'm surprised it's lasted this long without a major malfunction.

Careful now, been a lot of good banter on this one. I dare say some

have got others thinking. That's all I care about. Every little bit helps