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Passing the Cost to the Consumer from a Business Owner's Perspective

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posted on May, 12 2014 @ 09:48 AM
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a reply to: AugustusMasonicus

Ok. A couple of posts seem to want to make this a democrat problem. Let us say that the Republicans win all three legs of the seats of power. What would you want them to do?

I vote every election, every time. But not straight partisan. I went into the work force in 1968. I saw what happened to laborers after Ronald Reagan. Do the Republicans have anything to offer to the laborer and the businessman other than "trickle down"? Will they get us into more wars and expect the laborer and his children and grandchildren to pay for it? I want all businesses to succeed. But not on corporate welfare.




posted on May, 12 2014 @ 09:50 AM
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originally posted by: wayforward
Its quite a shocker to me that almost no Democrats grasp such a simple concept. Businesses pass their costs along to their consumers and then tack on a profit margin. Corporate taxes is no exception.


I am not sure if they are Democrats or not but I am surprised by the outright denial by some of how businesses operate in the real world as they try to offset this fact with anecdotal stories of a business someone else ran. If they actually ran that business they would have a rather rapid change in perspective.




edit on 12-5-2014 by AugustusMasonicus because: networkdude has no beer



posted on May, 12 2014 @ 09:54 AM
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originally posted by: MOMof3
Ok. A couple of posts seem to want to make this a democrat problem. Let us say that the Republicans win all three legs of the seats of power. What would you want them to do?


The premise of the Original Post is not a Republican/Democrat exercise as they are both notorious for allowing the government to grow and pass its costs to the consumer. A smaller government would, by its nature, lessen the burden of the tax paying consumer who currently gets hit on both ends, the earning and spending portion, of the equation.

I vote every election, every time. But not straight partisan. I went into the work force in 1968. I saw what happened to laborers after Ronald Reagan. Do the Republicans have anything to offer to the laborer and the businessman other than "trickle down"? Will they get us into more wars and expect the laborer and his children and grandchildren to pay for it? I want all businesses to succeed. But not on corporate welfare.


The solution is less of a tax burden but I honestly do not see that happening regardless of who is in power.

Corporate welfare is not something I condone as I pointed out earlier. The risk/reward aspect of entrepreneurship is eliminated when the threat of failure is mitigated by tax payer remuneration for your poor business decisions.



posted on May, 12 2014 @ 10:25 AM
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originally posted by: Sremmos80
a reply to: AugustusMasonicus

No I am not missing it.
You are saying that the customer should keep the doors open by paying for every increase in cost it takes to run your business while you rack in the profit.


No, I think you *are* missing the point - customers have the power of the purse, they are under no obligation to buy his product, and he can't arbitrarily raise his prices beyond what customers will pay, or beyond the price that competitors charge for equivalent product. If McDonalds were to double their menu prices, their total revenues would almost certainly fall, as people sought alternatives from other suppliers. Quadruple their prices, and they'll quickly be out of business, and Burger King rules - and who'll then raise their prices as there's less competition - but that's another discussion. (By the way, speaking of burgers and your "socializing business" thought - check out the $16 Amtrak burger - it costs $16, sells for $9.50, with $6.65 being paid for by taxpayers.)

What he *is* saying is when "you" (the government, or whatever) increases his costs, through increased taxes, or regulatory means, like raising his benefits of salary costs, he has the choice of raising his prices (which are constrained by competition) or accepting less profit, or being made unprofitable altogether.

I dunno, is this really that hard to understand? If you raise costs, like taxes on businesses, those tax increases are ultimately borne by the consumer of that business, and not the business itself.

Think of a gas station - generally speaking, they make about 5 to 10-cents on a gallon of gas. The cost of gasoline is pretty well fixed for everyone - if they tried to charge $8 a gallon, no one would buy it from them. Let's say they buy gas at $3.50 (burdened price, with taxes, etc), and sell it for $3.60. Out of that 10-cents a gallon, they have to pay rent, insurance, employees, taxes, utilities, maintenance, supplies, etc.

Now, If the government added a 10-cent a gallon tax, (or some other regulation that increased his fixed costs), raising their cost to $3.60 a gallon, do you still expect them to sell the gas at $3.60? How will they pay their employees, their rent, their taxes? No, they'll raise the price to $3.70 - and who pays that? The consumer.

To extend the discussion a bit, there are some that believe that lowering his fixed costs, via lower tax/regulation, allows him to lower his optimal price point, which can increase sales, revenue, and profit, while maintaining the same tax payments. That profit can be re-invested in the business, give employees raises, or perhaps the owner might take it all for himself, where he'll be taxed on it as income. Then he can put it in the bank, who loans that money out to others that want to start a business, or buy a home. Those who make money don't set their money on fire, they invest it, so that other businesses can start and grow.



posted on May, 12 2014 @ 10:35 AM
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originally posted by: squittles
What he *is* saying is when "you" (the government, or whatever) increases his costs, through increased taxes, or regulatory means, like raising his benefits of salary costs, he has the choice of raising his prices (which are constrained by competition) or accepting less profit, or being made unprofitable altogether.


Excellent post and this about sums it up. The last two were not options as I had my own financial obligations which left passing the costs to the consumer as the only viable avenue.



posted on May, 12 2014 @ 10:55 AM
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a reply to: squittles

That's an "old school" academic economic model that was phased out quite some time ago.

The era of subsidies, bailouts and corporate welfare have thrown classic supply and demand under the bus and has forced many small business to close. Preferential treatment for some and added burdens on others exemplify the "trickle on" para dime.

Speculation has changed everything into "insider" style.... School boy MBA courses are BS.

Talk about "real world"..... most don't even know what the "real world" is anymore.
It's so intrinsically married to politics and corruption that business has entered the world of the surreal.

Dial up style thinking in the quantum world just don't cut it anymore.


www.nytimes.com...
edit on 12-5-2014 by olaru12 because: (no reason given)



posted on May, 12 2014 @ 11:21 AM
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Real world economics?.

Real world economics is living in a remote area of the planet which experiences cold winters and being forced to work enough at chopping firewood during the warmer seasons to keep from freezing to death in the cold season.

In the old days they didn't have a business nearby to front you some firewood, you froze.

Exchange firewood for credit above and it becomes pretty obvious why the system doesn't work.

In 2008, there was this thing called a "credit crunch", nobody understood that they were being paid with short term loans, a lot of employer were forced to lay off employees because they couldn't take out loans to pay their employees.

Credit is not the same thing as real actual capital, where was it that nearly everyone forgot this?.

a reply to: olaru12



posted on May, 12 2014 @ 11:23 AM
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Making a lot of money and showing it makes you a target for the freeloaders. Having lost 2 successful business to someone that could do better and had the leverage to do it. I will never again partner up with anyone. Both those businesses are now gone because they spent all the easy money and didn't know how to run the business. I might even pick the last one in a tax sale next spring. The customer is everything treat them bad and they will go away.

Too many price increases and changing of phone numbers is always a bad sign. Whenever somebody gives me a business card with their number hand written it goes in the trash.

I'm back to working 40 hours a week and thats fine with me




posted on May, 12 2014 @ 12:39 PM
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originally posted by: Sremmos80
a reply to: seeker1963

Yes they do it for money, that doesn't mean you can make other people pay YOUR expenses it takes to run YOUR business so you can make MORE money.

Why do I need to pay the companies taxes? You made the decision to open the business, you knew they could pass new laws that made new taxes.
Why do I need to pay for that?


You have to be trolling. Nobody that can write complete sentences can't see that the only way a business can pay expenses is SOLELY through income from customers. You can't even walk upright and think like that.

/TOA



posted on May, 12 2014 @ 01:18 PM
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a reply to: The Old American

Ya i already admitted defeat many pages ago



posted on May, 12 2014 @ 01:26 PM
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originally posted by: Sremmos80
Ya i already admitted defeat many pages ago


I would not call it 'defeat', you learned something. Which is pretty much the reason all of us are here. It takes a lot to admit you have changed your perspective so cheers to you.



posted on May, 12 2014 @ 02:40 PM
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originally posted by: AugustusMasonicus

originally posted by: Sremmos80
Yes the costumer keeps the doors open, not you living in a fancy house with 5 cars.
The costumer does not need to lining your pockets, and taking on the cost's and taxes that come with owning a business..


Nobody forces you to shop somewhere, people are free to spend their money wherever they choose.


What a sad sad day in Mudville, that this needs to be explained to people these days.

The reason anyone starts a business is to make money. That is the sole objective of any company.
The path to make money, is to offer a product and/or service.
The employment of people is a means to be able to offer said product and/or service.

I still don't see where it is anyone's business as to how much an owner/shareholder makes.
This kind of narcissistic attitude is like walking over to your neighbor and telling them they can't have multiple TVs in their house.

If someone doesn't like the fact that a company provides a profit to the owner, they have the freedom to not be a customer for that company, unless you are the Health Insurance Companies, or GM or any bank.

And I do love how people have the attitude of telling a company what they can pay the owner/shareholder, but scoff at the Govt telling people that receive handouts that they need to submit to a drug test.


Well, this was bound to happen as class warfare is used more and more and less and less people actually run their own company. Or pay taxes.



posted on May, 12 2014 @ 02:55 PM
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originally posted by: macman
Well, this was bound to happen as class warfare is used more and more and less and less people actually run their own company. Or pay taxes.


This was one of the reasons I wanted to create the thread. When people yell out, 'Tax them!', what they are really yelling out is, 'Tax me!'.

Because that is exactly what will happen.



posted on May, 12 2014 @ 04:42 PM
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originally posted by: AugustusMasonicus

She asked, "Why are you charging me tax on my food?"

I replied, "I am not charging you tax, the State of New Jersey is charging you tax. They only ask us to collect it."


That was hilarious, thanks for sharing.
Got a good laugh.



posted on May, 12 2014 @ 04:46 PM
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originally posted by: AugustusMasonicus

originally posted by: macman
Well, this was bound to happen as class warfare is used more and more and less and less people actually run their own company. Or pay taxes.


This was one of the reasons I wanted to create the thread. When people yell out, 'Tax them!', what they are really yelling out is, 'Tax me!'.

Because that is exactly what will happen.


Someone please force our Representatives to read this thread !
If only we could jam the ideas into their subconscious.



posted on May, 12 2014 @ 04:46 PM
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originally posted by: muzzleflash
That was hilarious, thanks for sharing.
Got a good laugh.


Yeah, those poor out of towners. They were always caught off guard by the food tax.

"You tax food?!?"

"This is New Jersey, we tax everything."



posted on May, 12 2014 @ 04:53 PM
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I'm a socialist, but I believe that if you're going into business, your 1st goal should be to maximize profit. Of course, it's tempered by what the market will bear. That can't be helped. Making as much money as you can is the goal of capitalism. The company I work for is climbing every year on the Fortune 500. It's growing like crazy. Each year we get less hours to work with. Our annual raises are now fixed. We get cheaper tools. Consumer costs rise. My company has an obligation to use employees and customers to line the pockets of the owners and shareholders. This is the American way. Love it or leave it.

Regarding taxes, I don't trust the American government with anything, much less my money.
edit on 12-5-2014 by gentledissident because: (no reason given)



posted on May, 12 2014 @ 05:02 PM
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a reply to: AugustusMasonicus

Most places I have been to, certain items do avoid taxation.
Usually it is core grocery items like milk or produce, so you would have to check your state for the specific list (and regularly as it changes).

I have never heard of cooked food from a restaurant avoiding taxation. That would probably be because it's considered a luxury to have someone else make a meal for you.

And who checks the tax fees on their ticket than complains to the cashier anyhow? It seems rather unbecoming of a patron. But I'm sure you have dealt with far worse.

I only go 'out to eat' when I know I can afford it. That means if I go to a nice establishment I want to have at least 2x $ the estimated full cost available, just to play it safe. This way I can order whatever and still have enough to tip my waiter/waitress according to what they merit. I'm the preferred customer though, haha.
edit on 5/12/2014 by muzzleflash because: (no reason given)



posted on May, 12 2014 @ 05:08 PM
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originally posted by: muzzleflash
I have never heard of cooked food from a restaurant avoiding taxation. That would probably be because it's considered a luxury to have someone else make a meal for you.


I was always under the impression that prepared food was taxed everywhere but this may not be the case.

And who checks the tax fees on their ticket than complains to the cashier anyhow? It seems rather unbecoming of a patron. But I'm sure you have dealt with far worse.


Sure did. Like the people who thought it was okay to bring their own meals and sit at one of our tables and eat for free.

I only go 'out to eat' when I know I can afford it. That means if I go to a nice establishment I want to have at least 2x $ the estimated full cost available, just to play it safe. This way I can order whatever and still have enough to tip my waiter/waitress according to what they merit. I'm the preferred customer though, haha.


Same here. As a former restaurateur I know the value of being a 'regular' and treating the help well. You would be surprised what goodies and perks you get from the owner/management.



posted on May, 12 2014 @ 05:09 PM
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originally posted by: gentledissident
I'm a socialist, but I believe that if you're going into business, your 1st goal should be to maximize profit.


Thank you for your input. I am glad to see another person understands how a business operates.


Regarding taxes, I don't trust the American government with anything, much less my money.


I could not agree more.




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