Biden's tax hike simplified.

[Questerr]

Biden will jack up the corporate tax about 8% on American companies. So, a $30,000 Ford, Chevy, or Dodge will now cost $32,400 (what, you thought the company would eat the tax? Haha.)
The foreign built cars will not be subject to the tax.
That's just an example. All American companies will be hobbled like that, unless they move.
End result? Do I really have to spell it out for you?

You've never heard of the concept of "Tax Incidence" before, have you?

 

[noonereal]

Biden will jack up the corporate tax about 8% on American companies. So, a $30,000 Ford, Chevy, or Dodge will now cost $32,400 (what, you thought the company would eat the tax? Haha.)
The foreign built cars will not be subject to the tax.
That's just an example. All American companies will be hobbled like that, unless they move.
End result? Do I really have to spell it out for you?

No problem, we will have China pay. LOL

Clue, the tax is on PROFITS so you little example of it costing the end user more is completely bogus.

 

[noonereal]

You've never heard of the concept of "Tax Incidence" before, have you?

LOL, he ABSOLUTELY hasn't. Silly question. LOL

 

[Questerr]

No, they would not as they are not American companies. If they wanted an equal tax for foreign owned companies instead it would be a value-added tax.

You get that every one of those companies has a United States division and that those divisions pay US taxes, right?

 

[Grandpappy]

It's a simple concept really. If it costs more to operate a business due to higher taxes and more stringent regs, product prices will reflect the difference. Tax deductions from losses only go so far and are temporary.

 

[SimpleTom]

Biden will jack up the corporate tax about 8% on American companies. So, a $30,000 Ford, Chevy, or Dodge will now cost $32,400 (what, you thought the company would eat the tax? Haha.)
The foreign built cars will not be subject to the tax.
That's just an example. All American companies will be hobbled like that, unless they move.
End result? Do I really have to spell it out for you?

First, you are just misunderstanding how taxes work. Taxes are on profits and not revenues (Ford's profit margin in North America was 8.7% of that $30,000)... It is difficult to calculate the effects of taxation on the cost of goods because increases flow through the supply chain, but it is much more likely the Dodge will cost $30,600 rather than $32,400.
Next, tax increases are not borne by consumers alone. When companies are taxed at higher rates unavoidable taxes are distributed between owners, consumers, and workers. In reality, workers get a lot of the pain rather than companies.
Finally, U.S. companies don't pay that much in Federal taxes. Corporate taxes make up about 7%-9% of Federal revenues, just for perspective the Social Security and Medicare taxes make up about 35%-36% of Federal revenues. The corporate tax is about 2% lower than it used to be, but it is still not the thing that is likely to have a significant effect on your buying power. Corporations in the U.S. would not struggle at all with significantly increased taxes, you could easily go up to 60% and the effect would be minimal on U.S. corporations and consumers. It just doesn't work that way.
______
However, you should support lower corporate taxes because higher U.S. tax rates puts oligopoly pressure on the market and makes domestic companies less competitive than multinational corporations. If you have intellectual property (which practically every MNC does) you can move profits from the U.S. to oversees segments reducing your effective tax rate and creating a profit advantage over your competition just from tax avoidance. This can be a fairly significant amount, at one time Dr. Pepper Snapple ran an effective tax rate 10% higher than competitors with an international presence.

 

[Questerr]

It's a simple concept really. If it costs more to operate a business due to higher taxes and more stringent regs, product prices will reflect the difference. Tax deductions from losses only go so far and are temporary.

Do prices drop when taxes are lowered? Do you have any idea what "Tax incidence" is?

 

[George50]

Biden will jack up the corporate tax about 8% on American companies. So, a $30,000 Ford, Chevy, or Dodge will now cost $32,400 (what, you thought the company would eat the tax? Haha.)
The foreign built cars will not be subject to the tax.
That's just an example. All American companies will be hobbled like that, unless they move.
End result? Do I really have to spell it out for you?

How about understanding what you are talking about before you post?

First in order for your calculations to be correct automakers costs would have to consist of 100% taxes. That’s way beyond even Haha “reasoning.”

Second, Trump tariffs are responsible for more added auto makers costs than Biden’s tax increases would.

 

[Questerr]

How about understanding what you are talking about before you post?

First in order for your calculations to be correct automakers costs would have to consist of 100% taxes. That’s way beyond even Haha “reasoning.”

Second, Trump tariffs are responsible for more added auto makers costs than Biden’s tax increases would.

People who apply "common sense" to complex economic questions are a special kind of ignorant.

 

[Grandpappy]

How about understanding what you are talking about before you post?

First in order for your calculations to be correct automakers costs would have to consist of 100% taxes. That’s way beyond even Haha “reasoning.”

Second, Trump tariffs are responsible for more added auto makers costs than Biden’s tax increases would.

Ah, but are you forgetting all the added costs from higher taxes on the parts suppliers, transport companies, other ancillary industries?

 

[joko104]

You get that every one of those companies has a United States division and that those divisions pay US taxes, right?

Don't know.

 

[Deuce]

Would you enjoy $6 a gallon gasoline? Vote Biden!

What, the media didn't tell you that? And you've already voted? Shame. Like really small cars? Maybe a motor scooter as primary transportation, just like in Vietnam.....fun!

I'll take $6 a gallon gasoline over nazis, thanks.

 

[MTAtech]

Actually, far more than that. Added fuel economy regs costs, higher fuel costs due to oil industry shutdowns will cause higher operating costs. That scooter is lookin' pretty good, huh?

Once again, we had higher taxes and all those regulations under Obama and cars and trucks weren't more expensive than they are now. You're pedaling complete baloney.

 

[George50]

Ah, but are you forgetting all the added costs from higher taxes on the parts suppliers, transport companies, other ancillary industries?

Ah, but apparently you are still clueless. The taxes are not 100% of the auto manufacturers cost as you post implies and still Trumps tariffs add more cost than Biden’s tax increase. The vast majority of the cost is raw materials, labor, plant and equipment and the cost of money for anyone in the supply chain.

 

[MTAtech]

It's a simple concept really. If it costs more to operate a business due to higher taxes and more stringent regs, product prices will reflect the difference. Tax deductions from losses only go so far and are temporary.

As I said previously and you never addressed, car prices did not decrease after the 2017 tax cut on corporate taxes. Thus, prices will not rise when those taxes are returned to their previous levels.

Your “simple concept” is really an incorrect concept.

Taxes are not passed onto the consumer in the form of higher prices. As proof, General Electric hasn't paid federal income taxes in at least a decade. Are GE's prices to their customer's any less expensive compared to their competition that pays taxes? No.

David Cay Johnston explains:
Taxes are on profits, and profits are calculated at the end of a tax year by adding up all the revenue and subtracting all the costs. When a product or service is sold the company doesn't really know yet how much profit, if any, it will have at the end of the year, so it doesn't know what the tax will be, so how can it adjust prices? But if a company was able to just raise prices based on anticipation of profits, then the result would be that profits would be higher because of the higher price charged, which means taxes would be even higher, so the company should have raised prices even more, but that means the profit would be even higher, so they have to go back and charge more, but then ... I think you are starting to see how silly this idea of raising prices to cover taxes can get.

The reality is that a business always charges the most it can charge to maximize revenue and profits. Economist call this the peak of the price demand curve. If they raise prices, demand falls enough to reduce revenues and profits. If they lower prices, demand increases but total revenue falls because of lower pricing. Let's say Apple charges $1,000 for an iPhone, even though it costs less than $250 to manufacture an iPhone. Demand dictates the price. Does anyone really think Apple would drop the price of iPhones if manufacturing costs were lower? Of course not. Likewise, if Apple's tax bill was lower, the savings would go to Apple and its shareholders, not consumers.

 

[Nickyjo]

Apparently, the Democrats way to grow the economy is to tax the **** out of it.....and use government spending on everything....

Democrats tax and spend. Republicans spend but don't tax. Who's more responsible?

 

[Nickyjo]

First, you are just misunderstanding how taxes work. Taxes are on profits and not revenues (Ford's profit margin in North America was 8.7% of that $30,000)... It is difficult to calculate the effects of taxation on the cost of goods because increases flow through the supply chain, but it is much more likely the Dodge will cost $30,600 rather than $32,400.
Next, tax increases are not borne by consumers alone. When companies are taxed at higher rates unavoidable taxes are distributed between owners, consumers, and workers. In reality, workers get a lot of the pain rather than companies.
Finally, U.S. companies don't pay that much in Federal taxes. Corporate taxes make up about 7%-9% of Federal revenues, just for perspective the Social Security and Medicare taxes make up about 35%-36% of Federal revenues. The corporate tax is about 2% lower than it used to be, but it is still not the thing that is likely to have a significant effect on your buying power. Corporations in the U.S. would not struggle at all with significantly increased taxes, you could easily go up to 60% and the effect would be minimal on U.S. corporations and consumers. It just doesn't work that way.
______
However, you should support lower corporate taxes because higher U.S. tax rates puts oligopoly pressure on the market and makes domestic companies less competitive than multinational corporations. If you have intellectual property (which practically every MNC does) you can move profits from the U.S. to oversees segments reducing your effective tax rate and creating a profit advantage over your competition just from tax avoidance. This can be a fairly significant amount, at one time Dr. Pepper Snapple ran an effective tax rate 10% higher than competitors with an international presence.

The argument that US corporations have to deal with higher tax rates than in other countries seems to have merit. On the other hand, if corporations are people, have the right to unlimited political donations as part of free speech in certain cases, why not tax them at the same rates as we do people? I can hear the "Harrumphs" already. But no, we give them special status, e.g., the individual tax cuts the GOP passed expire. Corporate tax cuts don't. What a surprise!

 

[Integrityrespec]

Will Toyota, Nissan, Mazda cars built in American be subject to the tax? Yes or No.

With Trump's cooperate tax cuts did the price of a Ford, Chevy and Dodge go down? Hint. Nope. You didn't expect them to pass the savings on to the buyers did you?

Did the number of jobs rise? Did the employees see pay raises. The answer is yes.

 

[ALiberalModerate]

Biden will jack up the corporate tax about 8% on American companies. So, a $30,000 Ford, Chevy, or Dodge will now cost $32,400 (what, you thought the company would eat the tax? Haha.)
The foreign built cars will not be subject to the tax.
That's just an example. All American companies will be hobbled like that, unless they move.
End result? Do I really have to spell it out for you?

That is not how corporate income taxes work. A company doesn't pay taxes on gross revenue. A company pays taxes on receipts minus all expenses, which include, but are not limited to: Employee compensation, cost of materials, cost of production, advertising, interest, depreciation, and so on. An 8% increase in corporate income taxes after deductions would be less than 100 dollars per vehicle.

 

[sjmay]

Democrats tax and spend. Republicans spend but don't tax. Who's more responsible?

Like I said, Democrats plan is to tax the hell out of you, and say it's for the greater good....aka government spending.

Show me ONE Republican backed government spending program that wasn't precedented on crisis......

 

[CaughtInThe]

Utterly baseless and ignorant fear mongering

It works on the rubes though.

 

[Nickyjo]

Like I said, Democrats plan is to tax the hell out of you, and say it's for the greater good....aka government spending.

Show me ONE Republican backed government spending program that wasn't precedented on crisis......

Ok, what democrat created programs would you eliminate? As to your last challenge, probably plenty of useless military programs.

 

[mike2810]

Did the number of jobs rise? Did the employees see pay raises. The answer is yes.

did that answer my question? The answer is no.

 

[sjmay]

Ok, what democrat created programs would you eliminate? As to your last challenge, probably plenty of useless military programs.

Useless Military? Interesting......

As far as what I would eliminate? Not ure if eliminate would work, I think tightening up the parameters on pretty much every government program would work better....

 

[Man0in3Black]

Don't know.

Honest question, you didn’t know Honda has 3 plants here in Ohio, with their main plant in Marysville?