Coburn's Viagra Amendment Goes Flaccid

[fotd]

In the past lenders mailed the borrower a 1099 for the difference between the price the house sold at foreclosure auction (it usually sells to the bank) for and the balance on their loan at the time.  The gov't may have changed that due to the record number of foreclosures but generally a defaulted loan is treated as income.

That's obvious. What's the new rule?

" But, I believe the Federal government has become too big, costly..." Conan, with all due little respect when the population multiply's government must too. Sorry, but it is the nature of governments that look out for the taxpaying citizenry. Maybe birth control could solve this issue.

[Conan71]

That's obvious. What's the new rule?

" But, I believe the Federal government has become too big, costly..." Conan, with all due little respect when the population multiply's government must too. Sorry, but it is the nature of governments that look out for the taxpaying citizenry. Maybe birth control could solve this issue.

Of course they must get bigger to keep up with increasing population.  They needn't get bigger on a whim.

They might want to control that immigration thingy better before they start mandating birth control.  I can think of a few people for whom retroactive birth control sounds like a great option.

[Gaspar]

In a competitive market, it will sometimes or even often benefit the corporation to not pass through increased taxes through increased sales prices of their goods, as profits will be reduced further than the tax alone causes due to pricing some of the demand out of the market.

It all depends on the amount of competition and the demand elasticity of the good.

Oh good, you're taking in consideration competition.  So then, lets look at an entire sector. . . say Locksmiths (sector SIC 7699).  

If the government issues a special tax on locksmiths, say an extra 3%.  Do you anticipate a change in the charge for the consumer product or service?

[fotd]

Of course they must get bigger to keep up with increasing population.  They needn't get bigger on a whim.

They might want to control that immigration thingy better before they start mandating birth control.  I can think of a few people for whom retroactive birth control sounds like a great option.

There we go again... you know, that "immigration thingy."

Bigger on a whim? That's what happens when Conan gets stroked but not the government.

[Conan71]

Bigger on a whim? That's what happens when Conan gets stroked but not the government.

I hear when I get really old, it'll take an act of Congress, not a whim.

[nathanm]

If the government issues a special tax on locksmiths, say an extra 3%.  Do you anticipate a change in the charge for the consumer product or service?

Why don't you try something which, like most industries, has significant demand elasticity? You might as well have picked beer distributing, another area in which competition has little bearing on pricing.

You know, something more representative of capitalism.

[Gaspar]

Why don't you try something which, like most industries, has significant demand elasticity? You might as well have picked beer distributing, another area in which competition has little bearing on pricing.

You know, something more representative of capitalism.

Not really sure of the reason behind your request or the amusing over-use of the term "elasticity."  But whatever, lets go for Tire manufacturers (SIC 3011).  Same question.

If the government issues a special tax on tire companies, say an extra 3%.  Do you anticipate a change in the charge for the consumer product?

(I am hopeful that Tires are more "capitalistic?")

[nathanm]

Not really sure of the reason behind your request or the amusing over-use of the term "elasticity."  But whatever, lets go for Tire manufacturers (SIC 3011).  Same question.

I don't know why you find one of the fundamental notions of economics amusing, but whatever.

Again, it depends. If there is enough competition (and a lack of collusion) and the buyers are price sensitive, it will behoove the manufacturer to absorb the tax, as they will sell more tires and make more money by doing so. If the buyers are not so price sensitive, the company will of course pass on the cost of the tax.

As I'm sure you're aware, being a businessperson, it's a matter of calculating whether you'll make more money with a lower margin and higher unit sales or make more money with a higher margin and lower unit sales.

There is no one size fits all answer, sorry.

[we vs us]

Not really sure of the reason behind your request or the amusing over-use of the term "elasticity."  But whatever, lets go for Tire manufacturers (SIC 3011).  Same question.

If the government issues a special tax on tire companies, say an extra 3%.  Do you anticipate a change in the charge for the consumer product?

(I am hopeful that Tires are more "capitalistic?")

What are your raw material costs?  What are your labor costs?  Ancillary costs, like facility, packaging, shipping, advertising?

How many tires are already in seller's stores? How many have you made and are in inventory?  How will international tire sellers react?  

What's your salesforce look like?  Have you been aggressively selling or coasting on existing relationships?  

And what's your existing margin? What are you making on your tires now?  A small profit?  A healthy profit?  A ridiculous profit?

There are a million other large and small variables that can impact whether or not that tax will affect consumer prices.  It might be in the best interest of the manufacturer to swallow the increase; it may be in its interest to pass it along to the consumer.  And this doesn't mean, necessarily, that you and I will see higher prices at Sears Auto . . . Sears itself may swallow the cost as it retails the product to you and me.  It may also double the cost.  More likely, the price will go up a few cents or even (gasp!) a dollar, and you and I will possibly remark on it as we sit together in the waiting room while our tires are being rotated . . . or possibly not.  We might just sit there and grumble about how disconnected the entire healthcare industry has become from traditional supply and demand economics.

[JeffM]

Gene Stipe wasn't a Publican.

He was probably the worst this state has ever seen.  Probably even a few points worse than Jim Inhoffe.  Kind of a southeast Oklahoma Huey Long wannabe.

Speak of the devil.......

[fotd]

We just got Stiped!

[JeffM]

Of course they must get bigger to keep up with increasing population.  They needn't get bigger on a whim.

They might want to control that immigration thingy better before they start mandating birth control.  I can think of a few people for whom retroactive birth control sounds like a great option.

[Red Arrow]

Again, it depends. If there is enough competition (and a lack of collusion) and the buyers are price sensitive, it will behoove the manufacturer to absorb the tax, as they will sell more tires and make more money by doing so. If the buyers are not so price sensitive, the company will of course pass on the cost of the tax.

As I'm sure you're aware, being a businessperson, it's a matter of calculating whether you'll make more money with a lower margin and higher unit sales or make more money with a higher margin and lower unit sales.

There is no one size fits all answer, sorry.

If there is enough competition, everyone will absorb the tax and you will probably not see enough increase in sales to offset the increased tax. (Obviously implies more than a few cents worth of tax.)

So far everyone seems to be working in quantity of dollars rather than percent return on investment.  A small family business may be happy with  "enough" money.  A larger, probably publicly owned, business with investors wanting a percentage return may make it impossible to accept a lower margin.  Depends on how much in both instances.

[Conan71]

Okay, that's the funniest bucking spoof poster I've seen in awhile. Pure awesomeness.

[nathanm]

Okay, that's the funniest frakking spoof poster I've seen in awhile. Pure awesomeness.

I used to live down the street from the Duggars, so it has special meaning to me.