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| Thread: Fannie Mae/Freddie Mac Bailout |  This thread is pages long: 1 2 3 4 5 6 · «PREV |
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DeadMan
Known Hero
The True Humanitarian
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posted March 30, 2009 03:47 PM |
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Wal-Mart is the perfect example of what's wrong with the world - how personal greed results in destruction of a community. And it's not just the managers' fault - the customers are just as guilty, as Wal-Mart could not survive without customers. If the consumers would just get a social conscience and accept higher prices and not be so greedy, Wal-Mart would not be able to do what it does.
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I don't matter. You don't matter. But we matter.
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Mytical
Responsible
Undefeatable Hero
Chaos seeking Harmony
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posted April 05, 2009 01:19 PM |
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Problem is by the time it gets to consumers, a product has been taxed many times, as well as a 'profit margin' attached to it.
The Raw Material person sets a price. Lets say for sake of argument that the price is $1. They pay tax on it, so that is 1.07. The manufacturing people buy it for that. Well then they have to consider overhead (electricity, storage, salary for workers, etc) so lets say that after everything it cost them only 5 cents to make 1 finished product (which means they make a WHOLE lot of them in an hour but that is another story). Now they want a profit so they tack on lets say only .25c (the profit margin is closer to .40c but lets keep it low). So now the product cost 1.30 + .07 (the tax they pay) = 1.37.
They sell to Wholesellers buy mass quantities of this item at this price. They too have to pay tax and overhead (Shipping, electricity, etc). Lets say again 7% for tax and only .05c for overhead. 1.37 = 7% = 1.47 (they always round up) + .05c for overhead = 1.52. Now they want a profit..so they add another .15c (again this is a REALLY low estimate). So now that object cost 1.67. So far 67% MORE then when it first started. (That is with low overhead and low profit margin, by now it would actually be over 2x the price easy).
Wholesellers sell to retailers. Who again pay sells tax (7%) and overhead .05c. They too want a profit. Lets say that these retailers are REALLY generous and only want .05c profit per item. So you are looking at 1.89c.
Retailers sale to you. Now you have to pay sells tax, but no overhead, and you get no profit. So that 1.89 becomes 2.02. If you don't think they pass their tax on .. you are living in a fantasy land. So that item that was bought somewhere for $1, you pay 2 for. And MOST of that is tax, with each place getting only a small amount of profit.
I worked at walmart..I have seen their profit ratio. It is closer to .20c per dollar. Though sometimes it does go down to .10c per dollar they paid for it, and I have seen .40c profit per dollar items as well. So actually by the time it gets to you if NO tax was paid .. at all..realistically it would still be +.30c (Manufacturer) + 20-30c (wholesaler) and +10-40c retailer..meaning minimum of .60c increase before considering tax. And up to 3x as much including tax.
However, these businesses do need to make a profit, and taking away the tax is probably a bad thing.
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mvassilev
Responsible
Undefeatable Hero
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posted April 05, 2009 03:57 PM |
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Quote:
by the time it gets to consumers, a product has been taxed many times
If this were Europe, this statement would be true. But America doesn't have a value-added tax - only a sales tax that the consumer pays. So none of the people in the supply chain pay sales tax (if they're in America, at least). They usually don't pay sales tax - only the final buyer does. (Income tax, though, is another story.)
And if it weren't for them trying to make profits, to get that product, you'd have to find the original producer of the first part, then find someone to do something to it, find somebody else to do something else, and so on. To do so would be incredibly time-consuming and you would lose out.
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Eccentric Opinion
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Corribus
Hero of Order
The Abyss Staring Back at You
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posted April 05, 2009 04:01 PM |
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Yes, I've always felt it's a bit unfair to have an income tax AND a sales tax. You're basically being taxed on your earnings twice.
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I'm sick of following my dreams. I'm just going to ask them where they're goin', and hook up with them later. -Mitch Hedberg
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mvassilev
Responsible
Undefeatable Hero
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posted April 05, 2009 04:02 PM |
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Yeah, but if he had no sales tax, we'd have a higher income tax, and vice versa.
I'd eliminate the sales tax for a higher income tax, though. (Except in the case of gasoline.)
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Eccentric Opinion
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