........relevance.......??

I've been intrigued by the FairTax proposal for quite some time. Is this thread about "FairTax" or "FlatTax"?

The most overlooked positive point in the FairTax plan is the reimbursement of taxes paid on basic necessities. This is proposed by way of a refund check to each taxpayer for the estimated taxes paid up to a basic amount.

Here are a couple of links to explore:

http://www.fairtax.org
http://www.fairtax.org/site/PageServer?pagename=about_main

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Follow closely because this is really complicated: Companies either raise prices to cover expenses or they do not. If they do not, they fail.

How's that?

B

Incorrect. I own a coffee roasting company. Often the prices of green coffee go up for a bit, but I don't raise the price of my coffee. Gas goes up that I use to fire the roaster. In these cases I make slightly less per bag than I do when the prices are down. I choose not to keep raising the price per pound because I would rather keep my customers happy...as long as I make a profit.

One of the biggest con jobs businesses have pulled on he public is to covince them that they not only have to turn a profit, but they have to make x percentage points of profit. If a company is making a profit they can stay in business, wether is is 10 percent or 100.

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1983 300D
1978 BMW R80/7
1997 Jeep TJ

Apparently it's too complicated for you. The airlines could not raise prices and they still remain in business. I couldn't have made that more clear to you in the aforementioned post. Sorry you missed it.

Their capability of raising prices is still quite limited. The solution was to reduce costs and increase yield via increase of load factor.

Price is only one factor in whether a company is successful.........or not. Cost is usually the more significant factor.

That's the decision o fthe business owner of corporate management, isn't it? I mean, you have a choice of whether or not to raise prices to compensate for increased business costs or to absorb the cost from your profit.

Using the airline example, those companies sign fuel contracts that act something like a futures contract. If the company buys 10 gal in the future for $5/gal and the price in the future is actually $20/gal, they look like geniuses and will be able to charge significantly lower tickets, give bigger dividends, etc. That's why Southwest was sitting so pretty post 9/11 compared to their competitors. It is also why Southwest is beginnign to hurt right now: their fuel contracts caught-up with the "real world" prices.

So let's say you enter a contract with "Andean Coffee" for Nov 2008 of $1.50/pound. Your competitor bought a November future on a different date of $1.75/pound. A third competitor buys Nov coffee at $.75/pound. In November of 2008 the market value is actually $1.25/pound. All of you could adjust your prices accordingly or not -- that's your choice. The chances are pretty good that Mr $.75/pound is going to make more money if prices stay unchanged. Or he could try to expand his market share by offering a special of some sort. Or increase his advertising budget.

The end result is the same: It's the responsibility of the company owner to decide how to react to the change in profit margin. Of one thing we are certain: If the profit margin disappears, so does the business.

Apparently it's too complicated for you.

If price is only one factor among many, implying others are equally important, what happens if a company charges nothing for it's product?

If the burden is increased by X% on the company, that X% doesn't magically disappear -- it has to come from somewhere. Either it gets taken out of the consumer's wallet or out of the supplier's wallet or by increasing efficiency within the business. There are no other choices.

Glad you finally figured it out.

And, in conclusion, there is no basis for supporting an argument that the customer pays the tax in all cases, which was the fundamental disagreement. He might pay the tax if the company raises prices by an equivalent amount..........and he might not pay the tax if the company increases efficiency and maintains prices.

which is exactly counter to your original statement, that the customer will always pay the tax...the business decides to eat it or pass it off to the customer.

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1983 300D
1978 BMW R80/7
1997 Jeep TJ

right, so the tax has to be enough that it effects profitability in order for it to be an incentive. Make it more profitable for a company to keep their call center here, or make their new widget here rather than china because of the tax break, and you have a healthier economy.

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1983 300D
1978 BMW R80/7
1997 Jeep TJ

I dont think those would make a dent in the current debt..and we kinda of need certain socialist programs. Public education, librarys, police, clean water, fire coverage...all socialist programs that I would rather keep.

Having public education is why we got to be as powerful a country as we are. Don't think we wanna cut that.

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1983 300D
1978 BMW R80/7
1997 Jeep TJ

"In all cases".

If the consumer bought nothing, who would pay?

B

If you have no customers, who pays for your expenses?

B

Pay for the programs you like at the state and local level. I don't want to subsidize your idea of acceptable social welfare just as you don't like my belief that everybody should pay their own way, in all cases.

Take advantage of the federal system, allow for diversity at the state and local levels.

B

If the world were flat, how would you ever get home.............??

If the corporation didn't pay the consumer.........he would buy nothing.