Psaki: ‘Unfair and Absurd’ To Say Companies Would Raise Prices in Response to Tax Increases

[LeftofLeft]

It is strictly a case of how much loss of profit they are willing to eat.

I find it hypocritical that when corporate taxes were cut 40 percent they were unwilling to pass the extra profit on to the consumer
Yet, when you take those cuts back and return to previous rates, they demand the consumers make up for lost profits

Again, I would agree with you. When have we seen that? I have seen the tax cuts but I have not seen the metrics or analysis as to how and why the prices aren’t passed on to the consumer. As an advocate for keeping corporate taxes reasonable, it is usually to be competitive globally.

 

[rightwinger]

No business is going to lower prices if the market will bear the higher ones

Exactly
And if he tries to raise prices above what the market will bear he will lose sales

Why business cannot just “pass along” reduced profits

 

[hadit]

It is strictly a case of how much loss of profit they are willing to eat.

I find it hypocritical that when corporate taxes were cut 40 percent they were unwilling to pass the extra profit on to the consumer
Yet, when you take those cuts back and return to previous rates, they demand the consumers make up for lost profits

Hypocritical? Possibly, but also completely human behavior. Is it not just as hypocritical for Washington legislators to lock in massive new spending when tax revenue goes up, then wail about shortfalls when it goes down to previous levels?

 

[Blues Man]

Exactly
And if he tries to raise prices above what the market will bear he will lose sales

Why business cannot just “pass along” reduced profits

Which is also why a business own't lower prices when expenses decrease.

 

[hadit]

Exactly
And if he tries to raise prices above what the market will bear he will lose sales

Why business cannot just “pass along” reduced profits

When EVERY business faces the same cost increase (as raising corporate taxes is wont to do), they can be assured that all are in the same boat and it is safer to raise prices. In addition, let us not forget that it's not just the company that sells the product to the consumer who faces higher costs in the form of taxes. Every company along the way also faces higher costs. Take a candy company. Not only does it see it's direct costs go up because of taxes, but the farmers who produce the milk, sugar and chocolate, the truckers who transport the raw materials to the warehouses, the construction companies that do maintenance on the buildings, the custodial companies that keep the buildings clean, the IT companies that provide data services, the companies that supply office furniture, etc. etc. also see their costs go up, so by the time the product hits the grocery stores, Washington has built in tremendous pressure to increase the prices of the finished goods.

A corporate tax increase is not like a temporary spike in milk prices because of a disease that kills a bunch of cows. It effects ALL the companies involved in getting products to shelves.

 

[Claudette]

Mac1958
Idiotic. Your way. Guess common sense is something you know nothing about.

 

[Claudette]

Blues Man
No but inflation and high gas prices will hit them hard.

 

[Mac1958]

Mac1958
Idiotic. Your way. Guess common sense is something you know nothing about.

You're welcome to point out the flaws in that post.

Since we both know that you can't, you'll just make shallow attacks like that.

This is my profession. You are ignorant, but you keep going. Don't you have any self respect?

 

[hadit]

The point is that most small business will not be affected by the new corporate tax rates

That is fallacious. A small business may not see it's direct tax rates go up, but it WILL see increased costs from its suppliers, whose taxes HAVE gone up, so to say they will not be affected by the new corporate tax rates is false.

Trucking companies that transport the product to the stores will charge higher prices. Stores will charge higher prices. Corporate tax increases effect everyone.

 

[Claudette]

Mac1958
Guess you missed the price of gas and inflation. All that affects the price of everything. Its not just taxes.

Companies won't pay that cost. Consumers will.

 

[Mac1958]

Mac1958
Guess you missed the price of gas and inflation. All that affects the price of everything. Its not just taxes.

Companies won't pay that cost. Consumers will.

So you move the goalposts from taxes to gas and inflation, which are both transitory.

You lose. I don't know why you people are so eager to display your ignorance.

 

[Blues Man]

That is fallacious. A small business may not see it's direct tax rates go up, but it WILL see increased costs from its suppliers, whose taxes HAVE gone up, so to say they will not be affected by the new corporate tax rates is false.

Trucking companies that transport the product to the stores will charge higher prices. Stores will charge higher prices. Corporate tax increases effect everyone.

Only if you assume all of the suppliers are C corps.

And even then the increase in costs will not be anywhere near as much for all those small companies because the increase will be spread over the entire customer base.

And it is not fallacious that corporate tax rates only apply to C corps.

 

[Claudette]

Mac1958
No I win. There are no goal posts when it comes to cost. Companies will pass costs onto the consumer. Its been that way ever since the first business appeared in America.

 

[hadit]

Only if you assume all of the suppliers are C corps.

And even then the increase in costs will not be anywhere near as much for all those small companies because the increase will be spread over the entire customer base.

And it is not fallacious that corporate tax rates only apply to C corps.

The point is, there are many companies involved in the production and distribution of goods, and we cannot pretend that a small company exists in isolation. It would be nearly impossible for NO company in the supply chain to experience higher taxes. This includes petroleum companies that provide the fuel trucking companies use for their trucks, companies that provide the steel used to make the tools and office furniture other companies use, and on and on. No, I claim it is virtually impossible for companies to be completely unaffected by higher corporate taxes.

As I've shown, it doesn't matter that corporate tax increases only apply to certain corporations, their impact will be felt across the entire economy.

 

[Blues Man]

The point is, there are many companies involved in the production and distribution of goods, and we cannot pretend that a small company exists in isolation. It would be nearly impossible for NO company in the supply chain to experience higher taxes. This includes petroleum companies that provide the fuel trucking companies use for their trucks, companies that provide the steel used to make the tools and office furniture other companies use, and on and on. No, I claim it is virtually impossible for companies to be completely unaffected by higher corporate taxes.

As I've shown, it doesn't matter that corporate tax increases only apply to certain corporations, their impact will be felt across the entire economy.

In all reality it will be pretty minuscule.

 

[Nostra]

If Dimwinger economics worked and companies handled increases in their cost of doing business by simply taking it out of profit, or magically increasing productivity, we would never see any price increases.

The rampant inflation in the Biden economy proves that to be complete bullshit.

 

[Blues Man]

If Dimwinger economics worked and companies handled increases in their cost of doing business by simply taking it out of profit, or magically increasing productivity, we would never see any price increases.

The rampant inflation in the Biden economy proves that to be complete bullshit.

It's just as wrong to assume that a reduction in costs will lead to a reduction in prices.

 

[Nostra]

It's just as wrong to assume that a reduction in costs will lead to a reduction in prices.

I never made that claim.

 

[Blues Man]

I never made that claim.

I never said you did

 

[Oldestyle]

She said it's "absurd" to suggest that businesses would raise prices in response to increased tax liability because "the American people would not stand for it."

Was she living under a rock before she had this job? Businesses have ALWAYS adjusted pricing to account for increased expenses. These lifetime government employees who have never owned or managed a business in the private sector are convinced that all private companies are raking in profits of 50% or more. In reality the vast majority of businesses operate on razor thin margins. For example, big bad mega-corporation Walmart's profit margin is less than 2%. Since most successful American businesses have profit margins similar that, any material upward change to the liabilities side of the balance sheet is going to require an equal adjustment to the other side in order to avoid operating in the red, which is accomplished by increasing their prices of goods/services. It doesn't matter whether increased business expenses are the result of a tax increase, or increased costs from suppliers/shippers/fuel. If it affects operating margins, it will be accounted for by price adjustments. Same goes for material decreases in business expenses, which are often passed down to consumers by lowering prices.

This is macro economics 101. Yet our entire economy is now at the complete mercy of morons who don't have the first clue how the economy actually functions in this country from a macroeconomic or a microeconomic perspective.

She, like most of the far left progressives in the Biden Administration have one thing in common...they have NEVER run a business...they have never had to make payroll...they have never had to figure out how to keep the doors open! Psaki doesn't have a clue about how the Private Sector works because her whole life has been spent in the Public Sector. She's really no different than Joe Biden or Nancy Pelosi. They're all totally out of touch with the reality of being a business owner in America.