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

[Ray From Cleveland]

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.

I remember back during the Bush years when they forced lower sulfur content in diesel fuel. Before that diesel was about a buck a gallon less than gasoline. After the mandate started, diesel fuel was a buck a gallon over gasoline and has stayed above the price of gasoline since. Plus with all the new CAFE standards they placed on new trucks, we had to dramatically increase our delivery costs.

One of our customers was a lib that owned a business. I came in and told him I had a delivery for him. He made some snide remark about the cost of the delivery. I explained to him why we had to increase our prices. I told him some people think green is free when in reality, we all have to indirectly pay for it. He just gave me a dirty look and had his worker unload my trailer.

 

[Ray From Cleveland]

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

It depends on what they do with their reduced taxes. Many reinvest in their business buying new equipment, giving out raises, share with their stockholders. When my employer got a tax cut under GW, he purchased a new fleet of trucks, so it cost him more money than he got by the tax cut, but he had to use that break as an opportunity he would likely not get in the near future.

 

[Ray From Cleveland]

That's a whole nuther topic than what I was responding to....

Yes, raises on merit from increased productivity or responsibility.... But there are also cost of living raises, which all govt employees get, plus merit raises when earned and deserved.

That's because government is not producing a product or service in which they have competition like the private market. We all know who pays for early retirement, benefits and yes, cost of living raises when it comes to government.

 

[rightwinger]

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.

It all comes down to how critical your product is to consumers and how much competition you have

Consumers will ask….is it worth it at that price?
Can I live without it?

Thinking you can just automatically pass on less profit to the consumer does not necessarily work

 

[hadit]

It all comes down to how critical your product is to consumers and how much competition you have

Consumers will ask….is it worth it at that price?
Can I live without it?

Thinking you can just automatically pass on less profit to the consumer does not necessarily work

Oh, definitely. As we found out with the yacht tax. it is very possible for the government to tax an industry out of existence. If a government mandated cost increase cannot be passed on to the consumer, there is no choice but to tell your workers that government has destroyed their jobs and shut down the company. Or, get this. You can also bring your costs back in line by outsourcing the labor to a place where it's cheaper. Imagine that, government forcing jobs overseas.

 

[Ray From Cleveland]

It all comes down to how critical your product is to consumers and how much competition you have

Consumers will ask….is it worth it at that price?
Can I live without it?

Thinking you can just automatically pass on less profit to the consumer does not necessarily work

Oh please. Now a days people think their smart phone is a necessity.

 

[AntonToo]

Gee…..did they drop prices when Trump cut their taxes by 40 percent?

Bingo.

If tax rates are directly tied to taxation then there would be huge reduction in prices after huge corporate tax-cuts that were passed.

 

[Nostra]

Bingo.

If tax rates are directly tied to taxation then there would be huge reduction in prices after huge corporate tax-cuts that were passed.

If tax rates are directly tied to taxation....

Um, I think they are.

 

[busybee01]

And all 43 Biden supporters nod in agreement.

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

White House press secretary Jen Psaki on Monday defended House Democrats' tax plan in the face of criticism that the legislation would see taxes and consumer prices rise for many Americans. Psaki insisted President Joe Biden is committed to keeping taxes the same for anyone making less than...

freebeacon.com

Companies are not going to raise prices because of a slight tax increase. The highest rate we are talking about is 28% in Biden's plan which is still 20% lower than the 35% it originally was. The House bill sets it at 26%. Companies are flush with cash. The question is whether they would use that as a excuse to raise prices. Some of these price increases are about impressing investors not higher costs. The rich are getting richer at the expense of ordinary people and Republicans are active participants.

 

[Ray From Cleveland]

Companies are not going to raise prices because of a slight tax increase. The highest rate we are talking about is 28% in Biden's plan which is still 20% lower than the 35% it originally was. The House bill sets it at 26%. Companies are flush with cash. The question is whether they would use that as a excuse to raise prices. Some of these price increases are about impressing investors not higher costs. The rich are getting richer at the expense of ordinary people and Republicans are active participants.

This is what companies have always done. Why would this time be any different? No, not all companies are "flush" with cash, especially those affected by this massive labor shortage. When labor is hard to get, the only thing a business can do is make the wage offer higher. Now add these new taxes, out of control inflation, and our ever increasing fuel prices, you have all the makings for price increases.

 

[Care4all]

Companies are not going to raise prices because of a slight tax increase. The highest rate we are talking about is 28% in Biden's plan which is still 20% lower than the 35% it originally was. The House bill sets it at 26%. Companies are flush with cash. The question is whether they would use that as a excuse to raise prices. Some of these price increases are about impressing investors not higher costs. The rich are getting richer at the expense of ordinary people and Republicans are active participants.

And, that is the marginal tax rate, not the effective tax rate. Many corporations pay zero once they take write offs, get gvt subsidies, and other loopholes.

This is NOT a tax hike on mom and pop owned business that may be an SCorp, or Ltd corp, or sole proprietor businesses....it's for C Corporations....who are flushed with money or have borrowing interest rates of nearly zero, thanks to the Fed's gift to them.

 

[jbrownson0831]

Companies are not going to raise prices because of a slight tax increase. The highest rate we are talking about is 28% in Biden's plan which is still 20% lower than the 35% it originally was. The House bill sets it at 26%. Companies are flush with cash. The question is whether they would use that as a excuse to raise prices. Some of these price increases are about impressing investors not higher costs. The rich are getting richer at the expense of ordinary people and Republicans are active participants.

Duuuuh why do you Dim doofuses pretend to know anything about business?

 

[hadit]

And, that is the marginal tax rate, not the effective tax rate. Many corporations pay zero once they take write offs, get gvt subsidies, and other loopholes.

This is NOT a tax hike on mom and pop owned business that may be an SCorp, or Ltd corp, or sole proprietor businesses....it's for C Corporations....who are flushed with money or have borrowing interest rates of nearly zero, thanks to the Fed's gift to them.

And from whom do the Mom and Pop businesses get their supplies? Who transports those supplies to the Mom and Pop businesses and ships out the finished goods? Pretending companies exist in a vacuum is foolish because cost increases in the supply chain effect everyone downstream. In this case, there would be multiple companies whose costs went up who are instrumental in getting those supplies to Mom and Pop and finished goods to the customers.

 

[Weatherman2020]

Companies are not going to raise prices because of a slight tax increase. The highest rate we are talking about is 28% in Biden's plan which is still 20% lower than the 35% it originally was. The House bill sets it at 26%. Companies are flush with cash. The question is whether they would use that as a excuse to raise prices. Some of these price increases are about impressing investors not higher costs. The rich are getting richer at the expense of ordinary people and Republicans are active participants.

Companies are not going to raise prices because of a slight tax increase.

Hilarious. Tell us why prices keep going up.
Oh yeah. Increased costs.
And taxes are a cost, shitforbrains.

 

[rightwinger]

Hilarious. Tell us why prices keep going up.

As everyone knows….
Disrupted supply chains and increasing demand

Ever see the hundreds of container ships waiting offshore looking to unload?

 

[Rogue AI]

You are SO FOS.
"the American people would not stand for it." is right.
Raise your prices too much and companies will lose business, no customers, no business.
This is macro economics 101.

Do companies raise prices when they expand?
Do companies raise prices when they buy new vehicles?
What about when they open up a a new location?
Do companies raise prices when they hire new employees?
Do companies raise prices when they give out bonuses?
What about thanksgiving or christmas turkey's/ham?

In all those instances you list, company spending is individual. Not all companies are spending at the same time. If one raised their prices to cover expansion, their competition does not. Competition keeps prices low. Taxation isn't competitive, it's the one time all companies can raise their prices with impunity at a set rate.

 

[Blues Man]

It all comes down to how critical your product is to consumers and how much competition you have

Consumers will ask….is it worth it at that price?
Can I live without it?

Thinking you can just automatically pass on less profit to the consumer does not necessarily work

That's funny because people will spend more than they make to buy shit they don't really need.

As long as consumers are this stupid there will never be enough market pressure that manufacturers will be forced to lower prices

 

[rightwinger]

That's funny because people will spend more than they make to buy shit they don't really need.

As long as consumers are this stupid there will never be enough market pressure that manufacturers will be forced to lower prices

If consumers are stupid then manufacturers have to be smart enough to get them to buy their stupid products.
Raise your prices too much and consumers will start to realize they don’t need your stupid product.

 

[hadit]

If consumers are stupid then manufacturers have to be smart enough to get them to buy their stupid products.
Raise your prices too much and consumers will start to realize they don’t need your stupid product.

Jack taxes too high and you'll put the companies in that situation. Good-bye American built yachts.

 

[rightwinger]

Good-bye American built yachts.