And Now A Word From Economic Genius Expert Matt Yglesias

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Matt Yglesias has had a distinguished and award winning career in blogging and writing.  His latest gig is as a business and economics correspondent at Slate‘s Moneybox.

Apparently, there was a lost soul out there, and Matt was witnessing his conversation.

Mikexxxx @Mikexxxx1

@mattyglesias @Brendan_Buck if your competitor pays lower taxes he can undercut your prices…No?

Well, Matt needed to correct this thought.  He is, after all, the business and economics correspondent at Slate’s Moneybox.  So, he sets Mike straight…….

Matt Yglesias ✔ @mattyglesias

@Mikexxxx1 No. Taxes are paid on profits not sales. It’s irrelevant to pricing.

Oddly, some disagreed, and so he had to add this bit of brilliance…..

Matt Yglesias ✔ @mattyglesias

@Brendan_Buck How so? Taxes are levied on net income not gross. Seems irrelevant to cost basis or pricing strategy. Got literature on this?

Right, taxes are not part of costs………

h/t Twitchy

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37 Responses to And Now A Word From Economic Genius Expert Matt Yglesias

  1. Latitude says:

    where do these people come from?

    …someone ask David Appell, he would know!

  2. Bruce says:

    This is very strange. Even the most cursory analysis would suggest if A gets taxed more than B then B can sell stuff at a lower price and get the same after tax income as A.

    Then A goes out of business and B gets A’s business too…but A then goes on foodstamps paid for by B’s taxes. B then goes out of business and you can’t buy toilet paper in the shops anymore, except on the internet from some company in China.

    Tax is a wonderful thing. If Obama could deliver taxes by drone the whole Middle East would be his for the destroying.

  3. PhilJourdan says:

    Money to run a business does not come from the magic fairy. It comes from investors. And they want a return. If A is taxed more than B, then to get the return, A has to increase prices to get the same return as B. Ergo, yes it is a cost.

  4. kim2ooo says:

    OT

    Sooooo we all know how horrendous “Small Pox” is / was. But what was it measured against?

    “Large Pox” musta been a biotche

  5. Scott says:

    Hmm, so say I need about $50k/yr net income to support my family. I own a business that grosses $200k/yr. So my profit margin has to be 25% or higher, right? Cool, I could do that. But oh wait, say I pay 10% in taxes (on profits). Now, I’m suddenly only netting $45k/yr at 25% profit margin. So I would need to increase my net income by 11.1%, either by increasing my profit margin or improving my gross sales. Now how should I go about doing that without changing my business model, which naturally includes pricing?

    If it didn’t matter, then why doesn’t the city of Chicago levy a 90% tax on business income…it should work since no businesses would move out of the city, right? And prices wouldn’t change?

    -Scott

  6. DirkH says:

    Insane people don’t notice they’re insane.

  7. Tom in Indy says:

    Cigarette tax doesn’t cause the price of a pack of smokes to go up?

    The only question is – Who actaully pays the tax? If the good is something the buyer doesn’t really need, like a newspaper or Yglesias tweets, then the seller eats most of the tax because raising the price just drives away customers. If the buyer really needs the good, like an alcoholic needs booze, then the buyer is less sensitive to price hikes and the seller can pass most of the tax onto the buyer.

    Too bad you can’t tax stupid.

  8. cdquarles says:

    Businesses don’t pay taxes. If you charge a business a tax, they have to get the money from their owners, operators, and customers. Period. So, by levying a tax on business, you are simply turning the business into a tax collector for a hidden levy on the people. ‘Nuff said.

    • David Appell says:

      Not true — they can also take less profit, decrease their dividend, work more efficiently, lay off people, etc.

      • Jim Masterson says:

        Go out of business . . .

        Jim

        • David Appell says:

          So you think businessed don’t lay off people if they need to reduce their expenses in order to maintain a steady profit?

        • PhilJourdan says:

          If the only reason they lay off people is to earn a steady profit, they are no longer around. Only an imbecile sees costs that do not produce as a good.

          layoffs occur when the people can no longer produce enough wealth to support their pay. Imbecile.

        • Jim Masterson says:

          I think higher taxes reduce a business’s ability to provide their product or products. They may even go out of business, but I’m sure you have a formula to calculate that.

          Jim

        • DirkH says:

          David Appell says:
          July 31, 2013 at 3:44 pm
          “So you think businessed don’t lay off people if they need to reduce their expenses in order to maintain a steady profit?”

          When you lay off a person that person will no longer work for you.

        • David Appell says:

          I think higher taxes reduce a business’s ability to provide their product or products. They may even go out of business.

          They will ikely lay off people before they just go out of business. Corporations might pull money out of savings, pay a lesser dividend, or any number of other options.

        • PhilJourdan says:

          And they will lay off non producing people – unless they are going out of business! What an imbecile.

        • PhilJourdan says:

          Get an $80b bailout from Obama.

      • cdquarles says:

        That, DAA, means that the business still didn’t pay the taxes. That meant that the owners, operators, and customers still paid it.

      • PhilJourdan says:

        Well, we can see you know NOTHING about business. Are you going to invest in a business that constantly under performs? Are you going to hire people that contribute nothing to the bottom line? Apparently so. But successful businesses do not, imbecile.

  9. Pingback: LOL, Slate Does Some Good Click-Bait!!!! Asks If You’re Smarter Than Matt Yglesias!!! | suyts space

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