>>As a business owner I charge $300 for a product. I know how much of a
>>margin I need to be profitable and that price reflects that reality. The
>>sales tax in 5.65%. I charge that on top of the $300 making the total
>>$316.95 the customer pays. That $16.95 goes to the government. Any retail
>>seller passes all the sales tax on to the consumer. At the end of every
>>period whatever the total I collect in the way of sales tax is separated
>>from general revenue. I makes no difference to me if the sales tax is 1%
>>or 8% I am not benefiting from it I am merely collecting it for the
>>state. I am, in essence, the temporary tax collector for these funds.(JT)
>
>As a business owner you are exceptionally fortunate. It appears you can
>charge whatever you like, without any fear of repercussions. You are also
>an exceptionally noble business proprietor, given that you don't take
>advantage of this position and charge even more. I assume you have a
>monopoly on an essential service?(BB)
Huh? I charge the amount necessary to make enough profit to stay in business. I can assure you I do not have monopoly powers. My competitors do the same thing. If we sell items that are similar in quality and our costs are fairly equal the prices we charge must also be fairly equal unless I am capable of giving the impression of certain intangibles involved in shopping at my location. People will pay more for a perceived higher quality shopping experience and if they feel the staff is more attentive to their needs.(JT)
>>I am ambivalent concerning the sales tax rate until it gets high enough
>>to deter a sale. Maybe I am atypical in this regard but when meeting with
>>other business owners they have pretty much say similar things. I run a
>>small business, just under 3 million in sales so maybe for larger stores
>>like Best Buy or Sears a different mind-set prevails. If I could
>>eliminate sales tax I would as it is horribly unfair. A customer who buys
>>a $200 item may be spending a weeks take home pay or just an hours pay
>>depending on their income. They both pay $11.30 in sales tax which is
>>almost 6% of of the first persons income vs. less than .01% of the
>>others. Nothing even close to fair about that. Some retail items may be
>>necessities. A new alternator for a car would probably be perceived as a
>>necessity in some areas of the country where public transportation is
>>non-existent. Groceries are the same way but some areas of the country do
>>not charge sales tax on groceries or else charge a lower rate.
>>Since the business pays taxes on its operation and income already why
>>would they not pass on the sales tax to the consumer as is the intention?(JT)
>
>Assuming they can charge whatever they like, why not. It seems a rather
>bold assumption though.(BB)
Why on earth assume they can charge whatever they like? This is far from realistic.(JT)
>>Payroll taxes are pretty well split with the business paying half and the
>>employee paying half.(JT)
>
>Except the business also pays the employee's half, on behalf of the
>employee. The employee never actually gets to touch the money and most
>employees are practical enough not to ever consider it theirs. If they did
>get hold of it, they would be unlikely to give it up so easily.(BB)
They do consider it their money. I get to hear them speak concerning their share of withholdings so I know they aware. I am not certain how they would "get hold of it" in a manner that would make them unlikely to give it up. They see the amount of withholdings on every check. Paying employees their gross earnings and then asking for part back to pay their portion of payroll taxes, their portion of health care, etc would be counterproductive for everyone involved. Doing that would be unnecessarily complicated.(JT)
>> This of course has nothing to do with sales tax. The sales tax has gone
>> up and done over the last few years which is a minor pain but it really
>> has no effect on my bottom line. I have no problem paying taxes like
>> other business owners I know. Most of them bitch about payroll taxes,
>> income taxes and especially property taxes. Property tax can effect
>> sales if you are selling trucks and other heavy equipment. Other family
>> members in reselling operations complain about paying too much in taxes
>> too but sales tax is almost never mentioned unless it is going up and
>> there is a fear it will adversely effect sales.(JT)
>
>How do you reconcile this fear of potential effects on sales with the
>earlier claim that sales taxes "... really has no effect on my bottom
>line"? Would not lower prices have a positive effect on sales? If so, it
>follows that a 5.65% increase in price must at the very least have an
>effect on sales and thus an effect on the bottom line? Unless you have a
>monopoly over a product that the customer is forced to buy at any price.(BB)
The statement that I made saying that I am ambivalent concerning sales tax unless it reaches a point where it deters a sale pretty well covers that. Fear is also a pretty strong word, lets call it mildly apprehensive. Lowering prices 5% would have zero impact on my sales, trust me on this, I might know a little something about my own business. Perhaps you could write a business proposal telling me what I am doing wrong. Since I have no monopoly powers and I believe, based on years of experience, that sales tax has no effect on sales (unless as stated it went to an amount high enough to deter sales which is extremely unlikely) I must be doing something wrong. (JT)
>> I have no "shell corporations" with which to hide money and I don't
>> move profits and losses around to reduce my taxes. I don't pay family
>> members to hold fictitious titles in fictitious companies either. I
>> really do not know how they do it but then again I don't care to.(JT)
>
>Paying people for fictional work would be very bad for the bottom line.
>Moving profits around to legally avoid tax is theoretically sound though,
>taxes come off the bottom line and if you have any competitors who avoid
>tax, you must follow suit. Its the lowest common denominator principle of
>capitalism.(BB)
You're not being very creative Bill. Paying people for fictional work can be profitable. This is certainly not the place to discuss such a proposition. Ask an accountant friend if you know one. It really isn't very complicated. Very unethical yes, but complicated, no. The shell corporate thing does have me stumped but I have spent no time trying to understand it and with the size of my operation it would seem unlikely to be worth the hassle. At the lower level of business where I operate I would hardly be forced to engage in such business practices were my competitors to. Sorry if this does not fit into your ideas of how the principles of capitalism work in the US. Why is it so difficult to imagine the retail seller as someone who simply collects the sales tax and passes it on intact to the collector as part of the daily operation of their business? You seem to be deliberately argumentative on this point without having facts to back it up. Every small business owner is not trying to wring every last penny out of every aspect of their operation. That would simply be too time consuming to be worthwhile. Most are simply people trying to get by. Many are selfish and have a sense of entitlement but so do many non-business owners. I do not want to put words into your mouth but it seems to me you think every business owner is trying as hard as they can to get something at someone else expense. Some do and some don't. What is funny is that so many business owners level the same complaint against workers, always trying to get something at the owners expense. Both are only true to a limited degree.
John Thornton