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The Trump Economy


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2 minutes ago, BigRedBuster said:

 


Mostly pandemic. But, it’s also an illustration of his f#&%ing stupid Trump’s tariffs are.  Oh.....I thought Canada would be paying these. 
 

it’s unbelievable when you think back to how stupid Trump was and how much he lied and how much his followers believed everything.  

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3 hours ago, BigRedBuster said:


Mostly pandemic. But, it’s also an illustration of his f#&%ing stupid Trump’s tariffs are.  Oh.....I thought Canada would be paying these. 
 

it’s unbelievable when you think back to how stupid Trump was and how much he lied and how much his followers believed everything.  

Do you think companies will pass along the cost of a tariff to the consumer but not pass along the cost of increased taxes to the consumer?

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50 minutes ago, BigRedBuster said:

Why would they if Canada is paying it?

I was trying to ask a serious questions since your company doesn’t pass along tax increase cost to your customers to a point, so I was trying to find out why a company wouldn’t pass along a tax increase but would pass along a tariff cost?  I’m not a business owner so I was trying to ask one without getting a snide response.  Sorry for trying to understand the situation more and have a correspondence with you.  

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19 hours ago, Archy1221 said:

I was trying to ask a serious questions since your company doesn’t pass along tax increase cost to your customers to a point, so I was trying to find out why a company wouldn’t pass along a tax increase but would pass along a tariff cost?  I’m not a business owner so I was trying to ask one without getting a snide response.  Sorry for trying to understand the situation more and have a correspondence with you.  

My response was somewhat serious pointing out how Trump lied about tariffs.  But, I understand your question more now.  I was just on my phone yesterday and I hate writing long posts on my phone.  So, I waited till now to be on a computer.

 

Even though both raising the corporate tax from 21 -28%  and the tariff is a tax on Americans, there are some significant differences.

 

First, let's look at how much each tax really is and how it affects the cost of a product.

 

Income tax.  Let's say I have a 10% taxable income.  Raising it from 21-28% is 7 percentage points on 10%.  So, for 1,000 of taxable income, my taxes will be raised from $210, to $280.  That's $70  just on 10% of revenue.  So, this would mean my revenue was actually $10,000.  So, the tax increase is really .7% of revenue.

 

Now, let's look at the tariffs.  At first, the tariff was 20% on incoming lumber from Canada.  That's 20% of the invoice.  So, if I spent $10,000 on lumber from Canada, the tariff would be $2,000.  In December, that was decreased to 9%.  So, still, my costs increased $900 on that lumber compared to $70 for the increase in income tax.  That's a huge difference and it's big enough that I would need to then adjust my pricing to my customer.

 

Also, if corporate income tax is increased 7%, that's the same for all of my competitors (all of mine are domestic companies).  Compare that to if I'm buying Canadian lumber and others are buying domestic, the 20% increase makes it impossible for me to compete, so I have to buy American also.  That sounds great, but the problem is, American lumber companies can't supply all the lumber needed in the US.  So, it created a HUGE shortage of lumber.  Thus, driving up the price and creating a huge problem in construction and other industries that use it.  

 

Another mind blowing stupid part of Trump's tariffs.  This is an example of taxing raw materials.  US manufacturing NEEDS raw materials to create more jobs.  Like I said, domestic lumber mills can not supply everyone.  We need imports.  Even if the tariffs were remotely smart to do, he should have put tariffs on finished goods made out of the lumber.  That would allow American companies to buy raw lumber from Canada and create jobs in the US making things out of that lumber.  What good is it for a company to move their manufacturing to the US only to have to pay a huge tariff just to get raw materials to produce their products?

 

And, let's not forget the totally embarrassing moment for all Americans when Trump was sitting with the Canadian Prime Minister claiming we had a trade deficit with Canada when in actuality, they buy more from us than we do from them.  So, in essence he just insulted one of our better trading partners and embarrassed his own citizens for no reason.

 

As you can see, Trump's tariffs were one hell of a lot bigger tax on Americans than Biden's proposed increase in income tax.

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2 hours ago, BigRedBuster said:

My response was somewhat serious pointing out how Trump lied about tariffs.  But, I understand your question more now.  I was just on my phone yesterday and I hate writing long posts on my phone.  So, I waited till now to be on a computer.

 

Even though both raising the corporate tax from 21 -28%  and the tariff is a tax on Americans, there are some significant differences.

 

First, let's look at how much each tax really is and how it affects the cost of a product.

 

Income tax.  Let's say I have a 10% taxable income.  Raising it from 21-28% is 7 percentage points on 10%.  So, for 1,000 of taxable income, my taxes will be raised from $210, to $280.  That's $70  just on 10% of revenue.  So, this would mean my revenue was actually $10,000.  So, the tax increase is really .7% of revenue.

 

Now, let's look at the tariffs.  At first, the tariff was 20% on incoming lumber from Canada.  That's 20% of the invoice.  So, if I spent $10,000 on lumber from Canada, the tariff would be $2,000.  In December, that was decreased to 9%.  So, still, my costs increased $900 on that lumber compared to $70 for the increase in income tax.  That's a huge difference and it's big enough that I would need to then adjust my pricing to my customer.

 

Also, if corporate income tax is increased 7%, that's the same for all of my competitors (all of mine are domestic companies).  Compare that to if I'm buying Canadian lumber and others are buying domestic, the 20% increase makes it impossible for me to compete, so I have to buy American also.  That sounds great, but the problem is, American lumber companies can't supply all the lumber needed in the US.  So, it created a HUGE shortage of lumber.  Thus, driving up the price and creating a huge problem in construction and other industries that use it.  

 

Another mind blowing stupid part of Trump's tariffs.  This is an example of taxing raw materials.  US manufacturing NEEDS raw materials to create more jobs.  Like I said, domestic lumber mills can not supply everyone.  We need imports.  Even if the tariffs were remotely smart to do, he should have put tariffs on finished goods made out of the lumber.  That would allow American companies to buy raw lumber from Canada and create jobs in the US making things out of that lumber.  What good is it for a company to move their manufacturing to the US only to have to pay a huge tariff just to get raw materials to produce their products?

 

And, let's not forget the totally embarrassing moment for all Americans when Trump was sitting with the Canadian Prime Minister claiming we had a trade deficit with Canada when in actuality, they buy more from us than we do from them.  So, in essence he just insulted one of our better trading partners and embarrassed his own citizens for no reason.

 

As you can see, Trump's tariffs were one hell of a lot bigger tax on Americans than Biden's proposed increase in income tax.

Thank you for your perspective on the matter.  

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