Economy

@BigRedBuster and/or @JJ Husker couple questions I’m curious about:  

will your business end up raising prices of your products if taxes rise on your business income?  

Or will you eat the cost of the tax increase?

Will your COGS go up because your suppliers raise their prices?  

 
Archy1221 said:
@BigRedBuster and/or @JJ Husker couple questions I’m curious about:  

will your business end up raising prices of your products if taxes rise on your business income?  

Or will you eat the cost of the tax increase?

Will your COGS go up because your suppliers raise their prices?  
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Our prices didn't change because of the last tax cut so, I don't see why they would change with a tax increase (at the suggested amount).  It's extremely hard to answer what exactly changed because of it.  Obviously, at the end of the year, the bottom line is better.  Now, you make financial decisions after that based on your bottom line.  Do we need to raise wages to attract or keep employees?  This obviously helps doing that.  Do I need to give a special deal to a customer to get an order, this obviously helps with that.  I've never had a supplier say, "Well, I got a tax cut so I'm lowering your price" or "They raised my taxes so I have to raise your price".  

Honestly, with the changes in percentages they are talking about, in the grand scheme of things I don't see it being a big deal.  It's not like they are going from 21% to 60%.  If I remember right, they are talking about going from 21% to 28%.  So, that's not 7% on our revenue, that's 7% on our taxable income.  So, let's say our taxable income is 10% of revenue.  This tax increase would be 7% of that 10%.  Pretty small in the grand scheme of things.  So, in reality, it's a pretty small percentage of our overall expenses that would go into deciding pricing.

That's another reason why I roll my eyes and bang my head against the wall about the whole debate.  We have a huge deficit problem in this country and those bills need to be paid.  I would think doing what is needed to do THAT (especially when the change in percentages are so small) would be the conservative thing to do.

I wish people would understand that there are times to raise taxes and times to cut taxes.  One is not liberal and one isn't conservative.  It's an economics issue as long as people try their best to keep taxes as low as possible.  The government HAS to collect taxes to do what they need to do.  And, contrary to many on the Republican side, all government is not evil.  It needs to be ran efficiently (and, many times it is done pretty efficiently) and be good stewards of our money.  But, it is necessary.

 
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Archy1221 said:
@BigRedBuster and/or @JJ Husker couple questions I’m curious about:  

will your business end up raising prices of your products if taxes rise on your business income?  

Or will you eat the cost of the tax increase?

Will your COGS go up because your suppliers raise their prices?  
Click to expand...
My tax situation doesn't (hasn't yet) affected my selling prices. I suppose if it got way out of hand I might need to adjust something.

As far as my COGS, that constantly affects my pricing. We may be a little unique in that virtually everything we do is custom. So I am always calculating my cost for the particular job and then marking it up. We deal with a lot of steel, aluminum, stainless steel materials so it is always bouncing up and down. I don't mind cost increases, until they become prohibitive for customers, because the more it costs the more I make on it.

 
He agrees with me that we are going to see a spike in inflation. I don’t necessarily agree with his conclusion though.  
 


 
Archy1221 said:
Sorry, autocorrect. Dismissed the idea of inflation becoming an issue 
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Well, then he agrees with Krugman who I disagree with.Krugman has been writing a lot lately about how inflation should not be anyone's worry right now.  HAAA!!!  I think that's total BS.  It's not just a theory at this point.  It's actually happening.

 
Late last summer I posted an article about how people were rethinking where they live because of the pandemic. Looks like this is a big part of the housing boom. 

interesting read. 
 


 
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