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Kali, I've still had not a single direct answer from you yet.

So let me make my questions as straightforward as possible.

You make the following substantive assertions:

1. All government costs are borne by the employees of private firms or corporations.
2. All taxes on business are part of the cost of production
3. All taxes on business are passed on to the consumer

You make these assertions without reasoning or argument as though they are self-evidently true. They are far from self-evidently true and, in my view, false, for reasons which I have, in fact, sketched out in earlier posts to Kal. When asked to justify these statements you have merely reasserted them or resorted to personal remarks or evasions. So let me ask you very directly:

What makes you think that taxes on business are part of the cost of production?

What makes you think that corporate taxation is, or even can be, passed on to the consumer?

And what makes you think that all government costs are borne by the employees of private firms or corporations?

Now let's be clear about this last one. I am not asking you to explain how these costs are borne by employees of private corporations as opposed to public ones. The question is, what makes you think that government costs are borne by employees at all rather than by the employer.

You seem to be very exercised by this public/private matter so let me get something straight. Of course you are right to state that public organisations are funded out of taxation and therefore their employees' wages are as well. That point is blindingly obvious and was never at issue between us. This public/private question merely muddies the waters (unnecessarily) which is why I did not address it. The point at issue between us is a much more fundamental one. Who bears the burden of taxation - the employer or the employee? (Let's deal with the typical profit-generating unit of the Capitalist System in the West, the private corporation, and leave the public sector aside for a moment.)

You also asked me a question.

Is the capitalist system immoral? Not, clearly, by its own system of judgement which is embedded in the prevailing ideology. But by any system of judgement based on equity, human need, and simple compassion it is a monstrous system of economic organisation based at its very root on the exploitation of the majority of the human race by the minority and causing an truly inconceivable amount of human suffering, through economically driven warfare, famine and waste. So yes, not just immoral but cataclysmic.

Kal wrote:

My observations are that Capitism and Democracy as we know it are incompatible. Capitalism is about the will of the minority, whereas the Democracy is about the will of the majority. The ultimate Capitalistic system would be an Anarchic one, with market forces being the only factors. However those states which are Anarchic seem to self destruct.

I would absolutely agree with you. +1 And it is a concise way of pointing out that we do not live in a Democracy, at least not one defined as representing 'the will of the majority'. How anyone can think that putting an x in this box rather than that box every five years somehow translates into the 'will of the majority' utterly dumbfounds me.

However, 'Anarchy' literally means 'without rule', or 'without a state apparatus'. There are no anarchist states, never have been, nor ever could be. Anarchists of whatever persuasion have no place for the state in their model of society. However, in purely economic terms capitalism is the ultimate anarchic system of production. It is and always has been completely uncontrollable. Joke: if you put all the economists in the world end to end they would still never reach a conculsion.

(Don't know why I'm going on like this, Kal. It all sounds rather boring. I think I'm just on a ego roll! Time to shut up. )

sv-wolf wrote:Kali, I've still had not a single direct answer from you yet.

So let me make my questions as straightforward as possible.

You make the following substantive assertions:

1. All government costs are borne by the employees of private firms or corporations.
2. All taxes on business are part of the cost of production
3. All taxes on business are passed on to the consumer

You make these assertions without reasoning or argument as though they are self-evidently true. They are far from self-evidently true and, in my view, false, for reasons which I have, in fact, sketched out in earlier posts to Kal. When asked to justify these statements you have merely reasserted them or resorted to personal remarks or evasions. So let me ask you very directly:

What makes you think that taxes on business are part of the cost of production?

Income - cost = profit

No profit = no business = no job

What makes you think that corporate taxation is, or even can be, passed on to the consumer?.

See above.

And what makes you think that all government costs are borne by the employees of private firms or corporations?

Now let's be clear about this last one. I am not asking you to explain how these costs are borne by employees of private corporations as opposed to public ones. The question is, what makes you think that government costs are borne by employees at all rather than by the employer.

You may take his profit for a short while, but eventually production will shift to a more favorable tax environment where profit is higher. As is today, your job will be outsourced.

You seem to be very exercised by this public/private matter so let me get something straight.

I'm fed up with being played by self serving politicians.

Of course you are right to state that public organisations are funded out of taxation and therefore their employees' wages are as well. That point is blindingly obvious and was never at issue between us

Then how can you claim to not see taxes as part of businesses cost? I am actually having a hard time believing you are serious. Couple that with the statement you still haven't explained... “The idea that, in the long term, income tax doesn't actually come out of your wage or salary is counterintuitive, but there seems to be a lot of evidence to support it... ”

This public/private question merely muddies the waters (unnecessarily) which is why I did not address it. The point at issue between us is a much more fundamental one. Who bears the burden of taxation - the employer or the employee? (Let's deal with the typical profit-generating unit of the Capitalist System in the West, the private corporation, and leave the public sector aside for a moment.)

You also asked me a question.

Is the capitalist system immoral? Not, clearly, by its own system of judgment which is embedded in the prevailing ideology. But by any system of judgement based on equity, human need, and simple compassion it is a monstrous system of economic organisation based at its very root on the exploitation of the majority of the human race by the minority and causing an truly inconceivable amount of human suffering, through economically driven warfare, famine and waste. So yes, not just immoral but cataclysmic.

Capital is the coin I have earned for an honest days work. As a free and honest man it is not unreasonable for me to do with the physical representation of my time and toil on this planet as I see fit. I may spend my wage today. I may save my wage for another day. If I save it long enough I should be able to buy a days wages worth of goods when I retire. This would be prudent and make me not a burden to society. Lastly, I may choose to risk it and lend it to another and be paid interest for both the risk and the time deferment of my being able to spend the fruit or store of my toil. In a free society the above occur in the naturally occurring marketplace. Basic capitalism. Immoral?

Now if you want to single out crooked bankers, corporations, and politicians, fine - I'm all with you. But I suggest the problem isn't capitalism, which is hardly practiced at all in the west. But more the near communism Europe is evolving toward and fascism for the US.

sv-wolf wrote:

Kal wrote:

My observations are that Capitism and Democracy as we know it are incompatible. Capitalism is about the will of the minority, whereas the Democracy is about the will of the majority. The ultimate Capitalistic system would be an Anarchic one, with market forces being the only factors. However those states which are Anarchic seem to self destruct.

I would absolutely agree with you. +1 And it is a concise way of pointing out that we do not live in a Democracy, at least not one defined as representing 'the will of the majority'. How anyone can think that putting an x in this box rather than that box every five years somehow translates into the 'will of the majority' utterly dumbfounds me.

However, 'Anarchy' literally means 'without rule', or 'without a state apparatus'. There are no anarchist states, never have been, nor ever could be. Anarchists of whatever persuasion have no place for the state in their model of society. However, in purely economic terms capitalism is the ultimate anarchic system of production. It is and always has been completely uncontrollable. Joke: if you put all the economists in the world end to end they would still never reach a conculsion.

(Don't know why I'm going on like this, Kal. It all sounds rather boring. I think I'm just on a ego roll! Time to shut up. )

Aristotle called democracy rule by mob.

The majority votes to feed its never ending appetite for goods and services from the government. The current central/national fiat banking system is more than happy to lend money that is not someone else's savings, but is something they print or computer generate into existence when you or the government assumes debt. And they charge interest to do it. And our children and grandchildren will pay it.

The US owes 50 trillion dollars of debt.

A stack of one thousand one thousand dollar bills is one million dollars and would sit 4 inches high.
A stack one trillion dollars worth of thousand dollar bills would stand 67 miles high.

Question:
How many years is a trillion seconds?


Not 32
Not 320
Not 3200
32,000 years

Check out how bad it it. http://mwhodges.home.att.net/

Agggggggg! Kali.



This isn’t going anywhere. There is so much lack of understanding here it would take reams of paper to sort it out. This is the last post I’ll make on this issue, but I’ll try to unpack my three questions for you and open up the implications of them. Then over to you.

Suppose a company makes a huge profit one year and decides to throw a big celebratory party for its directors and shareholders where everyone receives expensive presents. How is this paid for? It is paid for out of company profits. Is it a cost of production? No, clearly it is not a cost of production, it is an ancillary cost to the company.

When the UK’s Inland Revenue or equivalent US tax office sends in its bill to the company, what is it taxing? Is it taxing their levels of production for that year? Or is it taxing their profits? If a company produces three times as many goods this year but makes only one-third of their former profit, does their tax bill go up or go down? It goes down, because company tax is a tax on profit not on production. And that tax has to be paid for out of the company’s profit.

Taxation is another sort of ancillary cost. Not a cost of production. A cost of production is a cost incurred in the productive process.

Why do companies kick up dodo when governments try to increase taxation? They kick up dodo clearly because it affects their annual profits. Tax costs cannot be passed on to the consumer in increased prices. The market in general does not allow it. And in a roundabout way, that is because they are not a cost of production.

How do we know this? None of the questions I asked can be answered analytically – just by rephrasing your assertions. Or by coming up with the right kind of formula or statement, no matter how carefully it is phrased in the language of economists. These are substantive questions and can only be answered by checking out what goes on in the real world.

If taxes levied on companies could be passed on to the consumer in the form of increased commodity prices, then every time we see a general tax increase we should see a corresponding general rise in prices in the following period. It is hard to isolate various causal factors in the economic arena (you can’t do controlled experiments) but what we normally see, all other things being equal, is that general tax increases are not followed by a general increase in prices.

But tax is also levied on wages and salaries. So surely it is a fact that some tax falls on wages. We usually suppose it does, but appearances are often deceptive, that is what I meant about the reality being counterintuitive.

Kali, to make things clear and simple, we are just talking about wages earned by people employed by commercial enterprises. Is tax actually levied on wages? I’ve already discussed this and given you reasons why I think it isn’t, but clearly you haven’t understood what I said. I’ll try to explain again in more detail.

In the UK we have a system known as PAYE (Pay As You Earn). Every month I get a PAYE pay slip from my employer which advises me of my Gross Monthly Salary. It also tells me what my tax code is and how much tax is deducted from that gross amount. It tells me too what is left: my ‘nett’ or take home pay.

Wages are the price my employer pays for the labour I and my fellow employees sell to him. Wages like any other kind of price are determined, in part, by the market. There is a conventional element involved in wage determination, but broadly speaking wages are no different from other kind of price. If the market determines wages levels, the question arises, does it determine my take home pay or my gross pay? In other words, does it determine the amount I earn after I have paid tax or before I have paid tax?

The same question can be also be put this way: does my employer pay me my gross wage, out of which I have to pay tax to the government, or does my employer pay me my take home wage plus an additional amount determined by the government which I then pass on to the treasury on his behalf. Do I pay the extra tax or does he. If I pay it then it really is a tax on my wages. If he pays it to me to pass on to the government then it is just another covert tax on profit.

The important point is that there is no way of determining the answer to this in the abstract. No amount of arguing about definitions will settle the question. Both explanations are possible, both are logically equivalent and capable of explaining the process. You have to go and see what happens in the real world to settle the issue.

If this is a tax upon my wages what would you expect to happen when there is a general tax increase? You would expect the level of my take home wages to fall. If it is a tax on profit then you would expect my take home wages to stay the same. So, what happens in the real world? My take home pay falls - initially.

If the government take more in wage tax while my wages stay the same then of course I am going to have less to spend on myself. Simple arithmetic. However, economic forces have to be viewed over time. They do not act instantaneously. What appears to happen is that in the period following a general increase in wage tax, take home wages rise again till they are back where they were before the tax rise. This means that over time my take-home pay is not affected by changes in the general level of income tax.

So over time, who is absorbing the extra cost caused by the tax increase? Well if I’m not paying for it, it must be paid for by the company. Is this a cost of production? No it certainly isn’t a cost of production. Will the market generally allow the company to pass on the cost to the consumer in the form of increased commodity prices. No, it won’t. It appears not to happen that way. A general increase in tax is normally followed by a period where wages rise but other commodity prices stay the same. Who pays for the extra taxation? The company does. What does it pay it out of? Out of profit.

If I am right then in my understanding of price movements, all taxation therefore falls on the employing company, not on the employee. No wonder company execs do not like any kind of tax hike.

Whether or not you accept my word for the evidential aspects of this argument, Kali, there is no doubt that your assertions about costs of production, etc are just not as simply self-evident or as obviously true as you seem to assume. Far from it. They hide a lot of untested assumptions about the way the economic world works.

The boards are really not the place for this kind of discussion so I’m bowing out with this. If you want to pm me, then I’ll talk to you there.

One last thing.

Basic capitalism. Immoral?

Your comments are just a conventional rehash of the normal propaganda justification of capitalism. They are just words and they only seem meaningful because we have heard them so often. They put a pleasant face on a process of ruthless exploitation and murderous greed which destroys everything valuable and human in its search for profit.

Sorry, Kali, to be provocative without explanation, it is not fair to you, but this kind of ideological trash I've heard all my life and it bores the hell out of me. It also staggers me that intelligent people can take it seriously - but that's the power of the media and our 'education' system. Challenge me in a pm if you want to.

Have fun and happy riding, if you don't.

sv-wolf wrote:Agggggggg! Kali.



This isn’t going anywhere. There is so much lack of understanding here it would take reams of paper to sort it out. This is the last post I’ll make on this issue, but I’ll try to unpack my three questions for you and open up the implications of them. Then over to you.

Suppose a company makes a huge profit one year and decides to throw a big celebratory party for its directors and shareholders where everyone receives expensive presents. How is this paid for? It is paid for out of company profits. Is it a cost of production? No, clearly it is not a cost of production, it is an ancillary cost to the company.

cost is still cost no matter how you parse it.

When the UK’s Inland Revenue or equivalent US tax office sends in its bill to the company, what is it taxing? Is it taxing their levels of production for that year? Or is it taxing their profits? If a company produces three times as many goods this year but makes only one-third of their former profit, does their tax bill go up or go down? It goes down, because company tax is a tax on profit not on production. And that tax has to be paid for out of the company’s profit.

Taxation is another sort of ancillary cost. Not a cost of production. A cost of production is a cost incurred in the productive process.

Why do companies kick up dodo when governments try to increase taxation? They kick up dodo clearly because it affects their annual profits. Tax costs cannot be passed on to the consumer in increased prices. The market in general does not allow it. And in a roundabout way, that is because they are not a cost of production.

How do we know this? None of the questions I asked can be answered analytically – just by rephrasing your assertions. Or by coming up with the right kind of formula or statement, no matter how carefully it is phrased in the language of economists. These are substantive questions and can only be answered by checking out what goes on in the real world.

If taxes levied on companies could be passed on to the consumer in the form of increased commodity prices, then every time we see a general tax increase we should see a corresponding general rise in prices in the following period. It is hard to isolate various causal factors in the economic arena (you can’t do controlled experiments) but what we normally see, all other things being equal, is that general tax increases are not followed by a general increase in prices.

Interesting. Something for nothing. Then lets tax some more.

But tax is also levied on wages and salaries. So surely it is a fact that some tax falls on wages. We usually suppose it does, but appearances are often deceptive, that is what I meant about the reality being counterintuitive.

Kali, to make things clear and simple, we are just talking about wages earned by people employed by commercial enterprises. Is tax actually levied on wages? I’ve already discussed this and given you reasons why I think it isn’t, but clearly you haven’t understood what I said. I’ll try to explain again in more detail.

In the UK we have a system known as PAYE (Pay As You Earn). Every month I get a PAYE pay slip from my employer which advises me of my Gross Monthly Salary. It also tells me what my tax code is and how much tax is deducted from that gross amount. It tells me too what is left: my ‘nett’ or take home pay.

Wages are the price my employer pays for the labour I and my fellow employees sell to him. Wages like any other kind of price are determined, in part, by the market. There is a conventional element involved in wage determination, but broadly speaking wages are no different from other kind of price. If the market determines wages levels, the question arises, does it determine my take home pay or my gross pay? In other words, does it determine the amount I earn after I have paid tax or before I have paid tax?

The same question can be also be put this way: does my employer pay me my gross wage, out of which I have to pay tax to the government, or does my employer pay me my take home wage plus an additional amount determined by the government which I then pass on to the treasury on his behalf. Do I pay the extra tax or does he. If I pay it then it really is a tax on my wages. If he pays it to me to pass on to the government then it is just another covert tax on profit.

The important point is that there is no way of determining the answer to this in the abstract. No amount of arguing about definitions will settle the question. Both explanations are possible, both are logically equivalent and capable of explaining the process. You have to go and see what happens in the real world to settle the issue.

If this is a tax upon my wages what would you expect to happen when there is a general tax increase? You would expect the level of my take home wages to fall. If it is a tax on profit then you would expect my take home wages to stay the same. So, what happens in the real world? My take home pay falls - initially.

If the government take more in wage tax while my wages stay the same then of course I am going to have less to spend on myself. Simple arithmetic. However, economic forces have to be viewed over time. They do not act instantaneously. What appears to happen is that in the period following a general increase in wage tax, take home wages rise again till they are back where they were before the tax rise. This means that over time my take-home pay is not affected by changes in the general level of income tax.

Your nominal pay eventually rebounds as a direct result of monetary inflation, but, the real value or purchasing power of your pay increase is actually less than it was before. This is the game that you are missing. This is why each generation is poorer and saddled with enormous unplayable debt.

So over time, who is absorbing the extra cost caused by the tax icrease? Well if I’m not paying for it, it must be paid for by the company.

See above.

It's as if your money was gold coin like in Roman times and the government reached into your pocket and punched a hole in your earnings and replaced it with yellow painted lead without you ever catching on.

Is this a cost of production? No it certainly isn’t a cost of production. Will the market generally allow the company to pass on the cost to the consumer in the form of increased commodity prices. No, it won’t. It appears not to happen that way. A general increase in tax is normally followed by a period where wages rise but other commodity prices stay the same. Who pays for the extra taxation? The company does. What does it pay it out of? Out of profit.

If I am right then in my understanding of price movements, all taxation therefore falls on the employing company, not on the employee. No wonder company execs do not like any kind of tax hike.

Not to be insulting. What is your government job - economist? You have been infected by very convoluted thinking.

Whether or not you accept my word for the evidential aspects of this argument, Kali, there is no doubt that your assertions about costs of production, etc are just not as simply self-evident or as obviously true as you seem to assume. Far from it. They hide a lot of untested assumptions about the way the economic world works.

The boards are really not the place for this kind of discussion so I’m bowing out with this. If you want to pm me, then I’ll talk to you there.

One last thing.

Basic capitalism. Immoral?

Your comments are just a conventional rehash of the normal propaganda justification of capitalism. They are just words and they only seem meaningful because we have heard them so often. They put a pleasant face on a process of ruthless exploitation and murderous greed which destroys everything valuable and human in its search for profit.

Talk about calling the kettle black.

Sorry, Kali, to be provocative without explanation, it is not fair to you, but this kind of ideological trash I've heard all my life and it bores the hell out of me. It also staggers me that intelligent people can take it seriously - but that's the power of the media and our 'education' system. Challenge me in a pm if you want to.

Have fun and happy riding, if you don't.

Smile, I don't take any of this personal. Just thought I'd blow a few bubbles on the soap box. I've never seen anyone change anybody else’s mind in any of these discussions anyway.

How's the SV on your wrist and butt?
I'm looking at the Bandit 1250 in the Spring.
A little heavy but I'm getting more desirous of comfort in my old age.

kali wrote:Your nominal pay eventually rebounds as a direct result of monetary inflation, but, the real value or purchasing power of your pay increase is actually less than it was before. This is the game that you are missing. This is why each generation is poorer and saddled with enormous unplayable debt

Sorry to single this one out, but it made me smile.

The only reason why each generation is getting poorer is due to the advertising industry getting smarter. They've managed to increase the desirability of items, making you feel you need something more than the cost of getting it.
Why get a 2007 bike, when your 2006 works perfectly well?

When people do spend money on capital gains they tend to devalue quickly, instead of investing in areas of land. Look at the amount of people renting vs a real capital investment of property. How long till we start seeing landlords aquiring mini-empires and once again returning to true lordly status owning entire towns & farms and therefore populations of workers as they aquire the buildings they live in, and the foods sources they eat?

This may be a democratic country, but the conditioning of its population is certainly capitalist.

Nibblet99 wrote:

kali wrote:Your nominal pay eventually rebounds as a direct result of monetary inflation, but, the real value or purchasing power of your pay increase is actually less than it was before. This is the game that you are missing. This is why each generation is poorer and saddled with enormous unplayable debt

Sorry to single this one out, but it made me smile.

The only reason why each generation is getting poorer is due to the advertising industry getting smarter. They've managed to increase the desirability of items, making you feel you need something more than the cost of getting it.
Why get a 2007 bike, when your 2006 works perfectly well?

When people do spend money on capital gains they tend to devalue quickly, instead of investing in areas of land. Look at the amount of people renting vs a real capital investment of property. How long till we start seeing landlords aquiring mini-empires and once again returning to true lordly status owning entire towns & farms and therefore populations of workers as they aquire the buildings they live in, and the foods sources they eat?

This may be a democratic country, but the conditioning of its population is certainly capitalist.

I was referring to public (government) debt.

How is people not valuing their time and earnings someone elses fault?

If someone hypnotises you to moo everytime you see a glass of milk, whose fault is the mooing? The moo-er, the glass of milk, or the hypnotist?


Its not as black and white as it appears, its more a conditioning of people to susceptabililty, not just a hyping of the product

Just because its your brain giving the orders, doesn't mean others can't influence it

Nibblet99 wrote:If someone hypnotises you to moo everytime you see a glass of milk, whose fault is the mooing? The moo-er, the glass of milk, or the hypnotist?


Its not as black and white as it appears, its more a conditioning of people to susceptabililty, not just a hyping of the product

Just because its your brain giving the orders, doesn't mean others can't influence it

So your brain is "hypnotized". Others have control of your brain, which is controlling you into doing things you don't want.

By brain you mean the physical mass of neurons in the skull (mostly).

But since the control isn't actually physical but really mental, a clearer way to state this would be mind.

2 points;

1- Your answer to correct this problem of evil doers hypnotizing peoples minds is that the government intervene to stop these mind controllers. Much like a Nanny stops little children from hurting themselves.

Question: We live in a democracy. (really a republic) Is not this freely elected government of, from, and by the people made up of the very same people it is supposed to protect? Not just its elected officials either, but all its soldiers, bureaucrats, employees, agents, representatives, contractors, and the rest, are not all these people of and from the very same population of hypnotized people? And, if these officials, bureaucrats, employees, and soldiers of the government don't do as the hypnotized population(HP) demands, or enough of it, doesn't the HP demand the government do something about? Lastly, if the government doesn't do what the majority of HP demands, say... kill the Jews (how outrageous! why not the same reaction for Iraqis?), then the majority of the HP has the democratic right to through the bums out and put someone in office who will do as they demand.

Seems there is no way the government can escape the same disease that is affecting the people or that a democratically elected government will rise to a level greater than the weighted average of its populace, far below the median.

Nanny is loony as the kids and you know it.

Smile for the cameras Big Brother has placed in London. They outnumber the people and the average Londoner is photographed over 300 times a day.

You Brits used to have a strong individualism and thirst for freedom.
Now you thirst only for mothers milk and protection - from Yourselves!

Ask yourself, who is hypnotizing who?

2- Who is this 'you' you refer to as being controlled by the brain?

PS. Please forgive any perceived lack of polite etiquette in my postings. I am a 2 finger typing American of French descent.