End of the Twinkie?

[aborgman]

Originally Posted by sneha1965

That there you said, it's completely wrong.

Right... The standard model of tax incidence taught in every Econ course around is wrong... And elasticity of demand/supply has no affect at all on how increased costs of production change supply/demand.

Makes sense... If we believe you over basically every economist in existence.

[sneha1965]

No, refuting that businesses pay a higher advertising cost during sporting events and that it is not passed on to customers is not negotiable. trying to refute just shows how pathetic you are in needing to have the last word and be right.

[dullsilver_mike]

It doesn't need to be passed on to customers if they're making more revenue because they pushed far more units at only a slight reduction of profit per unit.

I took a single economics class my whole life and Aborgman is right that the idea is part of the 101 curriculum.

[sneha1965]

I don't doubt that it's part of Econ 101 but so much has been written about this over the years that I find it hard to believe that anyone wouldn't know about it.

[dullsilver_mike]

So, because companies choose to pass tax increases on to customers instead of utilizing these other valid strategies for dealing with the increased cost per unit, we should vote to make sure there are no tax increases?

Why not vote for the tax increases then only buy products and services from the companies that choose not to pass the cost along to customers?

This whole trickle down supply side argument sounds like this to me: "businesses behaved in a way I don't like! I know, let's change the whole system so they have fewer excuses to behave that way instead of just holding them accountable for their behavior." It's not a valid argument for reduction of corporate taxes.

[aborgman]

Originally Posted by sneha1965

I don't doubt that it's part of Econ 101 but so much has been written about this over the years that I find it hard to believe that anyone wouldn't know about it.

Where profits are low or elasticity of demand is low - most costs will be passed on.

Where profits are high, elasticity of demand is high, and numerous substitute goods exist - most costs can't be passed on due to the loss of business it will cause.

[nutdog]

Originally Posted by aborgman

Which is exactly why I said if you want to go John Galt - do it... but you lose your US citizenship (never to be reclaimed), you forfeit the right to ANY US entry VISA (ever), and you are no longer individually allowed to own any property in the USA.

Don't want to pay for the privileges of US citizenship? Fine - but you lose them, forever, never to be returned.

If you want the homecoming parade in my town, you have to pay.

[LiquidMidnight]

Ahh, good ol' elasticity. I used to actually build predictive regression models based on point price elasticity data. Good times.

On the subject of global elites having an abstract concept of citizenship, I took an international business MBA course a while back. One of the required texts was an editted book, and I specifically remember reading a chapter in which the author argued that very thing: the wealthy elite do not necessarily see themselves as having citizenship and loyalty to any specific country. Interesting stuff. I don't have the book in front of me right now, but it was a very interesting read.

[LiquidMidnight]

Originally Posted by aborgman

Where profits are low or elasticity of demand is low - most costs will be passed on.

Where profits are high, elasticity of demand is high, and numerous substitute goods exist - most costs can't be passed on due to the loss of business it will cause.

I think the fear that a lot of people are pushing is that if normal profits aren't good, then companies may close up shop and go to greener pastures. Hopefully as more countries become industrialized and their citizenry experiences higher standards of living, normal profits will equalize, leading to places like America becoming more attractive again. A pipedream? Perhaps.

[aborgman]

Originally Posted by LiquidMidnight

Ahh, good ol' elasticity. I used to actually build predictive regression models based on point price elasticity data. Good times.

On the subject of global elites having an abstract concept of citizenship, I took an international business MBA course a while back. One of the required texts was an editted book, and I specifically remember reading a chapter in which the author argued that very thing: the wealthy elite do not necessarily see themselves as having citizenship and loyalty to any specific country. Interesting stuff. I don't have the book in front of me right now, but it was a very interesting read.

Some articles on that:

http://www.ft.com/intl/cms/s/2/740ff...#axzz2CreyOuFt

http://www.alternet.org/story/155341..._to_country%29

http://blogs.reuters.com/felix-salmo...-billionaires/