Geitner: Tax small biz more so Govt doesn't shrink!

[Jocassee]

To whomever mentioned $250,000--

$250,000 is the economic Mason-Dixon line this administration has chosen. With all of the corresponding societal, political, and-I fear--martial--implications.

[birdman]

As an additional note, if you notice, the upper incomes get hit hard by recessions, while the others don't.  The regression line for all three equates to roughly 5% AGI for the upper 1%, about 1% AGI for the 60% line, and 0.5% for the lowest line.  Hmm...so basically it's a rate of return beyond inflation of about 5% (a reasonable long term investment growth) but weighted to those who do the investment.  In other words, it's risk vs reward.  If someone starts a business and hires a few (or hundreds) of people, if it succeeds, they get the bulk of the reward (as they had the bulk of the investment be it IP or $), but if it fails, while the employees can lose their jobs, they didn't lose investment, and still have their skills, while the entrepreneur lost everything.  People deride business owners, but 60-70% or more of businesses fail, usually taking a big chunk of "normal" people's incomes and savins with it, but many times, those same people try again.  In my case, I nuked my own credit, not even taking a salary, just to keep paying my employees when my business was going down and I was trying to save it..I had my work truck repo'd, credit collections all over the place, but I paid it all off and just started again. 

[wmenorr67]

I just want to know why it would be wrong for the Government to shrink?  Unless it is for the children.

[RocketMan]

It's obvious that they are the ones who are running the game. That's why there's talk for tax cuts for them, to promote 'business', and tax rises for the little people.

Looks like you fell for this stupid myth.  Promoting class envy works.

[birdman]

Looks like you fell for this stupid myth.  Promoting class envy works.

Notice the distinct use of "them" in the post you reference...we live in dangerous times

[Tallpine]

my generation sucks (in general), bunch of whining miscreants

My observation of people in general, unfortunately.

Even in Montana 

The last few weeks have destroyed the last tiny sliver of faith that I had in humankind.

TANSTAAFL

[MicroBalrog]

Oh, as a note, I'm 33, and let me tell you, my generation sucks (in general), bunch of whining miscreants

Don't trust anybody over thirty. The hippies were right.

[Lanius]

Class envy?

Sure, take a long hard look at all the societies with giant income inequalities. Phillipines, for example. You want to live in that kind of country?
Huge income inequalities inevitably lead into power stratification, as people working two jobs to stay afloat can hardly spend time and money to worry about politics, while those who have cash to burn can always bribe..sorry.. lobby legislators.

Looks like you fell for this stupid myth.  Promoting class envy works.

Is it untrue that small business avoids taxation less often than giant companies?
It is you who have fallen for the myth that the elite or big businesses are actually in danger, or hounded, etc. They have the situation firmly in hand.

Economist, that noted leftie magazine has an article on that. States that among many things, Americans harbor illusions concerning social mobility, to wit that it's more prevalent than it really is.

I grew up right above the poverty line, like bottom 20%.  I worked hard as hell in school, worked three jobs to put myself through college, worked two jobs after I graduated, and you know what?  My income has gone up almost 800% in 12 years (that's roughly 18% per year)...and I hope like hell to make it into the higher percentages in the future.  What is the difference between me and the "average" person you say is getting hurt by this growth...well, I work 60-80hrs a week,

And you're not getting hurt by working 70 hours a week? No health issues, no ulcers, no stress related problems? No danger of eventual burnout? What about your social life or family? That doesn't matter?

Problem isn't ordinary employees, or people who work too much. The problem is in a$$holes like Goldman Sachs who can play the gov't like a Piano to get free cash, or in people like Chainsaw Al Dunlap. The problem is that business culture is oriented at the short term. I mean, take manufacturing... while some countries are doing great with it, in the US, it's been shrinking for decades? Why? Why can German companies manufacture machinery, sell it profitably, even though they have some of the highest costs in the world.. and US can't? Even while, objectively speaking, it must be far simpler to do business in the US. Easier to fire and hire, lax enviromental regulations, less tax burden, cheaper industrial real estate, better access to resources, cheaper fuels..

The things that will destroy America are prosperity at any price, peace at any price, safety first instead of duty first, the love of soft living, and the get rich theory of life."

Roosevelt was indeed prophetic ..

------------------------------
I guess this country offers less opportunities for social mobility, if people can put themselves through college by working just 15 hours a week, with no other support from their parents, graduate with no debt, and then have to pay a flat income tax of 19%,whether they run a business or are just employees.
Even a prestigious grammar school costs no extra money. Private schools are jokes mostly, the really good school are state run grammar schools that are allowed to select students by ability.. the US abomination that is a state high school doesn't really exist here.

[makattak]

The economy is not a zero-sum game.

[birdman]

Is it untrue that small business avoids taxation less often than giant companies?

Actually, yes.  Since most "giant" companies are C-corporations, and most small businesses are S-corps, LLC's, partnerships or soleproprietorships.  C-corporations pay corporate tax and then profits are taxed AGAIN as income (dividends), so thus they pay taxes twice, while S-corps, LLC's, etc only pay income taxes on the profits generated and removed from the business (neither pays taxes on re-invested profits btw, which is the primary reason WHY you get huge companies with very low effective rates, since their effective rate is taxes paid / profit instead of taxes paid / non-reinvested profit).  So for the same individual owning a piece of a giant company, or a piece of a small business, their effective tax rate is higher on the GIANT corporation (assuming their total income from their part of either is the same), since if it weren't for the C-corp tax, they would get a larger dividend.  Since C-corp taxes are non-zero (and in fact, are effectively the same as the highest income tax bracket), no matter who you are, you have a higher effective tax rate on profits generated in a large C-corp than in a small business.  Additionally, the tax expenses paid by large corporations are passed on as reduced dividend to the shareholders, so again, unless you think all "giant" corporations are basically single individuals, you are incorrect.

Problem isn't ordinary employees, or people who work too much. The problem is in a$$holes like Goldman Sachs who can play the gov't like a Piano to get free cash

You know there isn't some dude named "goldman sachs" right?  That its a publically traded company?  Why not buy a few shares?  You seem to be complaining about large businesses doing whatever they can to maximize profits for their owners (btw, if you have a 401k and/or a market index fund, you own part of G-S), congratulations, you are part of  "the man".  If you don't want profit motivated entitities to exploit the tax code, MAKE IT SIMPLER!  The problem is, politicians for years have looked at the tax code as a way to reward constituents...in fact, the amount of total tax relief in deductions in corporate and personal tax codes EXCEEDS the government revenue...so in effect, the government is (usually counter to market forces) putting pressure on the economy in very specific ways by, in effect, raising marginal rates, then providing targetted deductiosn...wouldn't everyone just prefer lower marginal rates and elliminate deductiosn?  of course...but then the pols would have no way to make friends.

The problem is that business culture is oriented at the short term. I mean, take manufacturing... while some countries are doing great with it, in the US, it's been shrinking for decades? Why? Why can German companies manufacture machinery, sell it profitably, even though they have some of the highest costs in the world.. and US can't? Even while, objectively speaking, it must be far simpler to do business in the US. Easier to fire and hire, lax enviromental regulations, less tax burden, cheaper industrial real estate, better access to resources, cheaper fuels..

Actually, in most european countries (germay included) manufacturing has declined due primarily to labor costs associated with entitlement growth...the only way france for instance can compete on the world stage with their domestic mfg is by MASSIVE tax breaks to their companies (which, btw, raise rates on individuals to make up the shortfall, so it does cause problems)

Basically, I've come to the conclusion that you have no real idea what you are talking about, and just like to complain about your lot in life.  Try having a long term degenerative neurological disease that is incurable, could render you blind or lame at any tijme, makes you fatigued constantly.  Lets see how much you complain then.  On the other hand, I'm just going to do my work, change the world my own way, love my girlfriend, hang out with my friends, work as hard as I can, and continue to try to educate those  "less fortunate" such as yourself who don't understand either the rewards (monetary and emotionally) that go along with self-made success.  Keep waiting for your handout, eventually, those like you will simply take everything from people like me...or at least TRY to.

[MillCreek]

If you don't want profit motivated entitities to exploit the tax code, MAKE IT SIMPLER!  The problem is, politicians for years have looked at the tax code as a way to reward constituents...in fact, the amount of total tax relief in deductions in corporate and personal tax codes EXCEEDS the government revenue...so in effect, the government is (usually counter to market forces) putting pressure on the economy in very specific ways by, in effect, raising marginal rates, then providing targetted deductiosn...wouldn't everyone just prefer lower marginal rates and elliminate deductiosn?  of course...but then the pols would have no way to make friends.

Another sticky-worthy statement.

[birdman]

Oh, and one other thing, in terms of whether working 60-70 hours a week hurts my health.  Well, I have multiple sclerosis, so I battle crippling fatigue constantly, I work as hard as I can so when my own immune system decides to take out my brain, I won't have to rely on everyone else to support me.  True, I didn't have much of a social lie in HS, but I had goals, getting into MIT, and being able to pay for it was one of them.  I have a life now, even with all the work, all those hours mean I not only can afford to live it up on vacations and weekends, but I can help my friends and family when they need help.  You would be amazed how much work and fun one can get done if you manage your time effectively. 

You criticize my work ethic as causing health problems or limiting my social life, when I do it dealing with health issues already that you probably can't fathom, and let me tell you, I have a hell of a life outside of work.  The saying is work TO have fun--you can't have one without the other.  If I didn't want to do the fun things (race motorcycles, go shooting, drive trucks off road), I'd work less.  It seems you expect to be able to just have "the life" without the sacrifice.

[Lanius]

You know there isn't some dude named "goldman sachs" right?

Yeah, I know. They're a bunch of a$$holes, that's what they are. The number of unethical things they have done could fill dozens of megabytes of text. Half of the current administration has ties to that company. Obama himself worked for them once.

And if I wanted to buy shares of a$$hole companies, I'd stick to ČEZ. They do productive things, like build powerplants and produce power, both of which are tangible goods I can understand and most of their misdeeds are publicly known. Goldman Sachs is more mysterious and stinkier, but a trading company that managed to pull what, a hundred days of profits, each day, during some of the worst financial times in the last fifty years has obviously rigged the game.

Actually, in most european countries (germay included) manufacturing has declined due primarily to labor costs associated with entitlement growth...the only way france for instance can compete on the world stage with their domestic mfg is by MASSIVE tax breaks to their companies (which, btw, raise rates on individuals to make up the shortfall, so it does cause problems

[citation needed]
Couldn't find a single article detailing tax breaks to either French or German car makers. I know of tax-breaks in central Europe, but those were given for 5 to 7 years to newly established factories.
As to 'decline' of manufacturing, it still produces 20% of their GDP and contributes to their trade surpluses. Japan has a similar share.
As to .. 'entitlement growth'. Afaik, conservative CDU has been in power in Germany for the last.. let me check. Six years? And they've cut welfare. The sociali democrat gov't before that did so too. So, it doesn' seem to me that their welfare state is growing. Looks like the opposite. It'll be a wonder if they'll be able to pare it down, as this silly universal franchise idea means welfare cuts are about as popular as smallpox.

If you don't want profit motivated entitities to exploit the tax code, MAKE IT SIMPLER!

Exactly my sentiments. Accounting standards also need to be higher, so taxes can't be dodged.
Some time ago, I worked with the ERP  software SAP. Didn't like it, the software is a monster, SAP AG are a$$holes, who won't even provide whole helps to companies which pay hundreds of millions for the right to use software. Because that would mean less business for their own consultants..

SAP actually has a a set of procedures that are used in order to hide profits by various means by related companies. Didn't check it myself, just was shown the interfaces by a co-worker. Management still needs to know the real profits, but for tax purposes, a company using SAP can cook up entirely different numbers.

Keep waiting for your handout, eventually, those like you will simply take everything from people like me...or at least TRY to.

I suppose you are of the Ayn Rand school of debating. When you don't have anything to say, you accuse people who disagree with you of being craven.. That's pathetic. I feel sorry for you. The only handouts I've ever recieved were from my parents, or gifts from old family members. I know I could've gotten a lot more had I asked for it, as others, more hedonistic family members have.

who don't understand either the rewards (monetary and emotionally) that go along with self-made success

Yeah? I mean, you don't know the first thing about what I do, yet you claim I don't understand success.

I perfectly well know what success is, and it's not 'earning' loads of money. Money is nothing more than means to an end, and success to me is making something work, and that's why I am studying engineering, and not finance or Darwin forbid 'management'. I mean, isn't management a bad joke? The mere fact that there are huge companies specializing in management consultancy makes it obvious 75% of these people don't have the faintest idea of what to do..

Arguing with people on the internet is not furthering my aims* these holidays.. so I guess I won't allow myself to post much.

Someone once said, we always lie the loudest when we lie to ourselves. 

You criticize my work ethic as causing health problems or limiting my social life, when I do it dealing with health issues already that you probably can't fathom,

I had no idea you had multiple sclerosis. And yes, I know what it is, but you can't expect others to have personal experiences with rare and crippling diseases. I know what chronic pain is, though, and I'm fairly glad I got rid of it.

And if you indeed do what you do, well, I'd say I understand your motivation to work hard, as you're living on borrowed time, so racing motorcycles seems actually understandable, not foolish. I can expect another fifty years of good health at least, and possibly much more. On the other hand, terminal diseases are handy. If one doesn't have long to live, one can do amazing *expletive deleted*it and escape legal consequences in the most reliable manner.

*complete bachelor's project a year ahead of schedule, a working pcp airgun and then set up numerical models of it, with the aim of eventually desiging an airgun valve that would have emergency power output useful for self defense purposes (300-400J).

[birdman]

Well, I think we have come to an agreement on some things.  I agree money is just a means to an end, for me, it is to allow me to do the things I want to do.  As for the rest, I think I got somewhat worked up, and resorted to ad hominem attacks, which usually aren't my forte (and are a crutch for those weak in debate), so I'm gonna take a break from this thread to think about it.  I do agree that certain things (G-S is a really good example, so kudos for that pick, I had a hard time "ignoring" their baggage to make my point) some companies do is well, criminal, but I don't like it when people (not necessarily you) confuse the goal of profit with immorality.  In my opinion, the generation of profit is by definition "moral"...in order to sell something, people have to buy it.  The problem arises when outside forces make it a three party transaction (regulation, tax code "encouragement", bailouts, etc) which skews the result--in a pure market, immorality in management would result in an impact to a bottom line.  One thing I will absolutely agree with you on (I think) is I despise "financial" firms.  I'm an engineer...I add value (take raw materials that have low intrinsic value and convert them through labor and/or IP to high intrinsic value products), which is what makes the economy non-zero sum (as stated earlier).  Financial (and legal for that matter, since we are unfortunately a nation run by lawyers which is a self-serving institution if I ever saw one) firms operate SOLELY on the basis of a zero sum economy (and when they claim not to, their value add is only due to hidden inflation, as in the most recent derivatives bubble), which is the antithesis of a true market. 
In a true market, both parties come out ahead, as each exchanges something they value less for something they value more...otherwise the transaction would not occur.  My attack (apologies) was in the implication that you (which is shown to be false, again, apologies) did not value the value of hard work (as many do these days), due to my interpretation of your opinions of the wealthy and/or corporations.  In my opinion, the dominant issue is effectively the basis of any con...you cant con an honest man, as the only way you can fall for it is when you expect to get something for nothing.  The financial sector, and unfortunately, the "values" and "work ethic" of the vast majority of younger and (in many cases, especially the baby boomers here) is a sense of entitlement which hasn't been earned...the pure essence of something for nothing, and it is that population that elects or invests in such a way to create the situtation we are in now. (promise the present at the cost of the future).

In closing, sorry for the personal attack, it wasn't justified, good luck on your airgun (I do some work with high pressure pneumatic systems and design if you want some engineering assistance...might as well leverage those few degrees I have), and can we at least agree on the above?

[Lanius]

I never said profit is immoral. Inefficiency is immoral, and that's why superior short term profits derived from neglecting stuff like maintenance, training, or long term effects may be immoral. Profit is just natural.. I mean, if there were no payoff, why would people risk money doing stuff?

Profit indeed is the basis of all endeavours. I mean, if I was sure I won't be able to make myself fiberoptic sights for my Sig knockoff for under $200*. It needs these sights, and If I can save $120-150 by a day's work, I can claim that that work  gained me 150$.. (Gun costs $300 and works reliably, putting $200 sights on it'd be just weird)

Apology accepted. I should've made myself more clear about the distinction. What I dislike is beancounters taking over companies and trying to put value on everything and decide from there. I've read of too many stories where that style of management has lead to decline. Like someone said.. "the traders fear what they cannot purchase, for a trader cannot comprehened a thing that is priceless".

Thanks for the offer. Once I have the questions and the design issues nailed down, I'll send you a link. A pcp airgun is indeed a high pressure pneumatic application. I'll be modelling it by the finite volume module in Ansys, to which I've access through school. That'll be just to model it, the design work I'll complete by the book the company I'm doing it for has lent me. It's in German, I guess I'll learn some new vocabulary.

[birdman]

I like the long term aspect...and good companies know it's value.  What many people don't realize is just how much most large companies invest in their personnel (education reimbursement being a big one)..something found in most engineering or product oriented firms, and very rarely in the financial or legal sector.  I used to ask why, but I think it's the long/short term outlook.  If an engineering firm doesn't keep it's employees at the cutting edge, or increase the value of their work force through education, others will, and create superior products.  In the legal field, it's too internally competitive because you can't simply create new demand by creating a new product.  In finance, you can, but it inflationarily dilutes the value of the rest, so the value add is merely perceived.  In legal, increased demand is through creation of new laws that require legal consultation...which is the genesis of my point about it being self serving....scary when you think about it in that way.

Where are you going to school? What major?

[Lanius]

[offtopic]
I have a bad procrastination habit.. and never learned to properly study, as  elementary school and grammar schools were a breeze. Only figuring out that now. Completed one year of EE study at Czech Technical University in Prague, then dropped out of their CS program due to some bad behavioral psychology decisions. Then worked in business IT, got assigned to the SAP monstrosity, which was the first programming related work I disliked. Once I saved up some money and bought some toys I decided to get myself fired and complete school so I'd have more choice. Wasn't sure whether CS or ME (mechanical engineering), but it was too late in the year to apply for CS. So ME it was.. at the Brno Technical university.

What sucks is, that I could've gone to MIT. My ex-girlfriend graduated from MIT last year.. if I hadn't been half-arsing grammar school, or had ambition back then, I could've easily studied and passed the SAT.

Doesn't really matter... except that she's now in the USA, and not doing okay (sort of burnout following the school), and it kinds of irks me I can't help her more from here.

 A competitive school makes people compete more, but I'm asocial, meaning, I don't see the world in these terms and primate competition games don't interest me much. Only fighting myself... and I guess if I'll do stuff at this school, I'll eventually learn a lot there. The key is to be interested in what I'm doing..

I have this idea for a liquid fuelled gun I'd like to engineer if I ever make it to PhD level. Basically it'd have a combustion chamber, where fuel would get injected by use of welding oxygen from a pressure bottle. The mixture would be pressurized, held in place by an overpressure sensitive valve. Once the trigger is pressed, a spark would ignite the mixture and the exhaust gases would shoot out a bullet. The idea is to provide variable power levels, do away with casings, primers...etc...

Of course, the problem is that the precision achieved weighing propellant when reloading ammo would need to be transferred to the mechanism. But I believe it'd be possible to model such a system and use a computer to set the burn conditions just right...

Asked on gun designer about that, he says it could work, but that it's too complicated for military use, and would likely be heavy.

I'm also wondering whether making a gun that'd have no casings, just bullets and loose powder. Cocking would move powder from the magazine into a chamber and compress it, stick an electrode into it. A sparkplug could make the electrodes ignite the powder.. again, no casing, no primers.. which could drive down cost per shot. Amazed no one tried making something like that yet. I mean.. what's the big deal? It's fairly simple, won't be more mechanically complex than a machinegun..

Chamber seals would have to be periodically replaced, and battery charged, but as a sports or hunting gun it could work.. if it's possible to ignite gunpowder by hot enough sparks.

So.. I guess it's good that I've been working on an engineering degree... If I keep at it, one day I may get away with doing something. Software development is a good hobby though.

Not sure whether I'll stick around for a Masters' degree.. but If I have, I'll probably pick whatever will be most compatible with researching these gun ideas.

which is the genesis of my point about it being self serving....scary when you think about it in that way.

On GRM, I posted this idea for citizen participation in legislation. People could choose to join an online forum, and legislators would have to convince the majority of these concerned citizens, paragraph by paragraph, of the necessity of the legislation. It'd all be done under real names, openly, on some sort of secure web forum. Anonymity and security are incompatible, but IMO, anonymous legislation just doesn't compute..

Sure, it'd take volunteer work in reading it, but I've been told people would love being able to make a genuine difference. I'll try elaborating on that, maybe writing it up as an essay and annoying people with it.

[birdman]

Ah, a Czech?  My best friend emigrated here from there...taught me some interesting words :)

On the gun ideas...gaseous fuel has been looked at, but you can't get enough density.  Liquid has been done (was originally baselined for the crusader, check it out, lots of papers on it).  In terms of a bulk propellant, the primary issue was one of a device that could accurately measure and survive next to/in the chamber...I guess the biggest problem advanced research in these areas has found is one of the KISS principle...tough to be simpler than a good old cartridge case.  Not trying to deter you, just be sure to take into account all aspects of the SYSTEM instead of just one part of it (something that most engineers take a while to learn)

[Lanius]

I'm not actually a Czech... I'm posting this from Moravia, was born in the Slovak Socialist Republic, which was part of the Czechoslovak Federal Republic... and am fluent in both Czech and Slovak languages, in both of which I can pass as a native.

Gaseous fuel? I meant a liquid. IMO, liquid is 1/g per cm^3 or so.. you can get enough. Problem is oxidizer, but welding oxygen at 50 atmospheres... I guess I should run the numbers, but rough calculations concerning pressure and fuel/oxidizer masses say it could work..

[RoadKingLarry]

I never studied all that fancy business stuff so I may not really understand how this stuff works.
My layman's understanding of it all may be faulty.

If I had a business and my goal was to derive a minimum set dollar amount for profit I wold have to consider all input/overhead expenses Vs. the price of my product/service and set my price at a level that would net me the profit I desired.
Costs would include but not be limited to infrastructure expenses like mortgage/rent of facilities, equipment and maintenance, utilities, insurance and possibly legal guidance. There would also be payroll, payroll taxes, property taxes, transportation/shipping costs, etc, etc, etc...

So if one of my expense variables went up I would have to raise my price to maintain my profit target.
With taxes being a expense cost, if taxes go up why would I not raise my price?

Why is that so hard for some people to understand?

[Lanius]

That's true. Then people don't trust merchants, as they are of course tempted to raise prices, excuse that with higher inputs while nothing of that sort has happened. It's not impossible.

IMO, in a few years time, once hud in glasses work, it'll be possible for stores to display cost information on demand to shoppers. How much they bought that stuff for, how much it cost to task employees to move it there, what's the profit margin.. .etc etc. Transparent trading. I'm not sure whether it'd work... people'd carp of course..

The main problem is, that people are spoiled I think. Times have been too good in the 90's in many places.

[birdman]

I'm not actually a Czech... I'm posting this from Moravia, was born in the Slovak Socialist Republic, which was part of the Czechoslovak Federal Republic... and am fluent in both Czech and Slovak languages, in both of which I can pass as a native.

Gaseous fuel? I meant a liquid. IMO, liquid is 1/g per cm^3 or so.. you can get enough. Problem is oxidizer, but welding oxygen at 50 atmospheres... I guess I should run the numbers, but rough calculations concerning pressure and fuel/oxidizer masses say it could work..

Ah, apologies for the assumption.  Liquid propellants have been looked at quite a bit (see my crusader comment), but have always used a quasi-monopropellant or a true monopropellant, with all components being liquid at normal temperatures and pressures (introducing gas doesn't allow enough density, and it is very difficult to get sufficient mixing to get the burn rate near where it needs to be).  They do get substantially higher performance than solid propellants due to better volumetrics, and it allows for infinite variability of charge mass (which is why it was always looked at for artillery), however, the complexity of the -system- pretty much precludes its use in small arms, especially repeating rifles.  For instance, if you look at filling a 5.56 sized chamber (~40mm long) with liquid and doing so at 10-20 times per second, the required bulk flow velocity is ~400mm/second.  Thats not so bad, but you can't use the entire diameter of the chamber as the flow path, so the typical flow path only occupies 2-5% of the breechface area, yielding velocities in the 10-40m/s range..which is far too high for reasonable flows (and the injection pressure would be extremely high).  Now, what would be something interesting to look at is could scaled up versions of the high speed, high flow direct injection injectors in some state of the art engines be redesigned to deliver the right flow rates?  Effectively, you would need a direct injection of ~600cc/min, which is in the range of current automotive injectors...and some ofthe monopropellants could be injected just like gasoline or diesel in a car.   Hmmm...you might be onto something!  I'm going to run some numbers on this...technology has really changed, and those components might be the right ones to make it work, on small scale, arty is still really hard.

[makattak]

I don't care how much it "costs" (1) to make a good. I don't care how much it "costs" the store to purchase the good. I don't care how much it "costs" the store to provide employees to stock, recieve, and answer questions about the good.

I care how much the good costs me and whether those costs are less than the benefit to me. (AND, whether some other good costs me less or benefits me more.)

Is the store/manufacturer making a killing or just barely scratching out a profit? That's immaterial to my decision to buy the good.(2)

In fact, the beauty of prices and markets is that a consumer doesn't need all that information. All the costs (not "costs") are conveyed by the price. If the price is more than your benefit, don't buy it.




(1) I am using the word "costs" in quotation marks as those "costs" will never include opportunity costs which are very often extremely large, especially in high profit products.

(2) At the margin as a consumer, there are other factors that can influence my decision of where/whether to purchase a good.

[RoadKingLarry]

That's true. Then people don't trust merchants, as they are of course tempted to raise prices, excuse that with higher inputs while nothing of that sort has happened. It's not impossible.

IMO, in a few years time, once hud in glasses work, it'll be possible for stores to display cost information on demand to shoppers. How much they bought that stuff for, how much it cost to task employees to move it there, what's the profit margin.. .etc etc. Transparent trading. I'm not sure whether it'd work... people'd carp of course..

The main problem is, that people are spoiled I think. Times have been too good in the 90's in many places.

Just for the record I grow and sell fresh produce on a fairly mall scale. It is none of my customers business how much it costs me to produce a home grown, vine ripened tomato 3-4 weeks ahead of nearly every other grower in the area. If they ask how I got ripe tomatoes a month earlier than is normal for our area I'll tell them I have a high tunnel greenhouse operation. Then I tell them what my prices are. I don't go in to detail about the cost of my greenhouse or the drip irrigation I use or the cost of seed and seed starting materials nor do I itemize my labor for them to consider if my produce is worth their dollars. I've been selling fresh tomatoes for 3 weeks already this year, I've had 2 people question my price. My only comment was that they were certainly welcome to go and buy fresher, better elsewhere. One of them ponied up, the other walked away. I sold $120 worth of 'maters in 3 hours Saturday.
I fronted a pretty good wad of cash as well as time, blood, sweat and tears to be the first to market with tomatoes. my price includes all of that plus the risk I took trying a new method (for me) of growing tomatoes.
You're darn straight I charge a premium price for them.

[erictank]

Don't trust anybody over thirty. The hippies were right.

I turn forty the day after tomorrow.  Should I cast wary, distrustful looks at the mirror?