Tax cuts - They never learn, do they?

Originally posted by @wolfgang59
No.
Increased supply will depress prices leading to deflation and job losses.

All they needed in Zimbabwe was a few extra cranes to balance out the inflation and everything would have been Ok. 🙄

Too many cranes causes deflation, one would assume to few cranes causes inflation, sure hope you didn't teach economics.

How do you know the ideal number of cranes in an area? What is your experience?

Originally posted by @wajoma
All they needed in Zimbabwe was a few extra cranes to balance out the inflation and everything would have been Ok. 🙄

Too many cranes causes deflation, one would assume to few cranes causes inflation, sure hope you didn't teach economics.

How do you know the ideal number of cranes in an area? What is your experience?

Cranes.
Who would have thought their number determined the economy!

🙄

Originally posted by @wolfgang59
Cranes.
Who would have thought their number determined the economy!

🙄

That was your assertion, a particularly stupid lack-wit assertion, are you retracting it.

Originally posted by @wajoma
That was your assertion, a particularly stupid lack-wit assertion, are you retracting it.

Is taxation always bad, Wajoma?

Originally posted by @lundos
Wait what? Higher demand is [b]always there?

Lets e.g. look at something everyone need - clothes. And lets look at different companies like Gucci (high end) and Zara (vertical retailer). Both are working on a global scale. A cost reduction - without a price reduction - will not change the demand for either company's product portfolio. It will just in ...[text shortened]... ilities and most of them doesn't include a return to society as a whole or will increase demand.[/b]

Wait what? You're done talking about how tax cuts help businesses like crane rental increase employment, right through from crane manufacturing jobs, jobs in the supply of resources to crane manufacturers, direct employment at the crane rental Co, making projects more feasible in industries requiring the rental of cranes. So you'd agree with all those assertions at least. You can't find any holes in that theory so you'd like to change the subject? Is that where we're at.

Originally posted by @wajoma
Wait what? You've done talking about how tax cuts help businesses like crane rental increase employment, right through from crane manufacturing jobs, jobs in the supply of resources to crane manufacturers, direct employment at the crane rental Co, making projects more feasible in industries requiring the rental of cranes. So you'd agree with all those asse ...[text shortened]... an't find any holes in that theory so you'd like to change the subject? Is that where we're at.

I certainly don't agree with your assertions.

You wrote that demand is always there (higher than supplied by the market), because people like strive to improve their lives.

This is only for the crane business?

If there is a mature market, like most markets for cranes, and there is higher demand than supply then taxes won't stop either the company mentioned or a competitor.

If your imaginary cost-benefit analysis show an increase in trade that doesn't cover the cost of a new crane due to taxes (and only taxes), your imaginary company either doesn't pay taxes (negative EBIT), cannot cover the small interest rate of buying a new crane, the demand isn't much higher than current demand or calculate wrongly. Either way the loss in margin for the crane company is borderline zero.

Secondly, the taxes are spent by government to educate citizens to secure a competitive future workforce, build infrastructure for 'our' crane company to sell it's products, protect it if a competitor steals the other cranes, environment protection, and many other things. These benefits are much higher than a negligent revenue increase from an added crane that only taxes hold back. At least in theory since that is where we are.

Originally posted by @lundos
I certainly don't agree with your assertions.

You wrote that demand is always there (higher than supplied by the market), because people like strive to improve their lives.

This is only for the crane business?

If there is a mature market, like most markets for cranes, and there is higher demand than supply then taxes won't stop either the company ...[text shortened]... se from an added crane that only taxes hold back. At least in theory since that is where we are.

I never said that tax was the only cost that stopped a crane from being bought (and all the benefits that brings, employment in dozens of different industries that go to producing the crane, maintaining the crane and the freeing up of possibiilties that the crane makes) That is what is known as your strawman and it's the second time you've tried to slip it in.

If the tax has so little effect, you're probably volunteering to pay the tax bill for a month or two, right.

Care to have guess on the tax component of a new crane?

Originally posted by @lundos
I certainly don't agree with your assertions.

You wrote that demand is always there (higher than supplied by the market), because people like strive to improve their lives.

This is only for the crane business?

If there is a mature market, like most markets for cranes, and there is higher demand than supply then taxes won't stop either the company ...[text shortened]... se from an added crane that only taxes hold back. At least in theory since that is where we are.

BTW, the Co I work for has a policy of promoting within the Co because they've had such a bad run with the books learnt folk.

Originally posted by @wajoma
I never said that tax was the only cost that stopped a crane from being bought (and all the benefits that brings, employment in dozens of different industries that go to producing the crane, maintaining the crane and the freeing up of possibiilties that the crane makes) That is what is known as your strawman and it's the second time you've tried to slip it ...[text shortened]... e tax bill for a month or two, right.

Care to have guess on the tax component of a new crane?

Aha. So now it's not tax that's holding the purchase of a new crane back but multiple issues? Well, then that's a different case altogether. One might call it moving the goal post.

Secondly, it's not paying the tax itself on the crane that is my argument. It's the argument in your business case. You only pay tax from gross sales minus cost of goods sold and tax deductions.

Lets for arguments sake say a company wants to buy a crane for 100M USD. They can borrow the money at a three percent interest rate and demand in the market are maybe 5M USD yearly. Is tax in any way relevant for this business case?

Do US companies pay VAT?

Originally posted by @wajoma
BTW, the Co I work for has a policy of promoting within the Co because they've had such a bad run with the books learnt folk.

Well, congratulations. Not all companies need 'book learned' people.

Learning from books tend to help in many areas though. Legal departments, finance departments, analysis departments, engineering, astrophysics, medicine, etc. It tends to help you know what you are talking about and in some areas learning by doing isn't enough.

Of course, getting an education is only getting a bigger skill box. If you don't know how to use them, it doesn't matter what you learned. Maybe your HR department hired the wrong people.

Originally posted by @lundos
Aha. So now it's not tax that's holding the purchase of a new crane back but multiple issues? Well, then that's a different case altogether. One might call it moving the goal post.

Secondly, it's not paying the tax itself on the crane that is my argument. It's the argument in your business case. You only pay tax from gross sales minus cost of goods sold ...[text shortened]... e 5M USD yearly. Is tax in any way relevant for this business case?

Do US companies pay VAT?

There have been no goal posts moved by me. The question was always how do tax cuts help. Wolfgang asked for an example and he got got it, he got it good.

Any increase in cost makes a purchase less viable. In every case there is a go/no-go line. In cases very close to that line any reduction in cost pushes a few more ventures onto the 'go' side of that line. There are cases where a new crane is completely out of the question, there are cases where the benefits make it viable regardless of the rate of extortion. But there are some cases which are much closer to the line, much harder to discern and these are the cases where tax cuts can mean the difference.

Aus BTW, not that that makes any difference to the argument.

Edit: Wolfgangs post,

"Lets take your assertions one by one.

Imagine a business, your choice - any industry, any size.
And its costs are suddenly reduced.

Explain to me how that creates jobs.

Originally posted by @wajoma
There have been no goal posts moved by me. The question was always how do tax cuts help. Wolfgang asked for an example and he got got it, he got it good.

Any increase in cost makes a purchase less viable. In every case there is a go/no-go line. In cases very close to that line any reduction in cost pushes a few more ventures onto the 'go' side of that ...[text shortened]... stry, any size.
And its costs are suddenly reduced.

Explain to me how that creates jobs.[/i]

I understand your go/no-go line argument. However, taxes aren't a cost reduction in that sense in business cases. You work only with operating income. I've never seen a P&L with taxes in it.

If you argue that paid taxes are the cause for lower equity, then you have a point in the lack of up front capital. However, the level of borrowing to make a good business case is a matter of interest rates, which may or may not differ half a percentage depending on the size of the (future) debt, and the rate of which you have to make good of the debt, which effects the assets and equity and not operations.

If your demand estimate(s) differs more than half a percentage, then it's more uncertainty and risk aversion than taxes that are holding the company back.

Of course, a free market man like yourself understands that in equilibrium profit equals marginal cost, so no extra demand are available.

Originally posted by @lundos
Is taxation always bad, Wajoma?

Bump.

Originally posted by @lundos
Bump.

This isn't moving the goalposts, it's playing on an entirely different pitch, start a thread I probably won't waste my time.