jtur88:
Nevertheless, the dentist or the boat builder or the schnoo-baker are the ones who fix the prices, not the consumers. They all know that sooner or later, the tax assessor will come around, and they have to set their prices high enough to have their livelihood left over after taxes. The consumer has no such power. The consumer either buys the schmoo pies at the prevailing price (which includes the tax burden born by the producer, along with all his other costs), or stops buying them, in which case the baker overestimated the market demand, and suffers the predictable consequences of doing so.
Unless you have a dental market in your town where it customary for a person with a toothache to call around to the dentists and tell them “I’ll give you $200 to pull my tooth”, with the consumers thus setting the prices, and the dentists can take it or leave it.
Taxes are a cost of doing business. Sellers print the price tags, which reflect those costs. The consumer pays them. When you buy a roll of toilet paper, do you think that it is you who ultimately pays the cost of a carload of timber, but Kimberly Clark’s shareholders who pay the taxes on their dividends? Why the difference?
**DinoR **did a really good job explaining tax incidence to you, so I’m not sure how I could do any better. Still, most of your suppositions are mistaken. Consumers often have lots of power to effect pricing. They can stop buying Schnoo pies entirely or go to the dozens of other bakeries in town with lower prices. It’s a common mistake to think the party printing the price tag has complete control, but it’s very naive. You disregard the bakery suffering the “predictable consequences” of overestimating consumer demand as if the consequence is anything other than being forced by the consumer to lower prices.
Ok well I used some quotes from this thread directly, and here is the reply I got from my brother.( I provided the PDF link on how money is created from the BOE website, and used Jonathan Chance good explanations for him to look at.)
Here we go…
My brothers reply
Bank of England - it doesn’t state that when money is created to put into the economy (through the banks) that a liability has to be incurred by the government in order to create the base money, this is the whole essence of a debt based economy and this is what I mean! When I say debt based economy.
It’s alright for them to say they give money to banks but they conveniently leave out the section about swapping iou’s with the government! Which creates the leverage for the BOE to allow the banks to lend money as the BOE sells these iou’s to the banks for them to use as reserve’s in order to lend.
My point above is what I mean about being taxed twice, ie we pay our taxes to pay the interest the government has to pay on the debt it incurred to create the base money, and pay interest to the bank for the money created being lent to us through them.
Inter bank borrowing rate means nothing, go back to my points above, no matter what rate there is to borrow, any rate the government is being given just to create its own money is ridiculous.
Again doesn’t talk about fractional reserve banking, how currency is created ie central government swaps iou’s with the central bank and the central bank uses the IOU it gets in return to create base money at a leverage of 10-1 to give to the banks at interest, which we pay for in taxes… Simples!
There all very narrow minded views, and not all the facts are present in each quote, therefore rendering the view points erroneous.
We don’t need the Bank of England, we can just create it ourselves through central government and be rid of income tax altogether, this happened in the US when Andrew Jackson denied the bank it’s charter, US national debt paid down completely in a few years.
And before you start on this caused bank runs and such, this was orchestrated by the bankers who artificially restricted the money supply themselves through there own banks in order to force the government to charter another central bank = 1913 federal reserve act!! BOOM!!!
As I’ve said you can’t come at a new idea from a past perspective, I feel a tad offended that you think you can go away for one night and think you’ve blasted my argument out of the water
jz78817
November 4, 2014, 1:40am
23
I like how we’re all “narrow minded,” like he has some genius insight that nobody else does.
don’t argue with idiots. they drag you down to their level and beat you with experience.