(01-13-2017 01:51 PM)MplsBison Wrote:  

(01-13-2017 01:42 PM)Kaplony Wrote:  increased cost of doing business because of government regulation being passed on to the consumer through a price increase

Good point, I forgot that consumers accept any price increase, for any reason, and continue right on buying the product at 100% exactly the same sales rate.

They don't, which is why this type of thing is bad for small business owners.

(01-13-2017 01:51 PM)MplsBison Wrote:  

(01-13-2017 01:42 PM)Kaplony Wrote:  increased cost of doing business because of government regulation being passed on to the consumer through a price increase

Good point, I forgot that consumers accept any price increase, for any reason, and continue right on buying the product at 100% exactly the same sales rate.


Then I woke up.

This is another point I was going to make.

Any fast food joint that thinks they are going to stay in business by doubling their cost of soda isn't going to stay in business very long.

The mayor should simply let things play out and see what happens.

(01-13-2017 01:22 PM)MplsBison Wrote:  

(01-13-2017 12:25 PM)Hambone10 Wrote:  We all understand that restaurants etc often barely break even on many items and then cover all of their expenses on things like $2.00 sodas... but SOME people simply look at that and say, that's $1.50 (or whatever) in egregious profit... ignoring that they likely lose $1 on your burger.

The point is to reduce the consumption of sugar drinks, so as to massively save in health care costs associated with metabolic disease.

And that is correct.

That isn't true (that this was the point). It may be YOUR opinion, but it wasn't the point of the tax. If that were true, then he wouldn't be upset that companies raised the prices to reflect the tax... as that would have been exactly what he wanted them to do.

I've got no problem (generally) with sin taxes.... the complaints here are about the stupidity of a Mayor who apparently didn't think that taxes caused prices to rise.

(01-13-2017 01:54 PM)Fitbud Wrote:  

(01-13-2017 01:51 PM)MplsBison Wrote:  

(01-13-2017 01:42 PM)Kaplony Wrote:  increased cost of doing business because of government regulation being passed on to the consumer through a price increase

Good point, I forgot that consumers accept any price increase, for any reason, and continue right on buying the product at 100% exactly the same sales rate.


Then I woke up.

This is another point I was going to make.

Any fast food joint that thinks they are going to stay in business by doubling their cost of soda isn't going to stay in business very long.

The mayor should simply let things play out and see what happens.

I was thinking more along the lines of the mom and pop convenience stores, etc. Pretty sure this is going to hurt business.

(01-13-2017 01:22 PM)MplsBison Wrote:  

(01-13-2017 12:25 PM)Hambone10 Wrote:  We all understand that restaurants etc often barely break even on many items and then cover all of their expenses on things like $2.00 sodas... but SOME people simply look at that and say, that's $1.50 (or whatever) in egregious profit... ignoring that they likely lose $1 on your burger.

The point is to reduce the consumption of sugar drinks, so as to massively save in health care costs associated with metabolic disease.

And that is correct.

If the government wasn't involved in our healthcare, that wouldn't be a problem.

The government needs to keep its nose out of this stuff.

(01-13-2017 01:39 PM)MplsBison Wrote:  I'd rather just force big sugar/big soda to pay for the costs directly, but that isn't politically possible. They buy off too many politicians.

What difference would it make, to the consumer, at which level this tax is applied?

(01-13-2017 01:54 PM)Fitbud Wrote:  This is another point I was going to make.

Any fast food joint that thinks they are going to stay in business by doubling their cost of soda isn't going to stay in business very long.

The mayor should simply let things play out and see what happens.

Wow...
Taxes like these impact everyone equally. Certainly you may see a drop in soda sales, but what fast food joint is going to simply eat these costs... and if they COULD simply eat these costs, why didn't they dramatically under-cut their competition before the tax?

They didn't double the cost of soda. They maintained their margins and reflected the tax increase... just like every other fast food joint will.

Works like gas taxes. Sure, there are minor differences between shops, but not big ones (except for places that bank on you needing to use THEIR card) ... and of course you buy far more gasoline at a time than soda. People will drive miles to save pennies on gas, but won't bat an eye at a 25 cent difference in the cost of a 'meal'.

(01-13-2017 01:51 PM)MplsBison Wrote:  

(01-13-2017 01:42 PM)Kaplony Wrote:  increased cost of doing business because of government regulation being passed on to the consumer through a price increase

Good point, I forgot that consumers accept any price increase, for any reason, and continue right on buying the product at 100% exactly the same sales rate.


Then I woke up.

They don't. Eventually because of increased prices sales go down. Sales go down enough and the business closes. Then not only do the people working at the business no longer have jobs your precious nanny state government isn't getting any tax revenue. Like most leftist policies nobody wins but at least somebody felt good about it for a little while.

(01-13-2017 01:56 PM)VA49er Wrote:  

(01-13-2017 01:54 PM)Fitbud Wrote:  

(01-13-2017 01:51 PM)MplsBison Wrote:  

(01-13-2017 01:42 PM)Kaplony Wrote:  increased cost of doing business because of government regulation being passed on to the consumer through a price increase

Good point, I forgot that consumers accept any price increase, for any reason, and continue right on buying the product at 100% exactly the same sales rate.


Then I woke up.

This is another point I was going to make.

Any fast food joint that thinks they are going to stay in business by doubling their cost of soda isn't going to stay in business very long.

The mayor should simply let things play out and see what happens.

I was thinking more along the lines of the mom and pop convenience stores, etc. Pretty sure this is going to hurt business.

This is why I was thinking only of places that sell prepared food.

"The distributors sells five-gallon boxes of syrup that can be used in soda fountains, and each box costs a retailer about $60. Thanks to the city's new tax, though, retailers have to pay $57.60 in taxes for each of those boxes of syrup."


Generally speaking, (at least around here) grocery stores do not sell fountain drinks.

(01-13-2017 01:53 PM)VA49er Wrote:  They don't, which is why this type of thing is bad for small business owners.

I'm supposed to be sympathetic to stores that peddle legal crack (sugar)?? Sorry, not going to get much from me there.

They will need to adapt.

(01-13-2017 01:54 PM)Hambone10 Wrote:  If that were true, then he wouldn't be upset that companies raised the prices to reflect the tax... as that would have been exactly what he wanted them to do.

Ah, you're right.

I could see his response coming from two different ways:
- he wanted them to keep the price of soda the same, and just pay the tax out of their own pocket, so he's mad that they're trying to maintain profit levels
- he wanted to get a large tax revenue from this, so he's mad that the price is too high and will curb consumption too much

(01-13-2017 01:56 PM)HarmonOliphantOberlanderDevine Wrote:  If the government wasn't involved in our healthcare, that wouldn't be a problem.

The market would make it so that ingesting liquid sugar doesn't cause metabolic disease???

Boy, the Dept of HHS better get on the phone to you pronto!

(01-13-2017 02:00 PM)Bull_Is_Back Wrote:  What difference would it make, to the consumer, at which level this tax is applied?

Don't think it would necessarily matter to the consumer, but I'd rather force PepsiCo to pay the money out of their own pocket directly, than just cause the price increase to happen at the last step (essentially just a higher markup from the wholesale price that the gas station pays to PepsiCo for the product).

(01-13-2017 02:08 PM)Kaplony Wrote:  Sales go down enough and the business closes.

Yep, the business just sits on its butt as says "welp, we're screwed. It's over boys. Nothing we can do."

Definitely couldn't try to survive, by ... you know ... selling something else. Nope, never work.

(01-13-2017 02:16 PM)MplsBison Wrote:  

(01-13-2017 02:00 PM)Bull_Is_Back Wrote:  What difference would it make, to the consumer, at which level this tax is applied?

Don't think it would necessarily matter to the consumer, but I'd rather force PepsiCo to pay the money out of their own pocket directly, than just cause the price increase to happen at the last step (essentially just a higher markup from the wholesale price that the gas station pays to PepsiCo for the product).

So it would not impact demand, in the least, pepsi would add the tax right back into the price, and their profits would be unchanged...

Oh and they would suffer against foreign competitors who's governments do not burden the producers. Maybe they will set up a factory in Mexico and Americans will lose jobs.

(01-13-2017 02:25 PM)Bull_Is_Back Wrote:  pepsi would add the tax right back into the price

Pepsi doesn't sell directly to consumers. They have wholesale agreements for X amount of product at Y price with ... well everyone you can think of. Walmart, Target, Walgreens, 7-11, [Vending Machine Company], etc etc etc

So if you directly taxed/fined the corp, I don't think they can just jack up the wholesale price agreements.

(01-13-2017 02:16 PM)MplsBison Wrote:  

(01-13-2017 02:08 PM)Kaplony Wrote:  Sales go down enough and the business closes.

Yep, the business just sits on its butt as says "welp, we're screwed. It's over boys. Nothing we can do."

Definitely couldn't try to survive, by ... you know ... selling something else. Nope, never work.

I feel sure the folks at Coca-Cola have done the research and determined that there isn't much of a market for kale smoothies outside of the immediate areas of ultra-leftist universities.

(01-13-2017 02:11 PM)MplsBison Wrote:  Ah, you're right.

I could see his response coming from two different ways:
- he wanted them to keep the price of soda the same, and just pay the tax out of their own pocket, so he's mad that they're trying to maintain profit levels
- he wanted to get a large tax revenue from this, so he's mad that the price is too high and will curb consumption too much

Yes, but either way it shows that he doesn't understand basic economics. Lots of otherwise smart people don't.

(01-13-2017 02:16 PM)MplsBison Wrote:  Don't think it would necessarily matter to the consumer, but I'd rather force PepsiCo to pay the money out of their own pocket directly, than just cause the price increase to happen at the last step (essentially just a higher markup from the wholesale price that the gas station pays to PepsiCo for the product).

Pepsi wouldn't pay it out of its own pocket.

Pepsi would charge $100 rather than $50 for a tank of their syrup... collect the money from the wholesaler, earn interest on that cash and then pay the tax when it comes due. They'd actually make money, given the quantities that a company like pepsi would be collecting.

Why would you make the wholesaler pay more for something upfront... and let Pepsi earn SOME interest on that money... helping Pepsi and hurting the wholesaler... or retailer... and being indifferent to the consumer?

(01-13-2017 02:29 PM)MplsBison Wrote:  

(01-13-2017 02:25 PM)Bull_Is_Back Wrote:  pepsi would add the tax right back into the price

Pepsi doesn't sell directly to consumers. They have wholesale agreements for X amount of product at Y price with ... well everyone you can think of. Walmart, Target, Walgreens, 7-11, [Vending Machine Company], etc etc etc

So if you directly taxed/fined the corp, I don't think they can just jack up the wholesale price agreements.

You think wrong.

Unless they have someone as ignorant as you are about economics negotiating said contracts and they do not get provisions to increase prices as costs demand.

(01-13-2017 02:29 PM)MplsBison Wrote:  So if you directly taxed/fined the corp, I don't think they can just jack up the wholesale price agreements.

The price of the commodity in the agreement would be independent from the tax on it... See cigarettes, liquor and gasoline.

You can't fine a corporation for engaging in legal commerce.

(01-13-2017 02:32 PM)Hambone10 Wrote:  Pepsi would charge $100 rather than $50 for a tank of their syrup... collect the money from the wholesaler

They can't, though. At least not instantaneously.

These things are done via pre-agreed prices, stipulated in contracts. It's not like buying stocks.

(01-13-2017 02:29 PM)MplsBison Wrote:  

(01-13-2017 02:25 PM)Bull_Is_Back Wrote:  pepsi would add the tax right back into the price

Pepsi doesn't sell directly to consumers. They have wholesale agreements for X amount of product at Y price with ... well everyone you can think of. Walmart, Target, Walgreens, 7-11, [Vending Machine Company], etc etc etc

And any tax you apply will be built into *that* price..

Quote:So if you directly taxed/fined the corp, I don't think they can just jack up the wholesale price agreements.

Why the hell not? Have you ever read a wholesale agreement? These things are built by lawyers on both sides who's job it is to protect their interest. The wholesale agreements I have read all break out expenses into classes and have terms to adjust based on things like government action.

Typically these agreements are 10-18 months. A law passed today takes some time to go into effect. So you *might* milk producers for a few months but in the end the few contracts that don't have clauses to handle thing will simply jack up the price this time next year.

Or, even worse, Pepsi will lose the contract to a producer in another country. And then a number of Americans loses their job.

(01-13-2017 02:34 PM)Hambone10 Wrote:  The price of the commodity in the agreement would be independent from the tax on it... See cigarettes, liquor and gasoline.

You can't fine a corporation for engaging in legal commerce.

Sue them. The California AG, for instance, can sue PepsiCo, CocaCola, Cargill, etc. for poisoning the people of Calif.

Get a judgment of 11.7 Billion (I just made that number up).


They wouldn't be able to just perfectly recoup all losses the next day by increasing all prices exactly. It doesn't work like that.

Not saying they wouldn't eventually try to make the money back, but they'd feel some pain. Some is better than none.