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Editorial: Consider this: Business 101
Loyce McCarterDecember 5, 2012 | 1,232 views | 2 comments
You are the owner of a business or a corporation that produces products and/or services. As the owner, how do you determine how much you will charge for these products or services?
Let’s go through this process. First, determine how much the materials cost to make the products. Add this to your cost of your “doing business” list. You need employees, so what will you be able to pay them? You want to pay them with a good living wage, but is that possible? You need a location and the cost of the building has to be added to the cost of doing business. How about vehicles? How many do you need to make the business successful? Do you buy new vehicles or try to get along with used ones?
All these things have to be considered when determining a value to your product or your services.
But how about other things: You need insurance on your building. You need insurance on the products for product liability. You carry other liability insurance for many needs, such as on your vehicles, etc. You need worker’s compensation in case of injury of an employee.
And then, you also pay taxes on a number of items. You pay property taxes either directly or through your rent. You pay taxes on your employees for Social Security and Medicare, matching the employee’s contribution. You may have to collect local, state, or federal taxes on your business, if you are a retailer business, so that may mean that you need to hire another employee to keep track of these transactions.
And, you must also consider that, if you show a profit, you will have to pay income tax on your business, so that needs to be considered in the pricing of your products and/or services.
All these things must be taken into consideration when you set your price because, if these things aren’t thought through and you don’t make a profit, you will be out of business!
And now the federal government wants to raise your taxes if you make more than $250,000. What will you do about these taxes? Will you try to absorb them into your business? Will you consider laying off an employee or two to save expenses to offset the additional taxes that will be due? How will you handle these additional taxes? Or will you have to raise your prices to stay in business?
And because of ObamaCare, you will be paying additional costs for this health “insurance” -- or paying a penalty for not providing the “service.”
As you can see, businesses don’t really pay taxes. They consider them an expense when setting their rates and/or prices. They have to consider them, or they will be out of business!
So, as the federal government tries to punish the successful business and/or corporation, they are really punishing the consumer. The business will have no other option but to raise prices to offset the new taxes -- and the customer will be paying the taxes. If not, the business will have to close its doors, and the product or service would be gone.
Had enough? If you are the customer, you are paying these taxes. Are you ready to pay even more? When you purchase an item, you probably pay a sales tax on that item but consider how much of the price is really a hidden tax? How much of every item that you buy is the price of the product and how much is taxes?
When you hear on the news that taxes are going to be raised on the “rich,” you think that doesn’t apply to you so what do you care?
As you can see, you will be paying the taxes. You will be paying additional hidden taxes on purchases, every time you shop.
Your Opinions and Comments
Equatorial Guinea, West Africa
December 9, 2012 2:25am
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Dry Tank, TX
December 5, 2012 1:50pm
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