Graham Man

PayPal is charging for Tariffs; 25% of the purchase

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58 minutes ago, mercer09 said:

Randy,

 

doubt his children perpetuated the estate very far.  15 mill is easily spent when paying taxes on all of those magnificent properties.

15 million in 1916 funds is quite a sum though and that was basically cash he left them to further his charity work in education.  They said the family didn't sell any of his holdings and his son continued to run his companies.  The impressive part is he had that castle built in a very short time and bought mainland properties including a quarry and a farm to support it.  

They said it was because of the robber barons, him getting so rich,  but really no different than catering to the Hollywood celebrities and sports stars today.  

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Drove my K car up there 7 years ago.............came out of a restaurant and some Frenchies were laughing at it.

 

My son said- hey its paid for.  then there was silence.................

 

if you enjoy taxes, go to Canada and order a dinner. you will be surprised............. not in a good way.

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I see a castle like that and think of the HVAC bill. Worked all my life and inherited little. Lost half of everything (had to buy back the house I had already paid for) but recovered. Have "enough". Trying to figure out my latest toy, an "Android" TV that has a great picture but seems brane-ded. Have a vague desire for an XLR but have not depreciated enough yet. Hit 80 here yesterday. 

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It is hard to foresee how these actions play out. The McKinley Tariff of 1890 was instrumental in the annexation of Hawaii by a force of Marines. Fifty years later Hawaii became a pint of world focus. In fact we just recognized problem resulting from that tariff and events associated with the "sugar islands" on the 7th of December.

 

There is a quote I have heard at many meetings from key decision makers. It makes me cringe: "Let's not dwell on how we got here. Our job it to move forward from today". You know you are in trouble when you hear that.

Bernie

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Powermatic woodworking machinery is up significantly due to the tariff. 

 

and how many on this board must have these tools?  I am fine with a router and chisels.

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32 minutes ago, mercer09 said:

Powermatic woodworking machinery is up significantly due to the tariff. 

 

and how many on this board must have these tools?  I am fine with a router and chisels.

 

So if it doesn't affect you personally, it doesn't matter? Wow.

 

The fact is, tariffs ARE hurting people. Farm bankruptcies are up 24% over last year. Iconic all-American companies who do build a majority of their stuff in the US, companies like Cummins, Caterpillar, and John Deere, are all reporting that they are going to have to lay people off despite selling more machinery than they did last year simply because the raw materials they need (and which aren't available here, such as aluminum) are 25% more expensive and they can't raise the prices of their consumer goods to match. 92% of all the clothing here in the US is now 25% more expensive, and I'm assuming we are all wearing clothes, regardless of whether we like old cars. Others have already mentioned electronics, but since we seem to live in the steam age around here, few of you will even notice that one.

 

It isn't that the tariffs don't affect you. It's only that they don't affect you yet. At first, many companies were absorbing the additional costs, including Wal-Mart, because they expected a quick resolution. That does not seem to be forthcoming, and they will surely not absorb those costs forever. I would prepare for some sticker shock in almost every aspect of your daily life in the coming months.

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Cleveland Cliffs and AKS Steel will supply the domestic market with domestic product.

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1 hour ago, Matt Harwood said:

92% of all the clothing here in the US is now 25% more expensive, and I'm assuming we are all wearing clothes,

 

40 years ago, here in Eastern PA, there were dozens of mills and thousands of jobs sewing clothes. There were trucking companies whose only customers were sewing mills. Any women or man who wanted to work could work. Many sales reps that supported the sewing trade lived locally as did the repairmen and every other job in the needle trades.There were even some local shoe factories.

It's all gone....... Gone overseas.......  I'm not personally aware of one mill left.

So while we are all wearing clothes I ask:  At what cost?

I'd gladly trade a 25% cost increase on clothing for a robust local economy..................Bob

Edited by Bhigdog (see edit history)
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Matt,

you do realize that farmers have been subsidized for the last 100 years????????  this is nothing new.

 

When I attended K state, 58 bushels of wheat could be pulled from an acre of land. today that number is over 200 bushels from the same acre. Farmers will always be going out of business, as long as their is Monsanto and super breeding.

 

nothing to do with tariffs that have existed for a year. do you homework.

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Lots of variables on all this. Imagine  large third generation farm getting hit with the "death tax" when gramps dies. There's a bankruptcy. And their ages make them just about due, a left field thing for the news.

 

About the best source to sort any of this out would be someone who can shoot a good game of pool and quickly pick out the constellations on a dark night, you know, plan ahead and connect the dots.

 

"Lost in time. Lost in space, leaders of the human race" paraphrased from Richard O'Brien.

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3 hours ago, rniez said:

Powermatic woodworking machinery is up significantly due to the tariff. 

So where is powermatic machinery made?  If it's domestic then they should only be paying a tariff on the materials and that shouldn't be a huge increase in price in the finished product. 

Again if you are paying 25 percent more for stuff at the counter,  then you are getting ripped by someone along the line.  Tariffs are on the wholesale exported price,  not the retail over the counter price. 

 

It's going to hurt,  but if we don't do it now,  it will never get down and our country will fold.  Atleast someone saw a need to try to change it.  It's harder to buck the system than go with the flow. 

 

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22 hours ago, auburnseeker said:

Again if you are paying 25 percent more for stuff at the counter,  then you are getting ripped by someone along the line.  Tariffs are on the wholesale exported price,  not the retail over the counter price. 

 

And that is where your math is wrong.

 

Assume typical path of goods to be sold, and every step of the way it gets marked up 100%. 

 

Manufacturer, Importer, Wholsaler, Retailer.

 

Item is sold by manufacturer for $12.50, Importer sells for $25, wholesaler sells for $50 and retailer sells for $100.

 

Now add 25% tariff to the import.

 

Item sold by manufacturer for $12.50, cost to importer now $12.50 + 25% tariff = $15.625, so he wants to keep same % profit margin and sells for $31.25, wholesaler keeps same % profit margin (ROI) and sells for $62.50, leaving the retailer to keep its stockholders happy with the same ROI and has to sell for $125.00.

 

Hmm, something special about 100% markup? No, lets say 50% markup at every stage, results same, 25% more cost to consumer.

 

Manufacturer $12.50, importer sells for $18.75, wholesaler sells for $28.13, reatailer sells for $42.19

 

Manufacturer $12.50, tax (tariff) $3.125, importer sells for $23.44, wholesaler sells for $35.16, reatailer sells for $52.73, which is 25% more than the original selling price of $42.19.

 

So YES, the consumer will pay 25% more for tarrifed goods, not some small increase!

Edited by Frank DuVal
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Then you stop buying all but the essential stuff. 

I still go back to the point that there is a make or break point in pricing or Cat as an example as was said has to find a way to absorb the price.  Raise it all you want.  A 10.00 item is a 10.00 item in many cases.  The public won't pay more.  I sell every day 30 items or more,  When the post office charges more or ebay charges more,  the customers only spend up to 10.00 inclusive.  They do not bid higher and say oh well. they stop at 3 or 4.00 so that at their door it is 10.00. Shipping goes up or now even worse the sales tax stacked on they don't say well I guess I'll pay 10.50 or 11.00 or more.  They just adjust their offer bid or purchase price down.  I either adjust accordingly or do't sell the item.  Now I have lost fees and lose money.  Just like sending your car to Mecum to sell and it comes home a non sale.  Now you have to eat the difference to sell it because your car is not going to bring more now than you were trying to get because you invested in the chance to sell it on that venue. 

 

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On 12/12/2019 at 11:43 AM, Matt Harwood said:

The fact is, tariffs ARE hurting people.

 

The absence of tariffs and this free for all trade situation we've had has hurt many people far more. It means nothing that someone's lawn chair that was 4 dollars is now 5 dollars. You're missing the point, the lawn chair can be made here and provide jobs for US workers, that pay taxes, that reinvest their earnings back in to our economy, those dollars going to China aren't doing the US economy one bit of good. It's like throwing cash in a dark hole, they get US dollars and we get junk that doesn't last until the weekend, and the deficit just keeps rising.

 

On 12/12/2019 at 11:43 AM, Matt Harwood said:

Farm bankruptcies are up 24% over last year.

 

I don't mean to ruffle any feathers, but as Mercer points out, the farmers have been subsidized for a hundred years, there are large land holders drawing compensation through "soil bank" and now "Conservation reserve" and other freebies to farmers and they haven't dropped a plow in the ground for years. Lot's of family businesses go under; where is their help? Where is it etched in stone that the taxpayers have to subsidize farming and none of them can fail? I've worked in rural areas and dealt with Farmers, some are good at, some aren't. 

 

On 12/12/2019 at 11:43 AM, Matt Harwood said:

American companies who do build a majority of their stuff in the US, companies like Cummins, Caterpillar, and John Deere, are all reporting that they are going to have to lay people off despite selling more machinery than they did last year simply because the raw materials they need (and which aren't available here, such as aluminum) are 25% more expensive and they can't raise the prices of their consumer goods to match.

 

They have no one but themselves to blame. These people were all too happy to tell US suppliers that provide US jobs and feed the US economy to take a hike and start getting their goods from China. I have no sympathy for them. They should have kept their US supply chain intact and made adjustments to their business to cut costs and remain solvent and keep their products "US MADE" and not simply US assembled. Chinese imports were an easy route to exorbitant profits. Nothing is free in life, time to pay up.

 

This whole thing has been an unsustainable situation from the get-go. That house of cards was going to fall sooner than later. I said it 30 years ago "If we are going to trade with those folks, we better learn to live like them"

 

-Ron

Edited by Locomobile (see edit history)
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1 hour ago, auburnseeker said:

I still go back to the point that there is a make or break point in pricing or Cat as an example as was said has to find a way to absorb the price.

 

That is one company who does not need to worry about pricing. You need a CAT part? Then you pay CAT prices or your CAT equipment is down and whatever it did for you is not going to get done. If that's a generator, then NOTHING gets done.....  So the consumer gets the shaft if a tariff is applied to that part. CAT stockholders will not willingly accept a lower ROI.

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1 hour ago, Frank DuVal said:

 

 

That is one company who does not need to worry about pricing. You need a CAT part? Then you pay CAT prices or your CAT equipment is down and whatever it did for you is not going to get done. If that's a generator, then NOTHING gets done.....  So the consumer gets the shaft if a tariff is applied to that part. CAT stockholders will not willingly accept a lower ROI.

Cat will adapt or someone else will move in and take their spot.   If parts become too expensive, companies will start buying other equipment.   It would be a good time for Cat to start manufacturing that part here if it's made over there if  there is going to be a tariff that jacks the price that much and maybe even,  buy the steel from US sources.  I know it's a foreign Idea to use domestic steel. (what is the difference in price between US steel and Chineese steel pre tariff sitting in Cat's yard?, would it be cheaper then to buy US steel post Tariff? )  Kind of the reason we are using tariffs to finally stop the blood bath of job loss.  Drive through how many towns/ cities in the US and see all the shuttered factories and worse yet supporting businesses, the stores and Cafes the workers used to frequent.  It's pretty depressing. Just like a drive down rte 66 to see how great we once were. 

The good part is we still have entrepreneurs  in this country,  that if they see the need will take the risk to fill the hole, as long as they feel the regulations, which have been more favorbable for Business with this administration  won't swing the wrong way and put them out of business when the Administration changes out as it eventually will.   

 

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Interesting read on how Cat is managing with the tariffs.  Doesn't seem like we are going to be paying 25 percent more for our equipment after all.  Maybe just a slight increase like every piece of equipment or car we have bought has made since the 1930's. 

I suspect others will follow the same model.  In a communist country market doesn't set the price, Gov't does,  but in a capitalistic one it does.   Just like in the depression or even into the 50's 60's with auto companies they will remain competitive or someone will put them out of business.  I doubt Cat is folding any time soon.  Sounds like they are doing a bunch of things they should have done years ago. 

Now if we could get Gov't to follow suit we might be talking. 

I also looked at prices of steel and it seems with the tariff and cost of transport, it might be in businesses best interest to start buying US steel. 

https://www.reuters.com/article/us-caterpillar-cuts/caterpillar-leans-on-old-playbook-to-cope-with-trump-tariffs-idUSKCN1M10DH

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That would work out well for me; I'm up to my neck in CLF.

 

, it might be in businesses best interest to start buying US steel. ...

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5 hours ago, auburnseeker said:

Interesting read on how Cat is managing with the tariffs.

 

Yes it is. A year old article. I see that one CAT plant now (in 2018) has 30% fewer employees due to tariffs. I thought you were for bringing jobs back to America? Ah, statistics, there are lies, damned lies and statistics!😄

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Just watched a PBS show yesterday that said more jobs were being lost to automation than to outsourcing overseas. And it will get worse as automation increases.

 

Actually the show was called AI, artificial intelligence. Seemed more about automation. AI has the potential to increase automation I suppose. You can certainly have automation without AI. Or you can incorporate AI into automation, or use AI to develop more efficient automation.....

 

https://www.pbs.org/video/age-ai-preview-m24tzj/

 

"Increased productivity through automation."

 

“I believe about 50 percent of jobs will be somewhat or extremely threatened by AI in the next 15 years or so,” says Kai-Fu Lee, who has written a book called AI Superpowers. He fears that the rise of AI will contribute to  another alarming trend: the growing inequality in earnings. “AI will exacerbate that and I think it will tear the society apart,” Kai-Fu Lee warns, “because the rich will have just too much, and those who are have-nots will have perhaps very little way of digging themselves out of the hole.”

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Developed countries will never be able to compete with non developed countries on labor, and vice versa on innovation/science/technology.

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7 hours ago, mike6024 said:

Seemed more about automation.

 

I have been involved in some level of automation and AI since 1974, still embracing the leading edges. From 50 years experience I can tell you, artificial intelligence in the hands of human intelligence will NEVER reach its full potential.

 

Poor management is the greatest problem, whether private or public.

 

Management needs to radically change its self image.

image.thumb.png.8c6c5013ed8fa62904f6163003c1f822.png

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9 hours ago, Frank DuVal said:

 

Yes it is. A year old article. I see that one CAT plant now (in 2018) has 30% fewer employees due to tariffs. I thought you were for bringing jobs back to America? Ah, statistics, there are lies, damned lies and statistics!😄

But if US steel is now competitive with foreign steel and Cat buys the US steel,  then that's more jobs created here.  So a win.  As mentioned exporting US dollars doesn't help the US economic cycle. 

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While on the subject of automation and AI, I would like to ask a question. Should there be a tax put on the Robots that are taking the work away from humans? 

 

The robots are generating the same amount of revenue for the company as the humans they replaced but they pay no income tax to the government.  That means the American worker has to make up for the lost income taxes to keep the government running and they have to do it with less good paying jobs. 

 

Please don't tell me the extra revenue the robots generate for the company is going to result in the company paying more taxes to the government.  We all know that companies don't really pay taxes. Companies just pass an increase in tax on to the consumer. The consumer (worker) is the one who actually pays the tax.

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