Net neutrality non-neutrality



  • @Dreikin said in Net neutrality non-neutrality:

    So, uh, what does everyone here think net neutrality is?

    Net neutrality force ISPs to send a balanced number of 1s and 0s trough their wires.



  • @Dreikin said in Net neutrality non-neutrality:

    So, uh, what does everyone here think net neutrality is? I've seen it put in a few different ways, implicitly and explicitly, here and I'm wondering if people are talking about slightly (or majorly) different things.

    I second this. I don't really get what exactly the deal is.



  • @Dreikin @djls45 Net Neutrality = ISPs cannot charge more or less depending on what the data is or where the data is going or coming from.



  • @djls45 @Dreikin

    What I understand the Net Neutrality principle to be is that no (legal) traffic of a given type should have any different shaping or throttling rules (packet handling policies) applied to it than any other traffic of the same type, regardless of source. If an ISP is going to deprioritize a streaming radio service like Pandora, it would need to apply the same rule to all other streaming radio services.

    The original post, linking to the FCC's proposed reversal of classifying ISPs as common carriers, is about undoing the FCC's 2015 decision which declared that Internet Service was a Title II service (and thus subject to FCC rules including potential Net Neutrality regulations), despite Congress specifically passing legislation that classified Internet Service as a Title I service and thus not subject to FCC regulation.

    I'm kind of ambivalent toward the "pure" concept of NN. On the one hand, it makes a lot of sense on the face of it - preventing an ISP from blocking Netflix to their cord cutting customers and thus forcing the customer to buy the ISP's more expensive cable TV service is a good idea, but the whole concept has been sold on a false premise (Comcast and Verizon weren't blocking or throttling Netflix, they were acting in accordance with standard industry practices for interconnection and Netflix's transit provider was trying to get a sweetheart deal in contravention of those rules, using Netflix traffic as leverage).

    I'm very opposed to classifying Internet Service as a Title II service. Under Title II, the FCC gains the right to specifically tell ISPs "you must allow anyone who wants to to come in and resell service using your Fiber Optic lines to your customers, and you can only charge them a set wholesale rate based on the formula we set and control." And several other really crippling regulations that basically turn the principle of innovation on its head -- instead of ISPs pressing forward with any technological or innovative improvement that makes business sense, they have to have explicit government permission first.

    To be fair and complete - the FCC's 2015 reclassification indicated that the FCC would "voluntarily forbear" enforcing the CLEC provisions of requiring ISPs to wholesale their infrastructure to direct competitors, and several of the other provisions that turn innovation into "Government May I?", but as Trump's first 100 days shows - something one Executive Branch agency does under one president can easily be removed under a future president / agency leader -- if the Title II classification stands, it's not hard at all to imagine the FCC deciding that they don't want to continue their forbearance policy in the near future.



  • @izzion said in Net neutrality non-neutrality:

    (Comcast and Verizon weren't blocking or throttling Netflix, they were acting in accordance with standard industry practices for interconnection and Netflix's transit provider was trying to get a sweetheart deal in contravention of those rules, using Netflix traffic as leverage).

    If they didn't have their own service and they had competition, it would be in their interest to link with Netflix. Who wants an ISP that suck at streaming? They would be out of the market without it.



  • I'm torn on the issue, so I'd hedge: NN is reasonable if there's no competition among ISPs and the cost of entry is high. Since monopolies also stifle innovation, nothing is really lost with NN in that case. If you have a more open market, however, with competing offers from different ISPs, then you wouldn't need special rules, since a better service would be a competitive advantage that would encourage innovation and you want to preserve it.

    So I'm for NN in monopoly markets, and against it in competitive markets.


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    @izzion said in Net neutrality non-neutrality:

    I'm kind of ambivalent toward the "pure" concept of NN. On the one hand, it makes a lot of sense on the face of it - preventing an ISP from blocking Netflix to their cord cutting customers and thus forcing the customer to buy the ISP's more expensive cable TV service is a good idea, but the whole concept has been sold on a false premise (Comcast and Verizon weren't blocking or throttling Netflix, they were acting in accordance with standard industry practices for interconnection and Netflix's transit provider was trying to get a sweetheart deal in contravention of those rules, using Netflix traffic as leverage).

    Oh, not this crap again. :rolleyes:

    We've been over this before. Net Neutrality has nothing to do with Netflix. The concept was around for years and years before ISPs started to throttle Netflix; it started with AT&T (:pendant:ically not exactly AT&T, but close enough for the purposes of this discussion) attempting to mess with Google traffic for the express purpose of collecting tolls from Google, and pretty much everyone else saying "no, you don't get to do that."

    And yes, Comcast and Verizon were exactly throttling Netflix, in a blatant, sleazy attempt to get paid twice. Arguments to the contrary are based on a highly disingenuous conflation of backbone Internet transit and residential ("last-mile") Internet transit. And we have been over all this before. Please stop repeating long-debunked lies about it.



  • @magnusmaster said in Net neutrality non-neutrality:

    Fuck corporations trying to turn Internet into cable. The worst thing is that once they get their way in USA, they will impose it to the rest of the world as usual.

    Who has done this?

    @wharrgarbl said in Net neutrality non-neutrality:

    I pay $60 to my ISP, so what's your point?

    That there are more costs than just bandwidth.

    @izzion said in Net neutrality non-neutrality:

    There just isn't a magic 20% profit margin sitting around in ISP work.

    People don't get that, just because they see big profit numbers, doesn't mean they have big profit margins.

    @izzion said in Net neutrality non-neutrality:

    I'm very opposed to classifying Internet Service as a Title II service. Under Title II, the FCC gains the right to specifically tell ISPs "you must allow anyone who wants to to come in and resell service using your Fiber Optic lines to your customers, and you can only charge them a set wholesale rate based on the formula we set and control." And several other really crippling regulations that basically turn the principle of innovation on its head -- instead of ISPs pressing forward with any technological or innovative improvement that makes business sense, they have to have explicit government permission first.

    And NONE OF THIS means they can't charge for fast lanes, which is what people were pissed about.

    It just means they have to make the speed lanes into a public offer.

    I read the Title II stuff, and the politicians saying it prevents fast lanes are full of shit.



  • @LB_ said in Net neutrality non-neutrality:

    @Dreikin @djls45 Net Neutrality = ISPs cannot charge more or less depending on what the data is or where the data is going or coming from.

    Not how it currently is.

    Currently they can't charge more or less based on a private company to company deal. They can't hold a specific content provider hostage and demand money.

    They can still charge different prices, but it has to be a public offering.

    If it were a toll road, they can't stop Walmart trucks and tell them they have to pay more because Walmart puts the most trucks on the road, but they can charge more toll for 18-wheelers.



  • @Erufael said in Net neutrality non-neutrality:

    With $15/GB for every GB over the limit

    If you go over by 1 gigabyte, it's $15/GB, but if you go over by two, it's $30/GB?!


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    @izzion said in Net neutrality non-neutrality:

    I'm kind of ambivalent toward the "pure" concept of NN. On the one hand, it makes a lot of sense on the face of it - preventing an ISP from blocking Netflix to their cord cutting customers and thus forcing the customer to buy the ISP's more expensive cable TV service is a good idea, but the whole concept has been sold on a false premise (Comcast and Verizon weren't blocking or throttling Netflix, they were acting in accordance with standard industry practices for interconnection and Netflix's transit provider was trying to get a sweetheart deal in contravention of those rules, using Netflix traffic as leverage).

    The key is that there shouldn't be either differential bandwidth control or pricing depending on who the parties are that are communicating (assuming at least one of the parties is a customer at all). There might be differential QoS tiers available if so negotiated or that affects a specific type of traffic, but that should be applied without regard for the identity of the parties: if you're going to throttle P2P, you should throttle it for all, and if you're going to offer a way for some party to get better service, it should be available to any organisation that wishes to pay the RAND fee.

    I'm very opposed to classifying Internet Service as a Title II service.

    AIUI, that's needed in some parts of the country due to local monopolies, especially where there is collusion between that monopoly and the local government to prevent the entrance of new competitors (e.g., by prohibition of erection of new cables above ground or laying new trenches to put them in that way). Where there's such a situation, it's necessary for higher levels of government to regulate the monopoly as such and take steps to prevent the worst of abuses from the perspective of end customers.

    More competition would be better, of course, but there's a difference between hoping for the abstract best and assuming that just wishing for it makes it happen automatically. We have regulation because it's better overall to restrict some freedoms a bit more to ensure that other freedoms are better upheld.


  • ♿ (Parody)

    @Dreikin said in Net neutrality non-neutrality:

    I know businesses pay taxes, and they can be pretty substantial.

    The taxes are paid by their customers.


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    @boomzilla said in Net neutrality non-neutrality:

    @Dreikin said in Net neutrality non-neutrality:

    I know businesses pay taxes, and they can be pretty substantial.

    The taxes are paid by their customers.

    That's an oversimplification. Most taxes have to be paid by businesses whether they have customers or not. Sales tax is a notable exception.



  • @asdf Also, the proportion of taxes a customer bears depends entirely on the elasticities of supply and demand. For example, when demand is elastic and supply is inelastic, the customer will bear virtually none of the tax and it will come out of the producer's profit.

    (Hint: when demand is elastic, the producer will lose revenue by raising prices. So they don't, despite facing a tax.)


  • ♿ (Parody)

    @asdf said in Net neutrality non-neutrality:

    That's an oversimplification

    No, it's the truth.

    @asdf said in Net neutrality non-neutrality:

    Most taxes have to be paid by businesses whether they have customers or not. Sales tax is a notable exception.

    OK, I'll grant you a single pedantic dickweed exception for a startup that hasn't sold stuff yet and is still surviving off of invested capital, but a going concern is going to pass along the cost of taxes to its customers. Because that's where the money comes from.


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    @boomzilla said in Net neutrality non-neutrality:

    @asdf said in Net neutrality non-neutrality:

    That's an oversimplification

    No, it's the truth.

    By the same logic, I could go one step further and claim that the businesses do, in fact, pay those taxes themselves because they pay the salaries that people need to be able to afford buying goods. See how that line of reasoning quickly becomes utterly ridiculous?


  • ♿ (Parody)

    @asdf said in Net neutrality non-neutrality:

    See how that line of reasoning quickly becomes utterly ridiculous?

    No, it's not as ridiculous as you seem to believe. It just has a step of indirection there. You're stumbling towards understanding some of the pressures that cause inflation and the difference between money and wealth.

    Imagine that the increased expense came from having to pay employees more money instead of taxes. Are you going to say that the customers aren't paying the salaries?

    If you rent your dwelling you're paying the money that goes to pay the owner's property taxes. He's going to charge a rent that pays for those taxes in addition to his other expenses, hopefully plus some profit.

    The money to pay the taxes doesn't magically appear. It comes from the customers. I'm not sure what's so difficult to understand about that. I'm just pointing out that "you" can't get a free ride from businesses paying taxes because those are going to affect their customers and the amount they pay.


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    @boomzilla said in Net neutrality non-neutrality:

    You're stumbling towards understanding some of the pressures that cause inflation and the difference between money and wealth.

    That's incredibly arrogant and ironic, given that you were the one who made oversimplifying, incorrect statements. Thank you for the mansplaining, but I'm perfectly capable of understanding our economic system all by myself.

    Taxes on companies can affect either their profit margin or their prices, and that in turn can greatly affect demand. But you act like taxes on companies translate into increased prices (and increased expenses) for consumers 1:1, which is a gross oversimplification and therefore incorrect.


  • ♿ (Parody)

    @asdf said in Net neutrality non-neutrality:

    But you act like taxes on companies translate into increased prices (and increased expenses) for consumers 1:1, which is a gross oversimplification and therefore incorrect.

    Nothing I said was wrong or over simple (with the :pendant: sort of exception already noted). But perhaps you can explain then, how the companies pay the taxes if they aren't getting the money from their customers?


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    @boomzilla said in Net neutrality non-neutrality:

    But perhaps you can explain then, how the companies pay the taxes if they aren't getting the money from their customers?

    Yeah, continue ignoring what @Captain said and putting words in my mouth. Due to the fact that money circulates, everything's the same anyway, right?


  • ♿ (Parody)

    @asdf said in Net neutrality non-neutrality:

    Yeah, continue ignoring what @Captain said and putting words in my mouth.

    Not even a little bit, but you seem to not be paying attention to what I'm saying.


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    @boomzilla I think it's exactly the other way around, which is why continuing this discussion seems pointless.


  • ♿ (Parody)

    @asdf Yes, probably, until you are willing to answer this question:

    @boomzilla said in Net neutrality non-neutrality:

    But perhaps you can explain then, how the companies pay the taxes if they aren't getting the money from their customers?


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    @boomzilla Depending on the market situation, the company may not be able to raise prices and pay the additional tax out of their former profits.

    Also, demand may adjust accordingly, or the company may adjust its business practices to avoid the tax (which is occasionally the whole point) so that the end result is not equivalent to a tax on consumers. Therefore, suggesting that taxing companies is the same as taxing consumers (which you like to do) is intellectually dishonest, and you know it.


  • ♿ (Parody)

    @asdf said in Net neutrality non-neutrality:

    Depending on the market situation, the company may not be able to raise prices and pay the additional tax out of their former profits.

    So...this is you admitting that I was right? Or did those "former profits" come from some source other than customers? I did address a situation of using accumulated capital to pay a bill.

    @asdf said in Net neutrality non-neutrality:

    Also, demand may adjust accordingly, or the company may adjust its business practices to avoid the tax

    Well, sure, in that case no one is paying the tax. I certainly wasn't addressing such a situation.

    @asdf said in Net neutrality non-neutrality:

    Therefore, suggesting that taxing companies is the same as taxing consumers (which you like to do) is intellectually dishonest, and you know it.

    Don't be illiterate. I didn't say that the customers were being taxed. Just that they were paying the money. Just like they pay for the cost of goods sold.


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    @boomzilla said in Net neutrality non-neutrality:

    Don't be illiterate. I didn't say that the customers were being taxed. Just that they were paying the money.

    So… What is your point, exactly? Why do you feel such an obvious fact is worth mentioning if it wasn't to suggest what I thought you were suggesting?

    The money a company gets comes (mostly) from it's customers, and their money comes (mostly) from their respective employers. Well, duh.


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    @asdf said in Net neutrality non-neutrality:

    mansplaining

    -1 For SJW verbal attack.


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    @M_Adams said in Net neutrality non-neutrality:

    @asdf said in Net neutrality non-neutrality:

    mansplaining

    -1 For SJW verbal attack.

    Your irony detector seems to be defective. You should have that checked.


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    Status: Mildly amused 🙂


  • ♿ (Parody)

    @asdf said in Net neutrality non-neutrality:

    So… What is your point, exactly? Why do you feel such an obvious fact is worth mentioning if it wasn't to suggest what I thought you were suggesting?

    Is it really so obvious when you spend several posts denying it?


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    @boomzilla What @asdf is saying is that, while it is :pendant:ically correct that taxes are paid out of revenue, which does come from customers, a company's budget is complex enough that a change in taxes will not necessarily automatically result in a proportional change in prices charged to the customer, which is what you seemed to be implying.



  • @boomzilla said in Net neutrality non-neutrality:

    The money to pay the taxes doesn't magically appear. It comes from the customers. I'm not sure what's so difficult to understand about that. I'm just pointing out that "you" can't get a free ride from businesses paying taxes because those are going to affect their customers and the amount they pay.

    In as far as every expense a business has is paid by the customers, yeah. But the bit "those are going to affect their customers and the amount they pay" is wrong in general.

    A business is going to try to maximize its revenue, by setting the price where the equation (units sold x price) results in the highest possible revenue. This equation is independent of the company's costs, except where the unit cost sets a minimum value (if you lose money on each unit, you're not going to go far).

    A tax on a business's profits (revenue - costs) would not impact the retail price at all. If the company moved the price from what it believed was the optimum, it would only lose revenue, meaning less profit. This tax can't be passed on to consumers, because the consumers are already being charged as much as it's possible to charge them, else the business is being "generous" and giving money away.

    Since the customers receive the same product at the same price whether the profit tax is there or not, it's reasonable to say that the business is the one paying the tax, even if the money they pay those taxes with comes from the customers.

    There are other taxes that have more of an influence on prices though. Sales tax for example has a more complex effect on price structure. Both customers and business lose out with it (business end up with a smaller market, meaning lower profits, customers with more expensive products).



  • @asdf said in Net neutrality non-neutrality:

    But you act like taxes on companies translate into increased prices (and increased expenses) for consumers 1:1, which is a gross oversimplification and therefore incorrect.

    In principle, the customers pay the taxes. Whether that translates to dollars on the bill, or lower service, or less improvement in service, it goes somewhere.

    Same thing with raising minimum wage. It all goes somewhere. We argue about whether it means less jobs or higher prices or businesses closing, when it really means a little bit of everything. The increased cost is absorbed somehow. Maybe it means the company opens less locations, which means less jobs in the future. Maybe it means they invest less. The BEST case scenario is that the shareholders take less, but that may mean the shareholders sell the stock and we see a double hit.



  • @Kian said in Net neutrality non-neutrality:

    But the bit "those are going to affect their customers and the amount they pay" is wrong in general.

    No. It will affect their customers, somehow.

    @Kian said in Net neutrality non-neutrality:

    except where the unit cost sets a minimum value (if you lose money on each unit, you're not going to go far).

    You can't overlook this.

    If the business closes, then it affected their customers.

    @Kian said in Net neutrality non-neutrality:

    This tax can't be passed on to consumers

    If every business in the market is taxed at the same time, yes they can raise prices.


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    @xaade said in Net neutrality non-neutrality:

    Same thing with raising minimum wage.

    Let me stop you right there. More money for the consumers also means that they spend that additional money somewhere (and that the currency is potentially devalued a bit), effects which you are completely ignoring.

    The fact that money circulates more or less endlessly in an economy is exactly why it isn't as simple as you and @boomzilla try to make it seem.



  • @Kian said in Net neutrality non-neutrality:

    A business is going to try to maximize its revenue, by setting the price where the equation (units sold x price) results in the highest possible revenue.

    And part of that is competition. You can't rule that out.

    If I want a cookie, and I'm willing to pay $1 for it, but two places are charging 50c. I pay 50c. If a 100% tax is added, I'll pay one of them $1. There's more to prices than supply and demand in a vacuum of two entities.

    @xaade said in Net neutrality non-neutrality:

    No. It will affect their customers, somehow.

    I don't understand how I'm being downvoted here.

    There WILL be an effect to the customers. It may not be negative enough to counter the benefit of the tax, but it will happen.

    @asdf said in Net neutrality non-neutrality:

    More money for the consumers also means that they spend that additional money somewhere (and that the currency is potentially devalued a bit), effects which you are completely ignoring.

    Not really.

    Not EVERY consumer gets more money. It won't help a business paying their employees minimum wage, but selling sports cars.

    And, reality is more telling than head-speculating and theorizing. Reality pans out that there are a variety of effects, which include stores closing.

    You can't just look at the whole thing and say negatives things don't happen because the average is a net gain.



  • @asdf said in Net neutrality non-neutrality:

    The fact that money circulates more or less endlessly in an economy is exactly why it isn't as simple as you and @boomzilla try to make it seem.

    And what you're really saying is that prices go up with minimum wage, but the customers spend the increased money they have.

    Which means that it's all head games and there's little to no improvement for the low earners.

    In the end, it really just takes money from the middle class and gives the poor the illusion that they have benefitted.



  • @xaade said in Net neutrality non-neutrality:

    @asdf said in Net neutrality non-neutrality:

    The fact that money circulates more or less endlessly in an economy is exactly why it isn't as simple as you and @boomzilla try to make it seem.

    And what you're really saying is that prices go up with minimum wage, but the customers spend the increased money they have

    Not to mention that raising all the prices is effectively stealing from people who have savings they're living off of (retirees) or are living on fixed incomes that don't get adjusted by the minimum wage increase (or the economy-wide inflation caused by government deficit spending / money printing, etc etc)



  • @izzion said in Net neutrality non-neutrality:

    Not to mention that raising all the prices is effectively stealing from people who have savings they're living off of (retirees) or are living on fixed incomes that don't get adjusted by the minimum wage increase (or the economy-wide inflation caused by government deficit spending / money printing, etc etc)

    Yeah, all the firefighters being paid $14 an hour, are now minimum wage, but we promise it won't affect prices...



  • @xaade said in Net neutrality non-neutrality:

    You can't overlook this.
    If the business closes, then it affected their customers.

    In the part you quoted, I was talking about a profit tax. A profit tax doesn't modify the cost per unit, so I'm not overlooking it. I'm saying it's invisible to the customer.

    A business won't generally close due to a profit tax (unless investors decide that the margin they're making on the otherwise healthy business isn't enough and sell all the assets I suppose). Because the tax is proportional to the profit, not to the number or price of units sold. So the business can act just as it would if there was no tax, and the consequence is lowered profits, not additional costs.

    A separate matter is how you calculate profits for a business. The simplest measure would be when the business pays dividends to shareholders. If the business is paying dividends, whether that money goes wholly to the shareholders or the government takes a bite is invisible to the running of the business.



  • @xaade said in Net neutrality non-neutrality:

    If I want a cookie, and I'm willing to pay $1 for it, but two places are charging 50c. I pay 50c. If a 100% tax is added, I'll pay one of them $1. There's more to prices than supply and demand in a vacuum of two entities.

    To reiterate, I was making the case that profit taxes don't affect sale price. If two places are selling at 50c, they'll continue to operate just as they did before. If they were selling a thousand cookies a month, so a revenue of $500, and their costs were $300, then the'd have a profit of $200, and a say, 35% tax on that (assuming a high bracket) would come out to $75 in taxes for the business.

    If they instead had $400 in costs, meaning $100 in profit, they'd instead pay $35. In either case, modifying their sale price would lead to lower profits, so they would have no reason to attempt it.



  • @Kian but consumers (or the economy in general) will notice when the rate of business formation drops like a rock. Where before you may need a X% profit margin to account for risk and volatility, now you need a (X * (1+t))% margin to account for the tax. This reduces the number of viable businesses and makes them more likely to fail, as one bad year can wipe them out much more easily since capital accumulation is harder.

    Taxes by their nature are distortionary. How much depends on the tax, but all taxes produce dead weight loss. Is it with it? At some level yes (courts are a good thing) but at some other level no.



  • @Kian
    The underlying assumption with that expectation is that business owners are willing to work (in the case of a small / privately owned business) or loan their money to the business (in the case of a large corporation) for free -- profits are the money that the business owner makes in exchange for allowing the business to function.

    So, there is a point where taxing profits means the business has to raise prices to satisfy the profitability requirements of the owners, or close down because they aren't making enough money to justify their existence.



  • @Benjamin-Hall oh, and I forgot to mention that such a tax hurts entrenched businesses less than new ones, since they have more pre tax capital accumulated. Thus it's anticompetitive as are many regulatory actions. The big guys can spread the cost over a wider base.



  • @xaade said in Net neutrality non-neutrality:

    It won't help a business paying their employees minimum wage, but selling sports cars.

    The owner of the company that sell cheap stuff for minimal wagers may change cars more frequently and benefit him.

    All workers making peanuts is what will make the sports car maker go out of business. It's a negative feedback spiral to hell.



  • @Kian said in Net neutrality non-neutrality:

    A separate matter is how you calculate profits for a business. The simplest measure would be when the business pays dividends to shareholders. If the business is paying dividends, whether that money goes wholly to the shareholders or the government takes a bite is invisible to the running of the business.

    In theory.

    @Kian said in Net neutrality non-neutrality:

    (unless investors decide that the margin they're making on the otherwise healthy business isn't enough and sell all the assets I suppose).

    But this happens.

    Or the business doesn't generate enough profit for the owner.

    Locations close. Jobs are cut.

    You're acting like they can't respond by attempting to lower costs.



  • @Benjamin-Hall said in Net neutrality non-neutrality:

    but consumers (or the economy in general) will notice when the rate of business formation drops like a rock.

    Unlikely that it would drop like a rock, since people who have saved up capital have to invest it somewhere or get 0 interest, and interests on lonas would drop if there are fewer people opening businesses, which is itself an incentive to open a business. And some of the issues you mention could be worked around through changes in implementation, like say, new businesses are exempt for a certain number of years to give new guys a competitive edge, etc.

    @Benjamin-Hall said in Net neutrality non-neutrality:

    Taxes by their nature are distortionary. How much depends on the tax, but all taxes produce dead weight loss. Is it with it? At some level yes (courts are a good thing) but at some other level no.

    Obviously, an efficient government is better than a wasteful government, and an efficient government will require fewer taxes. Lower taxes are better than higher taxes. But of all the forms of taxing available, taxing profits (which is really just an income tax on the business owners, to go with the income tax on the workers) is the least bad. It at least places the brunt of maintaining the government on the people and organizations benefiting the most from the existence of the government.

    @izzion said in Net neutrality non-neutrality:

    So, there is a point where taxing profits means the business has to raise prices to satisfy the profitability requirements of the owners, or close down because they aren't making enough money to justify their existence.

    The only option in your example would be close down, because rising prices won't raise profits. If raising prices raised profits, they should have done it already. True, someone may choose to sell off their company if a profit tax lowers the return on their capital below a certain threshold. The question then is, who are they selling it too? You can't just magically liquidate your assets. If a company is making a profit, however slim, it is necessarily worth more as a company than as a bunch of disparate assets (it can't be worth less, since whoever buys the company could themselves sell it as disparate assets). So you'd be either selling it to someone who is willing to have that lower return on their capital, in which case all that happened is that the name of the owner changed, or the owner will take a loss by selling the company piecemeal to a bunch of different people. It'd be akin to declaring bankruptcy on a healthy company, a very strange decision to make.



  • @xaade said in Net neutrality non-neutrality:

    You're acting like they can't respond by attempting to lower costs.

    I'm saying that they can only keep doing what they were doing, because if they could do better, they would have done better already. You don't decide to be a more successful company when you suddenly get taxed. If you could lower costs, why hadn't you done it already? If you can raise revenue, why hadn't you done it already? You're either making all the profit you can already, or you were giving money away before the government decided to tax you.



  • @Kian said in Net neutrality non-neutrality:

    A profit tax doesn't modify the cost per unit, so I'm not overlooking it. I'm saying it's invisible to the customer.
    ...
    Because the tax is proportional to the profit, not to the number or price of units sold.

    But profit is directly proportional to the number and price of units sold. So a tax that is proportional to profit is also proportional to number and price of units sold.

    So the business can act just as it would if there was no tax, and the consequence is lowered profits, not additional costs.

    A tax on profits reduces their profit margin, so to keep their margin, they'll increase their prices enough to cover the additional tax burden.

    If it's taken out of dividends, the business will increase revenues in order to maintain the dividend payout that their shareholders demand.

    So the business can act just as it would if there was no tax, and the consequence is lowered profits, not additional costs.

    Those are both a decrease in revenues, which is all that the business cares about.



  • @djls45 said in Net neutrality non-neutrality:

    But profit is directly proportional to the number and price of units sold. So a tax that is proportional to profit is also proportional to number and price of units sold.

    This is provably, mathematically wrong. Let's use the example from above. You sell a thousand cookies a month at 50c a unit. If profit was proportional to revenue, you could calculate it as revenue times a certain constant.

    However, that does not happen. If this business has fixed costs for $200 and marginal costs for $100, it will have a profit of $200. Doubling the units sold would result in fixed costs staying fixed at $200, but marginal costs growing to $200,. Revenue went from $500 to $1000, so profit went from $200 to $600. So revenue doubled, but profits tripled. Thus, they're not proportional. QED.

    @djls45 said in Net neutrality non-neutrality:

    A tax on profits reduces their profit margin, so to keep their margin, they'll increase their prices enough to cover the additional tax burden.

    I've gone over this already. If you knew that raising prices would increase your revenue, YOU WOULD HAVE DONE IT ALREADY. You are either operating at what you believe to be market equilibrium, or you are giving money away. If you move away from what you believe to be market equilibrium, you are choosing to lose money. This is the very basics supply and demand.

    @djls45 said in Net neutrality non-neutrality:

    Those are both a decrease in revenues, which is all that the business cares about.

    No. Revenue is how much money enters the business. Typically units sold times unit price. Cost is how much money is spent in the operation of the business. Profit is revenue minus cost. A profit tax that is proportional to profit, while technically a cost, has to be computed after computing profits, so it's a sort of second order cost.


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