Rethinking election outcomes for oil.

[BLA + 1,666]

10 hours ago, Ward Smith said:

They'll just adjust their currency to deal with that 10%, the solution is doubling the duty every quarter they don't comply. That will hurt enough they won't automatically cheat

Do you think Apple wants to pay a 10% duty on every iPhone.

You need to understand how "transfer pricing" works .

I don't know Apples #s but just for argument's sake.

Say it cost Apple $200 to mfg iPhone15

They sell it to Verizon $600., Who sells it to you for 800.

Normally , if mfg in U.S. $600 - 200 = $400 profit  - U.S tax rate (21%) = $316 profit.

But they avoid the $84 taxes in U.S using transfer pricing .  Apple international (domiciled in no-tax country)  sells the iPhone15 to Apple USA for $600. Apple USA MAKES NO PROFITS. The profits are made offshore in no-tax country and repatriate under new law at no tax. 

But with duty Apple pays 10% of the selling price .  This cost Apple $600 x 10% = $60.  Apples profits drop 15℅. That's a big hit.  It reality it's probably more than 15%. It's much more if the Gross Margin is less.  My example had GM at 66% . . . I think that's high.  

Apple lobbied and smoozed Trump hard to prevent him from tariffs on consumer goods. The used the excuse that Samsung a Korean company would take market share for U.S. Apple.

Apple really isn't a U.S. company .  They sell more iPhones in China than the U.S.

India had the right idea.  They told Apple they would be putting a 20% duty on imported iPhones.  Apple is building their largest new factory in India. U.S. needs to learn from them. 

Any company mfg in China and exporting to U.S. will have to rethink their mfg locations.  Many will pressure China to adjust or leave .  

It would devastate them.

Edited October 26, 2020 by BLA

[BLA + 1,666]

4 hours ago, Enthalpic said:

 

"Play fair, but we set all the rules."

Sounds like loser talk, personally I like winners.

Our country .  We make our rules.

Isn't that how it works.

By the way Trump reinstated the 10% tariff on Canadian aluminum 2 months ago.  LOL

Gonna hurt your your margins.

Canada loses. 

 

Edited October 26, 2020 by BLA

[Ward Smith + 6,615]

7 hours ago, BLA said:

Do you think Apple wants to pay a 10% duty on every iPhone.

You need to understand how "transfer pricing" works .

I don't know Apples #s but just for argument's sake.

Say it cost Apple $200 to mfg iPhone15

They sell it to Verizon $600., Who sells it to you for 800.

Normally , if mfg in U.S. $600 - 200 = $400 profit  - U.S tax rate (21%) = $316 profit.

But they avoid the $84 taxes in U.S using transfer pricing .  Apple international (domiciled in no-tax country)  sells the iPhone15 to Apple USA for $600. Apple USA MAKES NO PROFITS. The profits are made offshore in no-tax country and repatriate under new law at no tax. 

But with duty Apple pays 10% of the selling price .  This cost Apple $600 x 10% = $60.  Apples profits drop 15℅. That's a big hit.  It reality it's probably more than 15%. It's much more if the Gross Margin is less.  My example had GM at 66% . . . I think that's high.  

Apple lobbied and smoozed Trump hard to prevent him from tariffs on consumer goods. The used the excuse that Samsung a Korean company would take market share for U.S. Apple.

Apple really isn't a U.S. company .  They sell more iPhones in China than the U.S.

India had the right idea.  They told Apple they would be putting a 20% duty on imported iPhones.  Apple is building their largest new factory in India. U.S. needs to learn from them. 

Any company mfg in China and exporting to U.S. will have to rethink their mfg locations.  Many will pressure China to adjust or leave .  

It would devastate them.

Actual numbers? The "cost" to produce an iPhone in China is $6.50 so the 10% duty would literally be pennies. You're right about the transfer pricing, there are no "no tax" countries but Ireland is a "low tax" country, so they make their profit there. There's a reason Apple has a stratospheric share price. Tremendous margins and they don't pay taxes. 

[BLA + 1,666]

13 minutes ago, Ward Smith said:

Actual numbers? The "cost" to produce an iPhone in China is $6.50 so the 10% duty would literally be pennies. You're right about the transfer pricing, there are no "no tax" countries but Ireland is a "low tax" country, so they make their profit there. There's a reason Apple has a stratospheric share price. Tremendous margins and they don't pay taxes. 

$6.50 is what Foxconn received for mfg. Many dispute that. But that's not the point. 

Add up the parts, screen , processor , memory, etc, etc etc.

[Ward Smith + 6,615]

10 minutes ago, BLA said:

$6.50 is what Foxconn received for mfg. Many dispute that. But that's not the point. 

Add up the parts, screen , processor , memory, etc, etc etc.

Oh, trust me, my brother in law is a senior exec at Foxconn, that number is right on. As for the "parts", Apple sets things up so Apple subsidiaries in various countries "sell" those parts to Apple at whatever pricing minimizes their declared income. Then there's the "software" licenses, for code written here but "sourced" out of Tasmania or wherever. All sleight of hand. Unethical as hell, especially when you see Apple employees complain about Trump's taxes. Not to worry, facebook, amazon, twitter, alphabet, they're all doing the exact same things and paying next to nothing while they scold you about not carrying the load and not caring for grandma, "She needs your taxes, slave!"

[SUZNV + 1,197]

I don't know much about Apple cost, but currently many manufacturers in China get  their wages reduced maybe more than 20%, if the suppliers for Apple parts are inside China and are doing that, wouldn't it offset the duty because the costs for iPhone reduce? Assume labor cost is not negligible  because that's why they outsourced to China in the first place? 

Foxconns in Wisconsin seemed troubling, must be covid19 delayed their plan and they are worrying that if Trump loses then they will have to pay more so they are waiting for the election results.  

https://madison.com/wsj/news/local/govt-and-politics/behind-the-scenes-report-details-foxconns-failure-to-live-up-to-its-promise-in-wisconsin/article_6ca83daa-020a-5021-a492-b540f2751ca4.html

This would be a biggest election to  the world in modern history. A true test for anti socialism mechanism in USA, individualism. Can't wait for the final percentages of the voters turn out and along with that the result.

Edited October 26, 2020 by SUZNV

[Jimc + 83]

On 10/25/2020 at 10:17 AM, 0R0 said:

Texas early vote split by party affiliation as of Friday

Little room for doubt who is leading.

Are pollsters ever going to look at the millions sampled in the election proper instead of the selected small representative samples and their weightings?

So far, looks like Biden's ghostly campaign rallies are reflected in the Dem turnout even in mail ins.

What is the source for this graph

[0R0 + 6,251]

https://www.realclearpolitics.com/articles/2020/10/26/no_really_--_dont_pay_attention_to_early_voting_data_144527.html

Early voting is more important this election since Dem's have called for their voters to vote by mail and early. 63% of Dems indicated they would do so. Only 36% of Reps did. Thus anything short of a similar proportion lead in early voting turnout would be underperformance. Particularly since early voting has already taken up most of the 2016 vote count level. So besides the comparison to 2016 where Biden's early voting lead is 10% vs. 13% for Clinton, FL, which polled strongly for Biden is voting (by party registration) is showing far less of a lead than a Dem win would require. The VBM lead so far is 600k in FL vs. a republican early vote advantage already at 230k the early vote so far is 2.08 vs. 2.45 mil. not 36 vs 66 kind of proportion. Dems are starting out very low.

It looks similar in the Midwest, which always swings in the same way as F in trend.

The expected voting division nationally by survey is

Dem 63% early

Rep 36% early nationally,  25% in PA.

From memory

Departures from these ratios indicate a more likely win in the direction of the difference.

Dems are below their bogey in TX, OH in a big way, FL, MI, AZ, MN, WI, NC, NV, which are closer to 4:3 vs 2:1

Dems are even with expectations in PA

https://targetearly.targetsmart.com/?view_type=State&demo=Voter Score&demo_val=Super Voter&state=FL&demo2=Registered Party

[0R0 + 6,251]

46 minutes ago, Jimc said:

What is the source for this graph

https://targetearly.targetsmart.com/?view_type=State&demo=Voter Score&demo_val=Super Voter&state=FL&demo2=Registered Party

It uses voter participation in primaries etc. to determine party affiliation since TX does not do party registrations.

[BLA + 1,666]

5 hours ago, Ward Smith said:

Actual numbers? The "cost" to produce an iPhone in China is $6.50 so the 10% duty would literally be pennies. You're right about the transfer pricing, there are no "no tax" countries but Ireland is a "low tax" country, so they make their profit there. There's a reason Apple has a stratospheric share price. Tremendous margins and they don't pay taxes. 

You don't get it.

For the sake of argument I'll agree the mfg iPhone is $6.50.

THE TRANSFER PRICE IS NOT $6.50

THE TRANSFER PRICE IS $ 600.00.  You pay the Tariff on the transfer price. To avoid U.S. corporate income taxes.  

If  the transfer price is $6.50 they would be paying 21% Corp Income Tax on $593.50 ( = $124.00)

That's literally NOT pennies.

TechInsight did a breakdown of the cost to manufacture an iPhone 11 Pro Max that list for $1099.

TechInsight's number just for the parts is $490.  The article didn't say if that is using general pricing or a is a volume discount price Apple pays. That sounds high.  My guess they pay less.  But not pennies.  

Edited October 26, 2020 by BLA

[Enthalpic + 1,496]

13 hours ago, BLA said:

By the way Trump reinstated the 10% tariff on Canadian aluminum 2 months ago.  LOL

 

Canada loses. 

 

No, he backed off on that when we threatened retaliations.

We win.

https://www.cbc.ca/news/politics/aluminum-tariffs-trade-trump-trudeau-1.5724391

 

 

 

Edited October 26, 2020 by Enthalpic

[Enthalpic + 1,496]

Trump does all the things you apparently hate, makes crap in China and avoids paying taxes.  No way would he ever support a tariff on all made in China products.  He will only ever do targeted tariffs on products him or his wife are not personally having manufactured in China. 

Make no mistake - trump puts his own interests first.

[BLA + 1,666]

6 hours ago, Enthalpic said:

No, he backed off on that when we threatened retaliations.

We win.

https://www.cbc.ca/news/politics/aluminum-tariffs-trade-trump-trudeau-1.5724391

 

 

 

Temporary reprieve .

Can't have Canada hurting Michigan and Wisconsin before the election.

Canada should pray for a Biden win. 

You should have bet me.  

Edited October 27, 2020 by BLA

[Enthalpic + 1,496]

7 minutes ago, BLA said:

Temporary reprieve .

Can't have Canada hurting Michigan and Wisconsin before the election room.

Canada should pray for a Biden win. 

You should have bet me.  

You praised trump for something that didn't happen, typical. 

Tariffs on Canadian steel or Al makes very little sense.  If the USA does it we will respond with tariffs on everything made with steel or Al, your manufacturing plants will suffer. Wasn't bringing back domestic manufacturing one of trumps campaign goals?  You should take our Al and make it into a higher value product, trying to out-compete us on a resource we can clearly make cheaper is foolish.

Obviously I don't want trump to win, but that doesn't automatically make me a huge Biden fan. If he stops some US shale it probably would make Alberta more wealthy.

 

[BLA + 1,666]

5 hours ago, Enthalpic said:

You praised trump for something that didn't happen, typical. 

Tariffs on Canadian steel or Al makes very little sense.  If the USA does it we will respond with tariffs on everything made with steel or Al, your manufacturing plants will suffer. Wasn't bringing back domestic manufacturing one of trumps campaign goals?  You should take our Al and make it into a higher value product, trying to out-compete us on a resource we can clearly make cheaper is foolish.

Obviously I don't want trump to win, but that doesn't automatically make me a huge Biden fan. If he stops some US shale it probably would make Alberta more wealthy.

 

The one thing U.S. environmentalist hate more than Shale, it's Canadian Tar Sands.  Watch what you wish for.

Especially if Biden signs-off on a carbon tax.  That would be the death knell for Oil Sands.

ALCOA has leverage with Trump. Most of their mfg is now on Canada.  

Many of the U.S.  Al smelters were in Washington State  and Oregon.  They don't want them anymore.  

Edited October 27, 2020 by BLA

[0R0 + 6,251]

Why tracking FL is overwhelmingly important for the election.

All the Midwest swings in the same direction as FL, as does NC. So if you have reason to expect an improvement of the margin for Trump in FL then you should expect a similar change in the Midwest.

So far it seems Trump will have a better margin in FL, as Trafalgar shows and early voting is indicating as Dem's margin is falling well short of expectations on mail ins vs. Rep in person voters.

[Enthalpic + 1,496]

1 hour ago, BLA said:

 

Especially silly if Biden signs in a carbon tax.  That would be the death knell for Oil Sands.

We already have carbon taxation.

[Hotone + 412]

19 hours ago, BLA said:

India had the right idea.  They told Apple they would be putting a 20% duty on imported iPhones.  Apple is building their largest new factory in India. U.S. needs to learn from them. 

Correction, it's Foxconn that is building the factories.  Apple had been struggling to penetrate the Indian market for many years.  Let's see if their new strategy will work

https://fortune.com/2020/09/05/apple-iphone-sales-india-store-brand/

Edited October 27, 2020 by Hotone

[Ward Smith + 6,615]

5 hours ago, BLA said:

You don't get it.

For the sake of argument I'll agree the mfg iPhone is $6.50.

THE TRANSFER PRICE IS NOT $6.50

THE TRANSFER PRICE IS $ 600.00.  You pay the Tariff on the transfer price. To avoid U.S. corporate income taxes.  

If  the transfer price is $6.50 they would be paying 21% Corp Income Tax on $593.50 ( = $124.00)

That's literally NOT pennies.

TechInsight did a breakdown of the cost to manufacture an iPhone 11 Pro Max that list for $1099.

TechInsight's number just for the parts is $490.  The article didn't say if that is using general pricing or a is a volume discount price Apple pays. That sounds high.  My guess they pay less.  But not pennies.  

We're talking past each other. Look at it this way, Apple Ireland "buys" the phone "almost" finished in China for $6.50 then turns around and sells it to Apple USA for $1100. Apple Ireland's profit is enormous, but then they show "charges" to other Apple subsidiaries that bites into that profit (spreading the wealth around the world to friendly tax havens). The 6.50 is an assembly charge to Foxconn in factories that employ hundreds of thousands of Chinese. They're building Millions of phones, iPads and other devices there. Nothing illegal, just doesn't pass the ethical dilemma test, but why should they care? They'll happily support Biden and 60% corporate taxes they'll never have to pay, because it keeps their competitors off balance. You could figure this all out from their financial statements if you had weeks and armies of accountants. My son is a corporate accountant/CPA doing similar things for his company. They look at how Apple does it and try to copy what they can. They specifically hired him because he's got the CPA, but he's not as bound by the AICPA rules as a public accountant like he used to work for. 

[BLA + 1,666]

15 hours ago, Enthalpic said:

We already have carbon taxation.

Right

Than put another carbon tax on top of that for every barrel of Tar Sands oil, syn crude, dilbit that crosses the border in to the U.S.  

$ Cha Ching , $ Cha Ching

Thanks 

Edited October 27, 2020 by BLA

[BLA + 1,666]

59 minutes ago, Ward Smith said:

We're talking past each other. Look at it this way, Apple Ireland "buys" the phone "almost" finished in China for $6.50 then turns around and sells it to Apple USA for $1100. Apple Ireland's profit is enormous, but then they show "charges" to other Apple subsidiaries that bites into that profit (spreading the wealth around the world to friendly tax havens). The 6.50 is an assembly charge to Foxconn in factories that employ hundreds of thousands of Chinese. They're building Millions of phones, iPads and other devices there. Nothing illegal, just doesn't pass the ethical dilemma test, but why should they care? They'll happily support Biden and 60% corporate taxes they'll never have to pay, because it keeps their competitors off balance. You could figure this all out from their financial statements if you had weeks and armies of accountants. My son is a corporate accountant/CPA doing similar things for his company. They look at how Apple does it and try to copy what they can. They specifically hired him because he's got the CPA, but he's not as bound by the AICPA rules as a public accountant like he used to work for. 

So Apple USA pays 10% duty on import price $1100. = $110 .They loose.  

If they sell it to Apple USA at the all in cost say $600 APPLE USA pays (1) 21% Corp Income Tax on $500 profit = $105 . PLUS the 10% duty on the import price $600 = $60.  $105. + $60 = $165.   They lose again.  

Cost accounting 101

Go tell Apple CEO Cook he will be paying a 10,% import duty.  Then stand back. He will go apoplectic .

Edited October 27, 2020 by BLA

[Ward Smith + 6,615]

41 minutes ago, BLA said:

So Apple USA pays 10% duty on import price $1100. = $110 .They loose.  

If they sell it to Apple USA at the all in cost say $600 APPLE USA pays (1) 21% Corp Income Tax on $500 profit = $105 . PLUS the 10% duty on the import price $600 = $60.  $105. + $60 = $165.   They lose again.  

Cost accounting 101

Go tell Apple CEO Cook he will be paying a 10,% import duty.  Then stand back. He will go apoplectic .

Are you confused? I'm not. 

Are you conflating DUTY with Taxes? I'm not. 

They can easily structure things so Apple Ireland imports the iPhone. Ireland isn't charging tariffs (means the same as duty) to China. Apple Ireland sells to Apple USA at $1100. Apple USA sells to you at $1100. They make zero profit in the US. They pay zero taxes on zero profits. Overseas they're sitting on billions of profits. Until they repatriate those profits there's no accounting "event" they owe taxes on. This is well documented in multiple places. I respect you, please don't dig this hole any deeper. 

Dude, I not only took cost accounting, I'm married to an accountant and my son is one. I've had multiple companies and done my own accounting before we got large enough to need the bigger firms. They still used the chart of accounts and methods I established. Even though I took engineering in college, I opted to take accounting as electives. I would have taken the last accounting class, but they told me that would qualify me as a double major. I already was a double major and didn't want the accounting to pigeonhole me, so I didn't take the last class (audit). I met my wife in those classes. 

 

[BLA + 1,666]

3 hours ago, Enthalpic said:

We already have carbon taxation.

When the Tar Sands started to grow the CD government passed very strict air admission Standards. 

So strict that the producers balked.  

So gov said forget the standards just pay a fee per barrel instead.

Prices dropped and the gov said don't worry about that. Just keep producing.  

[BLA + 1,666]

12 hours ago, Ward Smith said:

Are you confused? I'm not. 

Are you conflating DUTY with Taxes? I'm not. 

They can easily structure things so Apple Ireland imports the iPhone. Ireland isn't charging tariffs (means the same as duty) to China. Apple Ireland sells to Apple USA at $1100. Apple USA sells to you at $1100. They make zero profit in the US. They pay zero taxes on zero profits. Overseas they're sitting on billions of profits. Until they repatriate those profits there's no accounting "event" they owe taxes on. This is well documented in multiple places. I respect you, please don't dig this hole any deeper. 

Dude, I not only took cost accounting, I'm married to an accountant and my son is one. I've had multiple companies and done my own accounting before we got large enough to need the bigger firms. They still used the chart of accounts and methods I established. Even though I took engineering in college, I opted to take accounting as electives. I would have taken the last accounting class, but they told me that would qualify me as a double major. I already was a double major and didn't want the accounting to pigeonhole me, so I didn't take the last class (audit). I met my wife in those classes. 

 

Read my original post.  " duty on all products originating from the country in violation. .

China pulled that trick already.  They transferred product thru Vietnam or Indonesia.

It's basically algebra. You make one change to one side of the equation youust also do do on the other.  

You could put a stipulation in the duty law if you try to mask the origin of the product double the duty to 20%. 

WTO is a farce just like all the other world organisations.

It's our country.

Keep it simple.  

Flat , across the board 10% duty.

That's the beauty of a duty/fee/tariff . You can't hide from it .  

 

Edited October 27, 2020 by BLA

[Ward Smith + 6,615]

14 minutes ago, BLA said:

Read my original post.  " duty on all products originating from the country in violation. .

China pulled that trick already.  They transferred product thru Vietnam or Indonesia.

You could put a stipulation in the duty law if you try mask the origin of the product double the duty to 20%. 

It's our country.

Keep it simple.  

Flat , across the board 10% duty.

Quite old article nothing has changed!