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Let’s imagine you’re buying a new car (and we’ll have to imagine, because no one can afford one right now). In most states you pay sales tax—some states charge a luxury tax as well. On average, only 94 percent of the dollars you spend will actually go toward the car, with the remainder paid to the government. Mind you, you won’t be able to drive the car anywhere until you pay the government a further fee to register it.
And of course, the dealer has marked up the car over his wholesale cost so he can make money. Don’t be fooled when you see that a typical markup is between 2 percent and 5 percent—that’s the markup over the suggested retail price , not the dealer cost. The actual markup may be 25-45 percent over the manufacturer’s price.
The markup is so substantial because the dealer’s operating costs eat up most of his profit: Among other things, he has to pay a 21 percent corporate income tax on everything he earns. He also had to pay sales tax when he bought the car from the manufacturer. If he leases the dealership building, the price of his lease includes the property tax paid by the building’s owner. The cost of his employees includes the benefits he is required to give them, and it also includes the income tax his employees will pay—since their real salaries are only what’s left after they pay their taxes. All these costs are passed onto the consumer. Some of the costs represent real added value—the dealer helped you find the car, let you test-drive it, and warranties its quality. But about half of the markup—let’s say 15 percent of a 30 percent markup—is going to pay one or another form of taxes.
So we’re down to just over […]
They’re Trying to Shut Us Down
Over the last several months, I’ve lost count of how many times the powers-that-be have tried to shut us down. They’ve sent hackers at us, forcing us to take extreme measures on web security. They sent attorneys after us, but thankfully we’re not easily intimidated by baseless accusations or threats. They’ve even gone so far as to make physical threats. Those can actually be a bit worrisome but Remington has me covered.
For us to continue to deliver the truth that Americans need to read and hear, we ask you, our amazing audience, for financial assistance. We have a Giving Fuel page to help us pay the bills. It’s brand new so don’t be discouraged by the lack of donations there. It’s a funny reality that the fewer the donations that have been made, the less likely people are willing to donate to it. One would think this is counterintuitive, but sometimes people are skeptical because they think that perhaps there’s a reason others haven’t been donating. In our situation, we’re just getting started so please don’t be shy if you have the means to help.
Thank you and God bless!
JD Rucker