Councilperson Dr. Jose Moreno proposes $1 gate tax for the DLR and other venues - Failed a second time, but still very much alive.

Disney Irish

Well-Known Member
In the real world, businesses set their prices based on the price that markets will pay for the item. If they price an item too high, fewer people purchase it and they lose money. If they price an item too low, they lose money they otherwise would have made had the item had a higher price.
This I agree with, but not really relevant to the discussion of a tax added onto the sale at time of purchase.

In the real world, consumers have a fixed number of dollars that they can spend on an item. I don't get more money in my pocket when it says "sales tax not included" on the price of an item. That item does not become worth more to me than it did before I read that phrase.
Yes, but that still doesn't change the fact it wasn't factored into the price of the good being sold. The consumer is still forced to pay that tax even if the price of the good didn't actually go up if they want that good. The value of a good isn't changed one way or the other by a tax.

And the very fact that you don't get more money in your pocket as the consumer because "sales tax not included" is exactly the point that is trying to be made. The consumer will be the one paying because "sales tax not included".

When Disney sells a theme park ticket, there are certain costs that it takes to produce that ticket. For example, it costs money to staff the ticket booths or build and maintain attractions. The cost per ticket sold is less than the cost it takes to produce that ticket. So Disney makes a profit on that ticket. This is good. Given Disney's success over many decades, one assumes they are quite good and maximizing the number of sales and keeping their cost low in order to make the most money they can. If Disney prices a ticket higher than the market price, Disney will lose sales and money. A tax on ticket sales involves increasing the price of the ticket. So does Disney want to lose sales and money, or would they like to make the most money they can given their fixed costs? What does that mean for the difference between the total revenue from ticket sales and the costs to run their business?
Again this I agree with, but again not really relevant to the discussion of a tax added onto the sale at time of purchase. Disney sets the price of the good, not of the tax they are legally required to charge at the time the good is being purchased.

In the real world, companies like to make money. They don't like to lose money. The naive position IMHO is the one that believes that companies haven't liked money in the past but suddenly will start to do so in the future. It's a position that is rooted in a certain set of pro-business beliefs, and one that can be intuitive, but doesn't reflect reality. Saying "in the real world" does not mean that intuitive beliefs are correct. Intuitive beliefs are not less naive than the fundamentals of economics and business.
No one is disputing companies don't like to make money. I think that is well understand, and is not even considered a new concept. And in fact its this very sentiment which is at play here. Because companies like to make money, no company is going to pay this new tax out of their pocket. It will be added to the final price of the good being sold at time of purchase just like every other tax.
 

October82

Well-Known Member
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This I agree with, but not really relevant to the discussion of a tax added onto the sale at time of purchase.

Good, so we understand supply and demand.

Yes, but that still doesn't change the fact it wasn't factored into the price of the good being sold. The consumer is still forced to pay that tax even if the price of the good didn't actually go up if they want that good. The value of a good isn't changed one way or the other by a tax.

That's right, the value of an item is determined by the price that people in a market will pay for an item. Do consumers pay the price of an item, including tax, when they purchase that item?

And the very fact that you don't get more money in your pocket as the consumer because "sales tax not included" is exactly the point that is trying to be made. The consumer will be the one paying because "sales tax not included".

Yes, the consumer pays the price for a good or service. It seems like we agree about that. Do consumers decide what to buy based on how much profit a company will have on that item? If you go into a car dealership, do you typically spend more if the salesperson tells you that they will benefit by you paying a higher price? Or do you attempt to pay the lowest price you can for what you think the item is worth? Does it matter if the dollar in your pocket goes to the businessperson or to the state? Do you have more money in that case? Is the item worth more to you?

Again this I agree with, but again not really relevant to the discussion of a tax added onto the sale at time of purchase. Disney sets the price of the good, not of the tax they are legally required to charge at the time the good is being purchased.

True, Disney does not choose whether there is a tax. They do choose what the total price of the good is that they offer in the market. If they choose poorly, they lose money. If they choose well, they make money.

No one is disputing companies don't like to make money. I think that is well understand, and is not even considered a new concept. And in fact its this very sentiment which is at play here.

The exact position that you hold is that Disney is undervaluing tickets by selling them at their current price and should increase them to the new price regardless of whether there is a tax or not. Why wouldn't they? Under your view of decision making, Disney can set the price at a higher level with no consequences. And to support that position, you are now arguing that taxes on goods are not part of the price that consumers pay for them.

Because companies like to make money, no company is going to pay this new tax out of their pocket. It will be added to the final price of the good being sold at time of purchase just like every other tax.

A point we really haven't discussed yet is that companies don't have a "literal pocket" from which to pay or not pay from. Companies set pricing dynamically. Sometimes their profits go up, other times they go down. Operating expenses change, and sometimes tax and regulatory environments change. It's not that these things don't matter in sometimes complicated ways, but Disney won't have a choice whether to pay their taxes, and them paying their taxes doesn't a priori mean that you are paying more than you otherwise would have.

Unless, of course, as you seem to think, consumers don't actually care how much they pay for an item. Maybe that's true for you, but it's not true for me.
 
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Ismael Flores

Well-Known Member
It’s $1 per ticket though, so I doubt that will be a breaking point for many people. Disney hasn’t seemed to find what the market is willing to pay as they raise tickets prices yearly by many dollars and people still pay it in droves (at least until all Hell broke loose this year).

It always starts small, once it is done anything is possible. It will probably end up being like those small taxes that are added to gasoline. starts off with a few cents then its a few more than we are screwed LOL
 

Disney Irish

Well-Known Member
Good, so we understand supply and demand.
Yes and we all understood it the first time you wrote it on the board professor.

That's right, the value of an item is determined by the price that people in a market will pay for an item. Do consumers pay the price of an item, including tax, when they purchase that item?
The final price is paid by the consumer. The price of the item is x the taxes added on at sale are y and the final price is z. x+y=z

Consumers pays the z price.

See professor I showed my work, do I get a gold star?

Yes, the consumer pays the price for a good or service. It seems like we agree about that. Do consumers decide what to buy based on how much profit a company will have on that item? If you go into a car dealership, do you typically spend more if the salesperson tells you that they will benefit by you paying a higher price? Or do you attempt to pay the lowest price you can for what you think the item is worth? Does it matter if the dollar in your pocket goes to the businessperson or to the state? Do you have more money in that case? Is the item worth more to you?
No the consumer doesn't decide what to buy based on how much profit the company will get. That is ridiculous. And is not even relevant to this discussion. Because this tax isn't going in Disney's bank account and never was.

Your example of the car dealership is also not relevant to this discussion. Because 1. you can negotiate pricing on cars, you can't in a theme park, 2. because there is a commission involved which again is not the case with a theme park, and 3. because we aren't talking about the price of the good being raised or lowered in order for the company to make a profit or not.

Let me use a better example. You stay in a hotel room. The price of the room is $200 per night. But there is an occupancy tax of 20% added to the price of the room set by the local government. So you don't pay $200 per night. You actually pay $240 per night. The price of the room didn't go up, its still $200 per night. The hotelier didn't set the price of the room based on that tax, they didn't lower the price to $160. They set it based on the market of other hotels around them since all other hoteliers also have to charge the same occupancy tax. The tax is added on at the time they collect. The consumer is stuck paying the $240 per night if they want that room. The same applies to any entertainment venue affected by this tax. They will set the price based on the market, like you keep mentioning, not based on the tax.

The exact position that you hold is that Disney is undervaluing tickets by selling them at their current price and should increase them to the new price regardless of whether there is a tax or not. Why wouldn't they? Under your view of decision making, Disney can set the price at a higher level with no consequences. And to support that position, you are now arguing that taxes on goods are not the price that consumers pay for them.
That is not what I'm saying at all. The price of the ticket is going to be set, the amount of taxes being collected is what will be going up. And that in the end the consumer is going to end up paying more. That is my whole point in this discussion. Which I think you ultimately agree with as well, if I pick up on where this post went.

A point we really haven't discussed yet is that companies don't have a "literal pocket" from which to pay or not pay from. Companies set pricing dynamically. Sometimes their profits go up, other times they go down. Operating expenses change, and sometimes tax and regulatory environments change. It's not that these things don't matter in sometimes complicated ways, but Disney won't have a choice whether to pay their taxes, and them paying their taxes doesn't a priori mean that you are paying more than you otherwise would have.

Unless, of course, as you seem to think, consumers don't actually care how much they pay for an item. Maybe that's true for you, but it's not true for me.
No duh they don't have a literal pocket, its a metaphor I figured you got that.

And yes consumers, even me, do care about what they have to pay out of their pocket, again another metaphor. And the very fact that it might come out of my own metaphorical pocket is why I'm even having this debate with you. The larger question is whether it will affect the overall attendance of not just Disneyland but of all the businesses that will be affected by this tax. And my thought it yes it will, which again is also shortsighted by the proponents of this tax.
 

October82

Well-Known Member
It always starts small, once it is done anything is possible. It will probably end up being like those small taxes that are added to gasoline. starts off with a few cents then its a few more than we are screwed LOL

This has to do with how sensitive to price increases consumers are. On things like gasoline, demand is only weakly impacted by changes in price. Luxury items have complicated pricing relationships, which is something that Disney exploits on ticket pricing. I would really encourage anyone who thinks gate taxes pose a serious threat of raising prices to remind themselves how much Disneyland tickets already cost.
 

October82

Well-Known Member
Yes and we all understood it the first time you wrote it on the board professor.

I'm just trying to make sure we agree on the basics.


The final price is paid by the consumer. The price of the item is x the taxes added on at sale are y and the final price is z. x+y=z

Consumers pays the z price.

See professor I showed my work, do I get a gold star?

I'm glad you showed your work. It's important to do so because that's how we learn. But you only get credit for addressing the prompt.

No the consumer doesn't decide what to buy based on how much profit the company will get. That is ridiculous. And is not even relevant to this discussion.

I agree that it is ridiculous, which is why I'm surprised that you've maintained a position equivalent to that claim for at least a couple pages of back and forth now. It is imminently relevant. Your position is that it matters whether the price of a Disneyland ticket is paid to Disney or paid to Disney + Anaheim.

Because this tax isn't going in Disney's bank account and never was.

But whether the tax is paid by Disney or the consumer is exactly what it is at stake in this conversation. As I've mentioned a few times, it's fine to assert that Disney isn't paying whatever, if we are explicit that this is an assertion.

Your example of the car dealership is also not relevant to this discussion. Because 1. you can negotiate pricing on cars, you can't in a theme park, 2. because there is a commission involved which again is not the case with a theme park, and 3. because we aren't talking about the price of the good being raised or lowered in order for the company to make a profit or not.

I used car pricing as an example where the relationship between buyer and seller is more transparent. None of these differences are relevant, but they do illustrate that it doesn't matter to you or I whether the dollars we spend include some amount of tax or if the retail price is inclusive. To consumers, we see the price of items and decide whether we can or can not afford to pay that price for the good or service in question.

Let me use a better example. You stay in a hotel room. The price of the room is $200 per night. But there is an occupancy tax of 20% added to the price of the room set by the local government. So you don't pay $200 per night. You actually pay $240 per night. The price of the room didn't go up, its still $200 per night.

And if that tax was not present, up to some caveats, the hotel in question should raise their price to $240. You're willing to pay it, so why wouldn't they?

The hotelier didn't set the price of the room based on that tax, they didn't lower the price to $160.

The price the hotel owner should charge in this situation is $240 if market conditions will support that price. If they don't, the hotelier should charge less. If $240 is still below the value of the room (say on a busy weekend), the hotelier should charge more.

They set it based on the market of other hotels around them since all other hoteliers also have to charge the same occupancy tax. The tax is added on at the time they collect. The consumer is stuck paying the $240 per night if they want that room. The same applies to any entertainment venue affected by this tax. They will set the price based on the market, like you keep mentioning, not based on the tax.

Yep. And they will all set the price based on what the market will pay for it.

That is not what I'm saying at all.

It really is. It follows quite clearly from your arguments, and you've made positions like that explicit. Earlier you mentioned that Disney will raise prices on many items "imperceptibly", again, arguing that consumers don't care how much items cost.

The price of the ticket is going to be set

... by market conditions.

, the amount of taxes being collected is what will be going up.

which is a change in the effective operational cost.

And that in the end the consumer is going to end up paying more.

Not unless consumers would choose to pay that price regardless of whether the tax was imposed.

That is my whole point in this discussion.

And it is an intuitive position to hold, but not one that is true.

Which I think you ultimately agree with as well, if I pick up on where this post went.

Where this post ultimately went is explaining how markets and pricing actually work, because for all of the times you've described economics as simple (or naive in your words), you haven't actually made arguments that show you understand it.

No duh they don't have a literal pocket, its a metaphor I figured you got that.

I thought I did, but it has become increasingly clear that you use the metaphor more literally than you should. Your position reflects an understanding of corporate finances that assumes fixed assets and an ability to arbitrarily set market prices. That's largely true for most of us. If we took a pay cut, we'd pick up side work or find another job, but it doesn't work like that for firms.

And yes consumers, even me, do care about what they have to pay out of their pocket, again another metaphor. And the very fact that it might come out of my own metaphorical pocket is why I'm even having this debate with you. The larger question is whether it will affect the overall attendance of not just Disneyland but of all the businesses that will be affected by this tax. And my thought it yes it will, which again is also shortsighted by the proponents of this tax.

Okay. I'm personally happy to give a few dollars to the city of Anaheim that I would have otherwise been giving to Disney for my day in the parks. Government spending creates jobs and attracts investment too.
 

Disney Irish

Well-Known Member
I'm just trying to make sure we agree on the basics.




I'm glad you showed your work. It's important to do so because that's how we learn. But you only get credit for addressing the prompt.



I agree that it is ridiculous, which is why I'm surprised that you've maintained a position equivalent to that claim for at least a couple pages of back and forth now. It is imminently relevant. Your position is that it matters whether the price of a Disneyland ticket is paid to Disney or paid to Disney + Anaheim.



But whether the tax is paid by Disney or the consumer is exactly what it is at stake in this conversation. As I've mentioned a few times, it's fine to assert that Disney isn't paying whatever, if we are explicit that this is an assertion.



I used car pricing as an example where the relationship between buyer and seller is more transparent. None of these differences are relevant, but they do illustrate that it doesn't matter to you or I whether the dollars we spend include some amount of tax or if the retail price is inclusive. To consumers, we see the price of items and decide whether we can or can not afford to pay that price for the good or service in question.



And if that tax was not present, up to some caveats, the hotel in question should raise their price to $240. You're willing to pay it, so why wouldn't they?



The price the hotel owner should charge in this situation is $240 if market conditions will support that price. If they don't, the hotelier should charge less. If $240 is still below the value of the room (say on a busy weekend), the hotelier should charge more.



Yep. And they will all set the price based on what the market will pay for it.



It really is. It follows quite clearly from your arguments, and you've made positions like that explicit. Earlier you mentioned that Disney will raise prices on many items "imperceptibly", again, arguing that consumers don't care how much items cost.



... by market conditions.



which is a change in the effective operational cost.



Not unless consumers would choose to pay that price regardless of whether the tax was imposed.



And it is an intuitive position to hold, but not one that is true.



Where this post ultimately went is explaining how markets and pricing actually work, because for all of the times you've described economics as simple (or naive in your words), you haven't actually made arguments that show you understand it.



I thought I did, but it has become increasingly clear that you use the metaphor more literally than you should. Your position reflects an understanding of corporate finances that assumes fixed assets and an ability to arbitrarily set market prices. That's largely true for most of us. If we took a pay cut, we'd pick up side work or find another job, but it doesn't work like that for firms.



Okay. I'm personally happy to give a few dollars to the city of Anaheim that I would have otherwise been giving to Disney for my day in the parks. Government spending creates jobs and attracts investment too.
Well I'm not going to address this point by point. I'll just say that you yourself are asserting a lot as well. I'll admit yes I'm asserting that Disney isn't going to pay this new tax, if that will make you feel better and like you've accomplished something. But then you also have to admit that you are also asserting that if said tax was removed then business X, no matter what that business may be, would always charge more because the idea "why wouldn't they". Its more complex than that and you know it.

So lets just agree we're both asserting a lot here and call it a day.

I know that you want to come in and educate us all on this topic. But some of us actually understand this stuff better than you think we do. Some of us have been around this great big world of few times, and understand the nuances of both economics and politics. I really didn't want to get into a big economics debate with you. And that is why I chose to go simpler in the discussion. Because a larger economics debate is not really relevant to this thread or even this topic. While I understand what you were trying to get at, its more complex then even you were stating due to the politics involved. Bottom line the consumer is not going to want to pay a higher price based on newer taxes imposed.

Also I'm happy you're willing to give a few more dollars to Anaheim. However some of us don't want to be forced into a new tax for what amounts to a political stunt. Anaheim deserves better than that.
 
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DrAlice

Well-Known Member
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October82

Well-Known Member
Well I'm not going to address this point by point. I'll just say that you yourself are asserting a lot as well. I'll admit yes I'm asserting that Disney isn't going to pay this new tax, if that will make you feel better and like you've accomplished something.But then you also have to admit that you are also asserting that if said tax was removed then business X, no matter what that business may be, would always charge more because the idea "why wouldn't they". Its more complex than that and you know it.

So lets just agree we're both asserting a lot here and call it a day.

I know that you want to come in and educate us all on this topic. But some of us actually understand this stuff better than you think we do. Some of us have been around this great big world of few times, and understand the nuances of both economics and politics. I really didn't want to get into a big economics debate with you. And that is why I chose to go simpler in the discussion. Because a larger economics debate is not really relevant to this thread or even this topic. While I understand what you were trying to get at, its more complex then even you were stating due to the politics involved. Bottom line the consumer is not going to want to pay a higher price based on newer taxes imposed.

Also I'm happy you're willing to give a few more dollars to Anaheim. However some of us don't want to be forced into a new tax for what amounts to a political stunt. Anaheim deserves better than that.

The issue in this thread, and the reason that I put time into responding to all of this while trying to aim at clarity, is that we need to be clear what is asserted and what is known for good reasons.

As others alluded to before our discussion, conversations in this thread are often only had from a pro-corporate perspective by people involved in Anaheim politics. I respect them for their views, and to the contrary, I don't assume that anyone on this forum is anything less than well educated and nuanced in their understanding. However, because there is so much agreement between the few posters who engage in these threads, we don't see what are really assertions on ideological grounds that should be questioned and often rejected. That ideology is a pro-corporate one, which sees companies like Disney as unambiguously beneficial to the cities that they operate in and generous to their employees. It fits with our everyday understanding, perhaps from "many trips around the sun", but it isn't a correct one. The rhetoric is anti-taxation and often anti-labor, and presented as if there is no sensible economic arguments against those positions. Recognizing and stating that these assertions are assertions, and presenting the underlying economic theory as to why these assertions are questionable at best and very often false, does not amount to simply a counter-assertion. It's trying to have a fact based discussion. When that works and when our discussions are productive, we ask questions of those assertions and make progress towards a consensus that we can both agree to. Unfortunately that didn't happen here. The conversation ran its course awhile ago, and it seemed full of misunderstandings from the beginning.

Taxes are a sensible policy solution to problems related to externalities and used effectively at every level of government for that purpose. I don't see that as a "political stunt", but politicians do many things for reasons both good and bad.
 

el_super

Well-Known Member
Taxes are a sensible policy solution to problems related to externalities and used effectively at every level of government for that purpose. I don't see that as a "political stunt", but politicians do many things for reasons both good and bad.

I agree. The more troubling idea behind what gets posted here, is that even the idea of a tax seems like a threat, and beyond any reasonable discussion. Something that should be mocked and ridiculed.

I think we all realize that taxes, applied without discretion, can have a negative impact, but the only way we will know for sure is if more research is done, and the dialogue is allowed to start.

And fwiw, in case anyone doesn't realize, Walt Disney World's tickets are taxed, and even in some instances are cheaper than Disneyland's.
 

Disney Irish

Well-Known Member
The issue in this thread, and the reason that I put time into responding to all of this while trying to aim at clarity, is that we need to be clear what is asserted and what is known for good reasons.

As others alluded to before our discussion, conversations in this thread are often only had from a pro-corporate perspective by people involved in Anaheim politics. I respect them for their views, and to the contrary, I don't assume that anyone on this forum is anything less than well educated and nuanced in their understanding. However, because there is so much agreement between the few posters who engage in these threads, we don't see what are really assertions on ideological grounds that should be questioned and often rejected. That ideology is a pro-corporate one, which sees companies like Disney as unambiguously beneficial to the cities that they operate in and generous to their employees. It fits with our everyday understanding, perhaps from "many trips around the sun", but it isn't a correct one. The rhetoric is anti-taxation and often anti-labor, and presented as if there is no sensible economic arguments against those positions. Recognizing and stating that these assertions are assertions, and presenting the underlying economic theory as to why these assertions are questionable at best and very often false, does not amount to simply a counter-assertion. It's trying to have a fact based discussion. When that works and when our discussions are productive, we ask questions of those assertions and make progress towards a consensus that we can both agree to. Unfortunately that didn't happen here. The conversation ran its course awhile ago, and it seemed full of misunderstandings from the beginning.

Taxes are a sensible policy solution to problems related to externalities and used effectively at every level of government for that purpose. I don't see that as a "political stunt", but politicians do many things for reasons both good and bad.
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