Econo-genius Matt Yglesias: In business, taxes are ‘irrelevant to pricing’

Is he ever!

We should all probably grab a chair for this one. This tweet needs no introduction, except perhaps a warning to put a pillow on your desk before you slam your head down on it:

Beg your pardon, Matt?

Good Lord. Pretty sad when a guy who gets paid to write about economics doesn’t even understand the basics:

Seems pretty straightforward, no?

The devil, you say!

Let’s see some more of that new math, baby:


Exit question for Matty:

At least that would be an excuse for this much stupidity. Holy cow.



Twitchy coverage of Matt Yglesias

  • NRPax

    I’d suggest that we isolate people like that so they can put their pet economic theories to the test, but Detroit just went bankrupt.

    • GaryTheBrave

      There’s California. Their entire legislature desires to max out taxes.

      • NRPax

        One of the many reasons I left in 99.

      • ceemack

        C’mon, give us a break. We’ve already absorbed far too many of other states’ silly liberals. And look what it’s done to us.

        • Lady 12

          Yeah, and then your liberals started migrating up into Washington, which used to be Republican. Thanks a lot!

          • ceemack

            We try to export them as quickly as we can.

          • Lady 12

            Be careful, or they’ll start coming back to you – heavily armed, since WA’s still a pro-guns state for now. 😉

      • Stone Bryson

        Colorado is where California was 20 years ago, and it will fall apart much faster IMO.

        BTW – why DO progressives destroy our best states for awesome landscapes? They must hate the environment or something…

        • Lady 12

          So true. Washington’s pretty fabulous, and they’re tearing it to bits.

        • trixiewoobeans

          Calif. was Lib-hammered in the late 60’s, 70’s and 80’s. People fled to Oregon, Wash., Montana, etc., but now they’re Lib toilets, and Colo. just went down, but they’re fighting! Libs can’t seem to make the connection that they flee blue states because they’ve been ruined by their policies, then they ALWAYS flee to Red states for the QUALITY OF LIVING, which they then destroy! Wherever they go, they ruin it! There’s a complete disconnect in their brains that THEY and their policies ARE the problem! They’re like an invasive species of weed, choking the life and vitality out of everything!

          • Marvin Nelson

            They remind me a lot of the aliens in Independence Day, except that the aliens were better looking and a whole lot smarter.

    • trixiewoobeans

      They have no conception of reality. They sit in their little glass houses, doing nothing useful, just write, snark and pass judgment on everybody else. They imagine they’re superior, but in actuality all these creepy flyover elitists are as helpless as babies. Let a disaster strike where they’d have to fend for themselves, and they’ll be the first ones to expire, because they know nothing!

      • Marvin Nelson

        Once again validating Darwin’s theory of natural selection. Maybe we need a good disaster to take some of them out.

  • Jack Deth


    I think I shall pass on the shortest bio-pic to come out of Liberal La la Land.

    Matt Yglesias: Raging Stupid!

  • ceemack

    Did Matty forget to wear his helmet on the bus to work again–you know, the little yellow one–and take another tumble on the steps?

  • alanstorm

    Keep in mind that this alleged person is considered an “intellectual” on the left.

    • BAW

      We should make a list. Bill Clinton is a great guy. Shelia Jackson Lee is an expert of Homeland Security. John Kerry and Hilary Clinton are experts on foreign affairs. Obama is brilliant. The examples of who they think are smart and capable and should be entrusted with great power is depressing or frightening. Joe Biden, oh my.

      • Stephen L. Hall

        Welcome to the Idiotocracy.

        • Marvin Nelson

          I just watched Idiocracy and it scared the bejesus out of me.

          • WisconsinPatriot

            It has become a documentary……Someone PLEASE kill me.

      • Phelps

        It’s the Dunning-Kruger effect. They are SO stupid, they don’t even know what smart LOOKS LIKE. They are so bad, they don’t even know that they are bad, and think that they are experts.

  • Steve_J

    “That’s just retarded, sir”.

    • World B. Free

      Yes it is.

  • WhoMeToo

    Dumbest thing ever Tweeted (this week alone)?? @mattyglesias or @MeghanMcCain

  • Jd1367

    They just give those Harvard diplomas away, don’t they?

    • TugboatPhil

      But his professor told him this was true! That was right before he spent the rest of the semester expounding upon the evils of capitalism, Amerikkka and whitey.

    • Stephen L. Hall

      No, they sell them to the highest bidder . . . more profitable.

    • Tigerspike

      I have a couple of friends that graduated from Harvard. I’m convinced that there are no academic standards there besides “regurgitate leftist crap without thought.”

    • TocksNedlog

      Marxist diploma mill.

      • Zach Smith

        It truly is.

  • Peetweefish

    I can math.

  • aPLWBinAK

    What happens when someone’s last two brain cells get into a fistfight on his keyboard…..

  • Markward

    Next time tune in to see everyone’s favorite economist state that businesses run on unicorn farts and good intentions!

  • Lotte Lenya

    Too bad all fiscal conservatives are so dumb. Upside is, we have this Matt character to show us the error of our ways. Oy.

  • FreedomFighter

    Well, this just sealed the fate of Matt Yglesias’ relevance in economics. His primary job…lol

  • TJ

    To get out of paying taxes, have no profit or even run at a loss every year. Just make sure you have no money that is not carried over from year to year after all the overhead and labor is paid for. Just pay everyone a bonus if there is more money, so there is no profit to tax.

    • Michael Anderson (WB)

      You can only claim a loss so many years in a row.

      • TJ

        Of course you can’t claim loss for too many years as you will go bankrupt and have to close up shop.

    • Zach Smith

      The IRS does not allow this.

      • TJ

        IRS does not charge taxes on profits only and taxes have no affect on the price of services either.

      • Finrod Felagund

        Unless you’re a Hollywood studio.

  • LinTaylor

    He probably also believes that we can achieve an economic utopia by raising the minimum wage to $20/hr.

  • Michelle

    I’m astounded that a paid economics blogger really believes what he just Tweeted. What is there to be confused about? I’m just picking random %s here…if a company pays 10% taxes on their profits and then receives a 5% increase in taxes, does this total fool really think that 5% is going to come out of the profits? No dipwad, the 5% increase is passed onto the consumer by an increase in pricing so the company maintains its profit level. I know 12 yr olds who can understand this.

    • Canadian in USA

      Yeah, but don’t forget that Matt is only espousing the leftist’s philosophy on taxes and profit.

      • Michelle

        He’s probably one of the fools that demands the end of tax breaks for the oil companies because he’s believes it’s time to really stick it to them. According to his line of thinking, oil corps would simply suck up the tax increases and deal with lower profits (because that’s what the unicorns told him) and doesn’t realize to increase taxes on oil companies would result in all of us paying more at the pump. FFS I never studied economics and even I understand this. Then again, I was born with a wee bit of common sense.

        • Canadian in USA

          Yeah…I’m starting to realize “common sense” doesn’t appear to be common anymore. :(

          • GaryTheBrave

            You’re just STARTING to realize this?

      • Michael Anderson (WB)

        Which when summed up is:
        Profits are evil and taxes are salvation for the masses.
        Or exactly as our shared homeland has done.

    • Ali’s Snackbar

      Keep in mind that there is a ripple effect through the entire supply chain. Every company will pass part or all of the increase down the line, so the retailer at the end of the line is adding more that 5%.

      • Michelle

        I’m not the one who needs this explained to me.

        • Ali’s Snackbar

          I realize that you don’t need that explained to you. I was simply adding my opinion to your post. Sorry if I offended you.

          • Michelle

            No offense taken. :-)

    • aztectrumpet

      They probably can’t maintain profit levels, since as prices go up, # of sales probably goes down.

      • Michelle

        That could very well happen, but I think you’re missing the point. This person Yglesias, apparently an economic blogger, fails to understand that everything a company pays as the cost of doing business (and this includes taxes) is figured into pricing. Any increase to a company that has an impact on their profits is reflected in adjusted pricing. Its called Economics 101 and the whole point of this post is that we’re finding it hilarious and pathetic that an economics major, a person paid to discuss economics, doesn’t seem to understand this. Whether or not the company’s sales go down as a result of increased pricing is a while other topic.

      • GaryTheBrave

        That is called “elasticity of demand.”

    • Stephen L. Hall

      You are assuming a 5% sales tax as opposed to a 5% corporate income tax which was that to which he was attempting to allude. Regardless, studies show that any tax on corporations is (1) partly passed to consumers; (2) partly born by the employees; and (3) accrues to the owners of the company and generally split in roughly equal proportions of about a third each. Which is why it hits small business owners particularly hard because they are both owners and the employees.

      • Michelle

        I’m making no such assumption. I don’t confuse sales tax with the cost of an item. Sales tax has absolutely nothing to do with this discussion and absolutely nothing to do with the taxes a corporation pays on their income. He wasn’t attempting to allude to anything – he was quite clear with his ignorance. He thinks corporate taxes are irrelevant to their pricing. Even some nameless studies you quoted show he’s wrong: “Regardless, studies show that any tax on corporations is (1) partly passed to consumers”

    • Jeremy

      Yeah common sense is lost among too many people and this guy is a great example.

    • WisconsinPatriot

      Price forward….
      Oh, yeah…..businesses also have to PROJECT REVENUE. Do you know what that is? Yeah…..that would be the toilet paper degree in economics dissolving into the septic system.

  • Stephen L. Hall

    In a theoretical sense, in a captive market, all companies operating under the same laws, in a perfectly competitive market, with identical production cost curves, with identical marginal tax rates and we are only considering an income tax . . . maybe. In the real world this highly theoretic, limited and specialized statement is just plain stupid.

    • Zach Smith

      People wouldn’t create businesses without sufficient profits, even if all your other conditions were true. Without rising prices, there would be shortages.

      • Stephen L. Hall

        Oh, it’s completely unwise and foolish, but as with most hypothetical statements if you put enough conditions on it you can make it true.

        • Infinite_Indeterminism

          Yeah, I thought I saw the hog take off from my neighbor’s field…


          It’s WAY beyond unwise and foolish, and far into Honecker’s field of golden unicorns speaking fluent bureaucratese…
          (I’ve just been looking at some videos about the …morass that was known as East Germany.)

  • Canadian in USA

    Not surprised at this. Matt is just echoing the leftist’s philosophy on taxing businesses. They all assume profit is bad/greed and businesses will just absorb all costs. It’s no different than the “economic geniuses” in Detroit/Flint who want $15/hr to work at McDonald’s.

    • Stephen L. Hall

      The proper lingo is not “profit” but the “self-valorization” of money. No, it doesn’t make any more sense, but you can sound like one of them.

    • Ali’s Snackbar

      I’m still waiting for the left in the US to latch on to “the growing gap between rich and poor”. It allows progs to ignore the fact that the poor don’t do without much and be able to scream about “greedy corporations”.

    • Marvin Nelson

      If they want to make $20 per hour at McDonald’s, they need to go to the oil fields in North Dakota.

  • ceemack

    I’m not sure what astounds me more…that he said it, or that he said something so absurd with such certainty.

    • Stephen L. Hall

      Try setting through some graduate economics courses . . . there are a lot of statements like that . . . he just left off the twenty or so caveats and conditions necessary to make the statement work.

    • mickeyco

      No matter how ignorant his statements, he always makes them with authority.

  • TomJB

    Taxes are assessed on profits and not sales. WOW! Somehow the federal government manages to get 18 cents per gallon and some states, like CA, get 60 cents per gallon on every gallon of gas sold. When profit on a single gallon is about 6 cents. THIS guy is what we call a “mental giant”

    • alanstorm

      Actually, IIRC, Profit is AFTER taxes, and taxes are based on revenue AND sales (in most businesses).

      E.g., Chevron pays taxes on sales (tax per gallon) and on its total revenue, which would be after the sales taxes. True, it’s just acting as a tax collector on the sales side, but that still adds something to its cost – after all, the amount collected doesn’t magically make its way into the various coffers it fills. They have to pay someone to handle that – which adds no value to the product at all.

    • WisconsinPatriot

      There are so many conundrums in tax structure,fuel being HUGE among them.
      You can parse virtually ANY expense to a business, and their are so many circumstances surrounding them, it makes the head spin. Matty takes……LITERALLY the simplest calculation made in pricing, and denies its existance. Brilliant.

  • Guest

    What do you get when you graduate from Hawvaard, magna cum laude with a degree in philosophy? An economics genius, obviously.

  • World B. Free

    Matt Yglesias obviously went to the National Socialist Democrat’s college of economics and studied under the esteemed Professor Barack Hussein 0bama.

  • SpaceRacer423

    This is why Matt writes economics for Slate, but is NOT their accountant.

  • JohnnyN2O

    Matt got his degree in economics at the University of Cuba

    • AKB

      He actually received his undergrad degree from Harvard. And we know:
      “Everyone with a Harvard degree is smarter than those who studied elsewhere.”
      “Where’d you read that?”
      His degree is in Philosophy as opposed to Economics. I think that explains a lot.

  • World B. Free

    With the economic genius of Matt Yglesias, and the cancer-curing abilities of Meghan McCain, rest assured that our civilization is in good hands.

  • americanexile

    He should go buy a pack of cigarettes and a beer in NYC, and try tweeting that again with a straight face.

  • Jeff Chrzanowski

    Matty has no clue why there’s a mall on I-93 in New Hampshire just across the Massachusetts state line.

    • TexSizzle

      Is that the one with the corner cut off to keep it from extending into Massachusetts?

  • Guest


  • Garth Haycock


  • IceColdTroll


  • Zhenia Oleynik

    It is a well known fact most business/economics writers and commentators have zero background in the matter, other than obtaining a degree from school. Those of us who have worked in the accounting/finance field – like me! – all understand that school taught us next to nothing when it comes to real world applications. I cannot help but laugh at people like Matt Yglesias who thinks he knows everything because he went to Harvard, but in reality does not know a damn thing.

    Not sure whether or not to pity the patsies that read the excrement coming from him and other such writers and actually believe what they are reading.

    I have worked in tax for the latter part of a decade now, and that is by far the most ignorant economic statement I have ever read. Unbearably illogical.

    • Jerry Camp

      Worse yet, Matty Ice here has a Harvard degree in philosophy, not business or economics.

  • TocksNedlog

    “Matt, did you eat paint chips as a kid?”
    — Who said he ever stopped?

  • IceColdTroll


    • TocksNedlog

      All of your posts today ROCK!!!

      • IceColdTroll

        Thanks, I try!

    • Jeremy

      That is great and very fitting.

  • DearLeaderObamba

    I always wondered how Pol Pot’s economic advisers used to talk. Matt provides a hint.

  • TocksNedlog

    He are smart.

  • Joe W.

    Looks like Matty & Bronco Bamma are on the same page…..seasoned businessmen that they are.

  • wbmccl

    Well, let’s think about this. Cost accounting will calculate break-even points without taxes, fair enough. Pricing structures, to that end, can be determined with taxes considered exogenously, i.e. under the assumption that taxes are irrelevant to the per-unit cost and per-unit pricing.

    Of course, what is of interest to businesses (in particular small businesses) isn’t just pre-tax income, but take-home income. This is especially the case with small businesses where owner income is equal to business income. For larger companies, this also translates to after-tax earnings and shareholder value.

    So suppose a tax is levied that increases the tax burden on a business. For the owner to maintain their level of income (or a shareholder corporation to maintain shareholder earnings), gross income must increase. Therefore, prices must be raised relative to the increase in taxation.

    Wow, that was really hard thinking! We shouldn’t really hold Matt Yglesias accountable for that sort of hard work, it’s not like his job is economic reporting or something.

  • JBDestiny

    Matt, prices are not costs. Prices are what cover costs.

  • World B. Free

    “Sure, we’re losing money on this product, but we plan to make up for it in volume!!!!”

    — Economic genius Matt Yglesias

  • Zach Smith

    I have actually had this argument before with liberals. It is quite infuriating that people can be this dense. And even more infuriating that people like this are running our government.

  • Marvin Nelson

    Is this idiot for real? He knows less about economics than Obummer. /giant facepalm

  • R.C.

    Oh, come on. This guy has to be saying this dumb sh!t on purpose. I never knew who he was before Twitchy came along and I now assume he is just using it as a proxy platform.

  • Finrod Felagund

    Looks like Matty knows about as much about economics as he does about politics.

  • Jeremy


  • bkyguy

    the amount of stupid people who get paid to speak about stuff they know nothing about . . . its taxing

  • WisconsinPatriot

    Let this be a warning to all of you…..huffing gasoline is NOT the “completely harmless lifestyle choice” your 7th grade public school teacher told you it was. This is the result…..simply shocking.

    • marcellucci

      Speaking of gasoline…..practically half the base price of gas is taxes…..
      THEN the merchant pays taxes on the profits…..
      I guess Matt rides unicorns to work, so he wouldn’t know that…..

  • TDS

    I’m guessing his business experience is about as extensive as Obama’s.
    And these geniuses probably think that the cost of labor probably doesn’t affect prices either, since there is such a push for increasing the minimum wage…

  • Jen

    Guess he’s never heard of sales tax

  • sherlockzz

    Me and the entire NH / Ma border are having a good laugh on that one.

  • mouell

    Obamanomics 101.

  • Burn_the_Witch

    Don’t forget, Mattie is an accounting genius too:

  • David Gillies

    So an ‘economics blogger’ has never heard of tax incidence? The whole crop of Journolist juice-boxers is pretty unimpressive, but Yglesias has always struck me as being one of the more incompetent and parti pris among it. He’s truly outdone himself this time, though.

    • Fred_Z

      We have a lot of comments here and you’re the only guy who knows about tax incidence.

      Apparently the commenters are as dull as Yglesias.

  • cormac_mcroadie

    This is, without a doubt, colossally, galactically stupid.

    But not the stupidest thing on Twitter. Not by a long shot.

  • Malaysian Neocon

    3 minutes. Just 3 minutes to prove or disprove using schoolkid maths.

  • CapitalistInfidel

    You mean I screwed up for 17 years? I got this coupon book in the mail every year, it had 12 in all, one for each month. The top line says “gross sales,” the next line says multiply by 7.25%. The last line says, “amount due.” I kept giving $7250 on 100,000 in sales each month. I didn’t realize that since my “profit” was only around $3000 each month I was supposed to pay around $200. If that was the case I’d still own that business and would have built many many more restaurants around the country.

    It’s too bad liberals are incapable of feeling shame.

  • HarlemGhost

    The ObamaCare Medical device tax …
    from the IRS website:
    The tax is 2.3 percent of the sale price of the taxable medical device. See Chapter 5 of IRS Publication 510, Excise Taxes, and Notice 2012-77 for additional information on the determination of sale price.
    one example of a tax on sales …
    Ignorance on this scale can only come from post graduate work …