hoops902
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Post by hoops902 on Apr 25, 2011 14:44:13 GMT -5
"Even if you decreased corporate taxes to just 10% or something like that, it would have a huge impact on the investment in this country. When Bush floored the profit repatriation to 5%, there was a flood of money that came back into the states. What if we made that our normal policy and actually invested in our futures? "
Why did a flood of money come back to the states? Because everyone wanted to invest in these now more-profitable companies. It didn't come back because tax cuts caused prices to drop. It came back because lower tax repatriation meant higher profits to investors.
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formerexpat
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Post by formerexpat on Apr 25, 2011 14:45:01 GMT -5
We've had a trade imbalance for years now. The net difference of the goods from foreign locations that would be taxed at the national sales rate compared to those that go into foreign countries to be sold would be more than offset. Our goods would also be much more competitive because the "cost of goods" would be much lower if we didn't have a corporate tax.
Might I say, we might even be able to bring some industries back that have become uncompetitive here in the states?
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Post by Deleted on Apr 25, 2011 14:53:48 GMT -5
"Do you really think McDonald's prices all of their products the way you describe in your example? Not everything on the $1 menu has the same cost, pricing has other factors to consider more than just cost to manufacture. The $1 items aren't going to become the $.71 menu. So now you're paying $1 plus the 25% tax." - horatio
Perhaps they would go with a $0.75 cent menu. In Texas the sales tax is 8.25% so that would make a Fed Tax of $0.19 (@ 25%) and a State Tax (TX) portion of $0.06 (@ 8.25%) equaling $1.00. As it stands now, we pay $1.08 for a dollar menu item in Texas. Woohoo.....$0.08 SAVINGS!!
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hoops902
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Post by hoops902 on Apr 25, 2011 14:59:59 GMT -5
"Do you really think McDonald's prices all of their products the way you describe in your example? Not everything on the $1 menu has the same cost, pricing has other factors to consider more than just cost to manufacture. The $1 items aren't going to become the $.71 menu. So now you're paying $1 plus the 25% tax." - horatio Perhaps they would go with a $0.75 cent menu. In Texas the sales tax is 8.25% so that would make a Fed Tax of $0.19 (@ 25%) and a State Tax (TX) portion of $0.06 (@ 8.25%) equaling $1.00. As it stands now, we pay $1.08 for a dollar menu item in Texas. Woohoo.....$0.08 SAVINGS!! It's exciting until you realize the 25% fed tax number was just invented from nothing lol. Or perhaps they'd keep it at $1 and you'd now pay $1.33 for your $1 burger. ETA: I think the idea that it was 25% picked though speaks to my point. Why 25%? Why not 23.45%? Why does Texas has an 8.25% state tax and not 8.372839% state tax? Because having round numbers and "pretty" numbers matters. That's why you don't get the full price drop you think you'll receive. That's why Subway has "$5 footlongs" rather than $4.68 footlongs" commercials. If you want the price drops, you've gotta get companies past specific price points.
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Post by Deleted on Apr 25, 2011 15:12:27 GMT -5
"Do you really think McDonald's prices all of their products the way you describe in your example? Not everything on the $1 menu has the same cost, pricing has other factors to consider more than just cost to manufacture. The $1 items aren't going to become the $.71 menu. So now you're paying $1 plus the 25% tax." - horatio Perhaps they would go with a $0.75 cent menu. In Texas the sales tax is 8.25% so that would make a Fed Tax of $0.19 (@ 25%) and a State Tax (TX) portion of $0.06 (@ 8.25%) equaling $1.00. As it stands now, we pay $1.08 for a dollar menu item in Texas. Woohoo.....$0.08 SAVINGS!! It's exciting until you realize the 25% fed tax number was just invented from nothing lol. Or perhaps they'd keep it at $1 and you'd now pay $1.33 for your $1 burger. ETA: I think the idea that it was 25% picked though speaks to my point. Why 25%? Why not 23.45%? Why does Texas has an 8.25% state tax and not 8.372839% state tax? Because having round numbers and "pretty" numbers matters. That's why you don't get the full price drop you think you'll receive. That's why Subway has "$5 footlongs" rather than $4.68 footlongs" commercials. If you want the price drops, you've gotta get companies past specific price points. I get the point y'all are trying to make.....but the one thing neither you or horatio has mentioned is that your and my paychecks wouldn't be the same as they are now. We wouldn't get the NET.....we'd get the GROSS. As far as horatio saying something about foreigners not paying the tax, I don't quite understand his point. If the tax is only on the purchase of items, then a foreigner visiting the US would be paying more of our (USA) taxes than they currently are.
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hoops902
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Post by hoops902 on Apr 25, 2011 15:18:02 GMT -5
"I get the point y'all are trying to make.....but the one thing neither you or horatio has mentioned is that your and my paychecks wouldn't be the same as they are now. We wouldn't get the NET.....we'd get the GROSS."
What? The reason it hasn't been mentioned is because I don't think anyone has suggested the idea that we would no longer have payroll taxes in this scenario (at least the scenario I've been discussing). It's been about eliminating corporate taxes, not payroll taxes that the corporation forwards on your behalf.
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Post by Deleted on Apr 25, 2011 15:20:30 GMT -5
"I get the point y'all are trying to make.....but the one thing neither you or horatio has mentioned is that your and my paychecks wouldn't be the same as they are now. We wouldn't get the NET.....we'd get the GROSS." What? The reason it hasn't been mentioned is because I don't think anyone has suggested the idea that we would no longer have payroll taxes in this scenario (at least the scenario I've been discussing). It's been about eliminating corporate taxes, not payroll taxes that the corporation forwards on your behalf. This is mainly a form of the FAIR TAX. That's why corporate tax, as well as income tax would go away. You'd basically just be taxed at the register after you've purchased the goods.
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hoops902
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Post by hoops902 on Apr 25, 2011 15:20:41 GMT -5
I was asking about the corporate tax going to zero. I was not asking about flat taxes or other taxes replacing it. That was my understanding, that we were discussing corporate taxes going to zero. Which would have no effect on receiving the Gross of your paycheck rather than the Net.
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Deleted
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Post by Deleted on Apr 25, 2011 15:22:26 GMT -5
I was asking about the corporate tax going to zero. I was not asking about flat taxes or other taxes replacing it. Even in that case, somebody would try to get a bigger market share and reduce prices forcing everyone to reduce prices if they want to stay in the game.
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formerexpat
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Post by formerexpat on Apr 25, 2011 15:23:16 GMT -5
23% is the percentage most often quoted by those that have fair tax proposals.
It appears you don't quite have the business, financial or economic sense and background to understand how things work, so it's not much worth it for someone to waste their time with you.
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hoops902
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Post by hoops902 on Apr 25, 2011 15:23:27 GMT -5
"I get the point y'all are trying to make.....but the one thing neither you or horatio has mentioned is that your and my paychecks wouldn't be the same as they are now. We wouldn't get the NET.....we'd get the GROSS." What? The reason it hasn't been mentioned is because I don't think anyone has suggested the idea that we would no longer have payroll taxes in this scenario (at least the scenario I've been discussing). It's been about eliminating corporate taxes, not payroll taxes that the corporation forwards on your behalf. This is mainly a form of the FAIR TAX. That's why corporate tax, as well as income tax would go away. You'd basically just be taxed at the register after you've purchased the goods. This isn't what we're talking about though. We've been talking strictly about corporate taxes going away, and jacking up sales tax to compensate. There has been no discussion about eliminating payroll taxes or personal income taxes (in this thread as far as i know)...that's why no one has brought it up. The original supposition was what eliminating the corporate taxes would due to pricing. We haven't brought the elimination of other taxes into discussion that I've seen...which is why neither Horatio or I have mentioned it in our arguments I assume.
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hoops902
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Post by hoops902 on Apr 25, 2011 15:26:35 GMT -5
23% is the percentage most often quoted by those that have fair tax proposals. It appears you don't quite have the business, financial or economic sense and background to understand how things work, so it's not much worth it for someone to waste their time with you. You don't understand the difference between a simple "fair tax" and our discussion of eliminating only the corporate income tax. If you are unable to draw the distinction between the 2 you might want to sit this discussion out until you've done some research. Or you might want to at least read the thread before tossing in your ignorant comments.
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formerexpat
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Post by formerexpat on Apr 25, 2011 15:27:46 GMT -5
Just another benefit to the citizens, right?
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Post by Deleted on Apr 25, 2011 15:27:47 GMT -5
This is mainly a form of the FAIR TAX. That's why corporate tax, as well as income tax would go away. You'd basically just be taxed at the register after you've purchased the goods. This isn't what we're talking about though. We've been talking strictly about corporate taxes going away, and jacking up sales tax to compensate. There has been no discussion about eliminating payroll taxes or personal income taxes (in this thread as far as i know)...that's why no one has brought it up. The original supposition was what eliminating the corporate taxes would due to pricing. We haven't brought the elimination of other taxes into discussion that I've seen...which is why neither Horatio or I have mentioned it in our arguments I assume. Why the need to jack up sales taxes? As it stands, there is no FEDERAL SALES TAX added on to items at the point of purchase. Hell, in some states, there isn't even a STATE SALES TAX. There would be no point in eliminating corporate taxes if the fed gov't is only to going to replace the corporate tax with a Federal Sales Tax of the same percentage.....that would be stupid......so look for it to happen since the gov't is involved.
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formerexpat
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Post by formerexpat on Apr 25, 2011 15:30:01 GMT -5
The two are related [along with the personal income tax] since the move would have to largely revenue neutral. You can't just move one part of the equation without adjusting the others.
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hoops902
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Post by hoops902 on Apr 25, 2011 15:33:26 GMT -5
"Why the need to jack up sales taxes?"
That was another poster's suggestion for how to compensate for lost revenue through the elimination of the corporate income tax. That's why I said the 25% number was just plucked out of the air.
The poster who suggested it did so in an effort I believe to make the tax more up front to consumers who would then presumably hold their government officials more accountable (in theory).
Did you read the thread? Or just started posting pretending that we were talking about the "fair tax" when we werent?
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hoops902
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Post by hoops902 on Apr 25, 2011 15:39:43 GMT -5
The two are related [along with the personal income tax] since the move would have to largely revenue neutral. You can't just move one part of the equation without adjusting the others. The suggestion was elimination of corporate income taxes, and remaining revenue neutral by a subsequent increase in sales tax. It's not that you can't change payroll and personal income taxes...it's that we weren't discussing it at all until you came on all huffy puffy about how we didn't know what we were talking about and were a waste of time just because you've come onto a thread and started arguing a point that not only has no one disagreed with you about, but which wasn't even part of the discussion we were having. It's irrelevant to make points about "you and horatio are forgetting one big thing...we would get the gross of our paychecks"...when the elimination of payroll or personal income taxes wasn't part of the discussion. Of course we haven't mentioned it...it's irrelevant to the discussion we were actually having about corporate income taxes.
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Deleted
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Post by Deleted on Apr 25, 2011 15:46:01 GMT -5
"Why the need to jack up sales taxes?" That was another poster's suggestion for how to compensate for lost revenue through the elimination of the corporate income tax. That's why I said the 25% number was just plucked out of the air. The poster who suggested it did so in an effort I believe to make the tax more up front to consumers who would then presumably hold their government officials more accountable (in theory). Did you read the thread? Or just started posting pretending that we were talking about the "fair tax" when we werent? Have you read the thread? Do you even know who brought up the 25% tax? It was the same person you're bickering with about not knowing what they are talking about yet your clinging to the 25% tax statistic without even paying attention to formexpat!
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formerexpat
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Post by formerexpat on Apr 25, 2011 15:49:19 GMT -5
No, the poster was responding to the post where you said:
I posted, in addition to Phil, to say, yes that is EXACTLY what would happen. Now, you've spent the past 20+ posts questioning business theory and operation. Sorry, but your theory that company CEOs conspire together to keep prices [and therefore margins] high on a grand scale, is inaccurate.
There is kind of this thing called the Sherman Antitrust Act that makes it a federal offense.
To steal a sentence from you, Did you read the thread?
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hoops902
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Post by hoops902 on Apr 25, 2011 16:00:16 GMT -5
"Have you read the thread? Do you even know who brought up the 25% tax? It was the same person you're bickering with about not knowing what they are talking about yet your clinging to the 25% tax statistic without even paying attention to formexpat! "
I do, can you show me where in that post he advocates a 25% tax to replace ALL TAXES, and not just the corporate income tax...here I'll copy it to make it easy since you don't read posts.
"Why not eliminate corporate taxes and have McDonalds sell that patty for $0.71 and then have a national sales tax of 25% [or 23%] instead of corporate taxes?"
"Sorry, but your theory that company CEOs conspire together to keep prices [and therefore margins] high on a grand scale, is inaccurate."
This would be a great argument if I'd mentioned anything about them conspiring.
"Do you even know who brought up the 25% tax?"
Yes, Expat did. You don't think that's plucked out of the air? YOU said that we only need 23% sales taxes to replace ALL taxes, corporate, personal, payroll, etc. If we only need 23% to replace ALL taxes, than saying we need 25% to replace only corporate income taxes sure does seem plucked out of the air. Unless ExPat MEANT 25% to replace all taxes, and only said corporate taxes...in which case i can hardly be held responsible for his inability to write in a coherent fashion.
So are you supporting ExPay in his claim that elimination of "corporate income taxes only" necessitates a 25% federal sales tax? That wouldn't bode well for your claims that we can replace ALL taxes with only 23% would it?
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Post by Deleted on Apr 25, 2011 16:13:11 GMT -5
"So are you supporting ExPay in his claim that elimination of "corporate income taxes only" necessitates a 25% federal sales tax? That wouldn't bode well for your claims that we can replace ALL taxes with only 23% would it?" - hoops902 See....now I know you haven't read the thread if you think I brought up anything about replacing ALL taxes with a 23% fed sales tax. That was also expat (Post #46 just so you can check) saying that the number thrown around by the FAIR TAX people is generally around the 23% mark........but by all means.....as none of my posts are edited please show me (other than the first line of this post where I'm proving you wrong) where I put anything about 23%. I'll be sure and hold my breath........
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Post by Deleted on Apr 25, 2011 16:20:39 GMT -5
"So are you supporting ExPay in his claim that elimination of "corporate income taxes only" necessitates a 25% federal sales tax?" - hoops902
To answer your question: From what I can gather....ExPat can let me know if I'm right or wrong on this.....ExPat is suggesting elimination of the corporate income tax and suggesting we go to a flat tax or fair tax, which would in essence eliminate all federal income taxes (doesn't eliminate state income tax) and replacing the income tax system with the 25% National Sales Tax (flat or FAIR TAX). If this is what ExPat is referring to, then yes....I'm on board.
If we are just eliminating corporate taxes...leaving income taxes the same and then adding a 25% national sales tax to goods, then no.....that's ridiculous.
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formerexpat
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Post by formerexpat on Apr 25, 2011 16:21:24 GMT -5
No fair, you always win, Horatio.
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Post by Deleted on Apr 25, 2011 16:22:35 GMT -5
Did either of you read the thread? I think it was decided long ago that I won the argument, so you two are arguing for nothing as I already won. So ha, ha! Interesting theory! How do you win an argument when you're telling the person you're quoting they are wrong?
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fairlycrazy23
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Post by fairlycrazy23 on Apr 25, 2011 16:24:07 GMT -5
Well, all the fine details aside, I think the bottom line is that businesses are going to pass there expenses on to the consumer, and this includes taxes, the people including the poor are paying it. Eliminating corporate taxes would level the playing field between the big multinational companies with armies of accounts and lobbyists, and the small businesses that don't have the same resources.
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hoops902
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Post by hoops902 on Apr 25, 2011 16:27:27 GMT -5
"See....now I know you haven't read the thread if you think I brought up anything about replacing ALL taxes with a 23% fed sales tax."
YOU brought up the fair tax in your insistence that we'd all be getting the gross of our paycheck. The fair tax proposal is to eliminate all taxation and replace with a 23% sales tax. I realize you never said the number "23%", you just brought up the fair tax, which is the same thing. Now I have to educate you on what the proposals you bring up actually include.
I apologize, I assumed that when you brought up the fair tax you actually understood the proposal and that it called for a 23% federal sales tax. In hindsight I realize you apparently had no idea what hte "fair tax" proposal actually was, which is apparently why you were so confused about the relationship between 23% and the fair tax. I was trying to give you credit for using terms you actually understood, i apologize.
"saying that the number thrown around by the FAIR TAX people is generally around the 23% mark"
yes, and that's why his number is plucked from the air at 25%, I was trying to be nice and not say "his 25% number just shows how he has no understanding of the basics of math". since the 23% the fair tax people claim isn't remotely close to the number to replace only corporate taxes.
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Post by Deleted on Apr 25, 2011 16:35:17 GMT -5
"See....now I know you haven't read the thread if you think I brought up anything about replacing ALL taxes with a 23% fed sales tax." YOU brought up the fair tax in your insistence that we'd all be getting the gross of our paycheck. The fair tax proposal is to eliminate all taxation and replace with a 23% sales tax. I realize you never said the number "23%", you just brought up the fair tax, which is the same thing. Now I have to educate you on what the proposals you bring up actually include. I apologize, I assumed that when you brought up the fair tax you actually understood the proposal and that it called for a 23% federal sales tax. In hindsight I realize you apparently had no idea what hte "fair tax" proposal actually was, which is apparently why you were so confused about the relationship between 23% and the fair tax. I was trying to give you credit for using terms you actually understood, i apologize. "saying that the number thrown around by the FAIR TAX people is generally around the 23% mark" yes, and that's why his number is plucked from the air at 25%, I was trying to be nice and not say "his 25% number just shows how he has no understanding of the basics of math". since the 23% the fair tax people claim isn't remotely close to the number to replace only corporate taxes. I said something along the lines of the FAIR TAX. Believe me...I don't agree with everything in the FAIR TAX.....although as a whole I do like it. I've also never said I agree with 23%....I personally think it needs to be higher than that if we were to use it (~25% to 28% if we want to reduce our trillions in debt). I also don't think we will ever use it because our current tax code gives to much power to the politicians and, by extension, the IRS. Powers a hard thing to let go of. Edit: Actually I wasn't the first to bring up the Fair tax or flat tax....but don't let facts get in the way
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formerexpat
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Post by formerexpat on Apr 25, 2011 16:39:17 GMT -5
Yes, Texan, this is what I was getting at but my initial post to Hoops post was to illustrate that yes, prices would in fact come down. I thought it was irrelevant that the replacement percentage that I used was an all in figure since his post initially just said, to paraphrase "do you think if the corporate taxes were reduced to 0% that they would reduce prices or just keep the money as profits".
I was trying to keep it simple since it was evident that we were already working with a learning curve. While I initially used 25% for illustration purposes, I did put 23% in brackets since that is the fair tax equivalent to revenue break even. I didn't know that 2% would cause panties to be twisted. I also figured that most knew that this was all interconnected and that changes would / should be made in combination.
I now know that I cannot make such assumptions on a money board.
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fairlycrazy23
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Post by fairlycrazy23 on Apr 25, 2011 16:43:04 GMT -5
It depends on whether you describe the fair tax as inclusive or exclusive, since the embedded tax is inclusive that is how the fair tax is described 23% inclusive tax, but it could also be called a 30% exclusive tax.
Some numbers rounded
Embedded price $100, includes $23 of embedded taxes, 23 is 23 percent of 100 Fairtax price $77 dollar + $23 in fair tax = $100.00, 23 is 23 percent of 100,
But $77+ ($77*.30=$23) = $100, so 30% sales tax.
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hoops902
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Post by hoops902 on Apr 25, 2011 16:43:28 GMT -5
"While I initially used 25% for illustration purposes, I did put 23% in brackets since that is the fair tax equivalent to revenue break even. I didn't know that 2% would cause panties to be twisted."
Whether you used 25 or 23 percent is irrelevant. You used it specifically referring to replacing the corporate income tax...not all taxes. You can have the 25 or the 23, both are similarly ignorant. I'm sorry you like to toss around numbers and phrases without actually knowing what they mean.
That seems to be your MO from the rest of your posts around the board though. Tossing around words you don't understand, numbers which are amazingly ignorant, and then pretending once caught that you just assumed everyone would "just know" what you "really meant".
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