That isn't what I meant of course... Anything a company has to write a check for is either an expense, a capital investment, or a dividend to shareholders...
Which of those three would you consider taxes to fall into?
They would try to raise the price (not likely possible because, as stated above, if they could get away with a higher asking price, they would have done so on their own, why not rake in more if you can?) but they might go out of business. With a 90% tax, it's actually likely.
They can't raise prices all by themselves.
This is why Walmart can't just raise their base pay to $15/hr, because Target doesn't have to.
If ALL companies were suddenly forced to do so, then they would all raise their prices.
If all companies are taxed more, prices will go up across the board, just like if the min/wage was raised to $15, or even $50/hr.
If everyone has to pay it, then everything gets more expensive.
No, that isn't what would happen... but thanks for playing...
"Somewhere else" is taxed too, so it'll do you no good. You'll simply have to settle for a level of profit the market can offer, the same as everyone else. Of course, you could sit on your $10 million and let inflation eat it away.
Spoken just like someone who doesn't actually have to deal with that situation...
There are exactly 0 valid reasons why gay couples shouldn't be allowed to get married, that's it, zero reasons, as in absolutely none. Any country or region which bans gay marriage or has to ask if it should be allowed it just a bunch of uncivilized hicks who need to grow up. Marriage is a union of two people who love each other and that is all it is, period
Why just two people? That seems like it discriminates against people who want three people in a marriage...
You maximize profit. the amount of tax you pay on profit is irrelevant to the process of maximizing it. Taxes on inputs or sales can affect prices because they also affect your competitions pricing power. Taxes on profits might encourage more re-investment of profits but they don't affect prices unless, for some inexplicable reason, you have decided to make less money that you could.
No, you don't get it.
If I expected to make $1 million return on my $10 million capital investment, then that is the after tax profit I need to make. The before-tax number doesn't matter. It could be $1 million with no tax or $2 million with 50% tax.
If that means I need to make a $5 million before tax profit to make it, then I will. (assuming you put an 80% tax in place)
The only way to do that is raise prices. If I am unable to raise prices that far, then I'll invest the $10 million of capital somewhere else.
If my current profit is $1 million and you now say it will be only $100K due to new taxes, then either my prices have to go way up, or the product/service won't be offered.
Taxes are on profits, not sales.
Yes, they are... but do this mental exercise...
Imagine if the tax on profits was 90%. Does that mean that all the various companies would keep their prices right where they were and carry on like before?
Or would there be some massive price increases?
If I have $1 million to invest, I expect a certain return on that investment. If the amount taken by the government goes up by too much, I'm either going to compensate for that or go do something else.
Consumers tend to get fed up with this cycle and vote in politicians willing to increase the tax rates as profits go up, which leaves companies facing a choice between accepting the taxes and somewhat lower profits or closing down and accepting zero profit.
Try this mental exercise...
Raise the tax rate to 75% of the corporate profit and see what happens...
Amazon is a publicly traded company, there are expectations of return on capital that it needs to take into consideration.
Now granted, as a dot-com company, it has skirted those for awhile, but that won't last forever. Extend that to more traditional businesses and you'll find that there is a floor to the level of return on investment that investors are willing to accept.
You assume there will always be someone to step in and accept lower profit. Only to a point, beyond which, no one wants to service the market.
Taxes on profits are different than taxes on products
No, they aren't. You've been told they are, you've been lied to that they are, but they aren't.
I've owned a business for more than 20 years, I assure you that taxes are just another expense, just like the utility bill is. It even goes on the books as an expense.
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Yes, yes, you think that if I made $1 million in profit last year and the government wants 30% of that, that it shouldn't raise prices. You'd be wrong.
The "before tax" profit number doesn't mean anything, it doesn't exist. The "after tax" number is the only one that counts.
So in the above case, I made $700k, period. The $300k of tax is just another expense.
If you raise the tax to 50%, then my income goes to $500k.
Now you may say, "well tough, you'll just have to make due with earning less". Nice, but it doesn't work that way. At $500k, the income may no longer be worth the cost of capital investment and it is time to go do something else.
The problem is, the return on capital applies to everyone. If it doesn't make sense for Walmart to do it, then it won't make sense for Target either.
The basic economic principles don't change based on the company.
Just because it's a standard practice doesn't mean it isn't vile behavior. Passing the tax buck along is one of the worst corporate offenses.
You are proof of the poster's point...
If you actually believe that, then you've been hoodwinked by the politicians...
The OP is right, you're wrong. Corporations don't pay taxes, people do, and Citizens United aside, corporations aren't people.
A company has to make a profit to stay in business. Every dollar they pay, be it to the utility company to keep the lights on or the government in the form of taxes, is just an expense.
They must have total income after expenses that is a positive number. It really is that simple.
That's not how pricing works, no matter how much people seem to think so. If they could get away with raising prices they already would have. They don't need the incentive of taxes.
Yes, it is, and you're simply wrong...
Do this simple mental exercise... Imagine if a new gross receipts tax was put into place that said that all businesses had to pay a 50% tax on their total sales...
So... using your logic, prices wouldn't go up?
If they don't, every company would simply go out of business, or at least 99% of them would. Very few companies have that kind of profit margin.
The money has to come from somewhere, and your fantasy utopia "unicorn land" that it will just come from the "rich" and not cost you anything is just that... a fantasy...
That may well be true, I'm not an expert in getting shot.
I suspect it would be over pretty darn quick and I wouldn't feel much.
Well allow me to be more clear...
There is nothing that *I* personally can do about that...
That is probably a good allegory for both sides of the argument. After all, while technically true, how many people do you see carrying emergency parachutes onto their commercial airline flights, and how much good do you think it will do them if something does go pear shaped?
Put it another way... how many people do you see skydiving WITHOUT taking along an emergency parachute?
Yes, frankly... if I had to die and had a choice, firing squad strikes me as more humane than lethal injection.
A dozen people shooting me in the heart with
I of course would prefer neither, but frankly... I think we should offer the condemned their choice of how they wish to go out. Of course I also think we should offer the victim the choice to carry it out, if they wish.
We are not a clone.
