Quote:
Originally Posted by Enoch Root
The goal, for the owners of any corporation, is to earn a profit, net of taxes.
If you raise taxes, they need to raise prices to compensate (or have reduced earnings). Keep raising taxes, and they are forced to raise prices beyond being competitive, or not make any net profit.
Either way, you've taxed them out of existence.
The best you could hope for is that you've created hyper inflation.
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The market is always going to dictate prices far more than taxation will. It's the reason prices don't go down when taxes do.
Increased volume can also make up for reduced margins. It's not like a lot of these companies are operating on such slim margins that a 2-5% tax hike is going to necessitate a price increase.