Quote:
Originally Posted by edslunch
Tax increases on input costs such as property tax also reduce profits. It’s nice to think a business owner can just turn up the volume to 11 to make up for reduced margins but it doesn’t work that way.
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Apologies, I conflated volume with demand. Increased demand can offset increased costs. I get that increased taxes don't necessarily equal increased demand of your product but the idea of reducing prices to increase demand isn't a new concept.
Again though I come back to the margins. How many healthy businesses are operating on such thin margins that an increase in taxes is going to necessitate a matching price increase (restaurant industry notwithstanding), especially if doing so hurts their market share?