Why wouldn’t corporations include corporate income tax expenses when pricing its products?
Posted on October 9, 2008 by admin
supercop13x asked:
In college I learned that businesses considered all expenses (i.e. wages, energy, rent, etc.) when determining how to price their products. I assumed taxes would also be considered, but most people I talk to seem to consider corporate taxes as taxes on “the rich”. However, if corporations include tax expenses in the price of their products; wouldn’t the middle-class and poor pay the majority of these taxes?
If the middle-class and poor do bear the brunt of corporate taxes, isn’t this a deceptive and hidden tax against them?
In college I learned that businesses considered all expenses (i.e. wages, energy, rent, etc.) when determining how to price their products. I assumed taxes would also be considered, but most people I talk to seem to consider corporate taxes as taxes on “the rich”. However, if corporations include tax expenses in the price of their products; wouldn’t the middle-class and poor pay the majority of these taxes?
If the middle-class and poor do bear the brunt of corporate taxes, isn’t this a deceptive and hidden tax against them?
It could be, many businesses price their products on how much they had to buy the merchandise for, thats what we do in my business anyways. We mark the prices depending on how much we spent on it and how much it is going to take to make profit. I think that the taxes on the rich could not include businesses because they make so much money, in revenue but they never look at the aftermath of taking care of wages, utilities and such.
a tax on a supplier would shift the supply curve to the left…i.e, it would lower supply. The incidence of the tax, i.e, who pays it, is determined by elasticity. Meaning this, the party with which has the best alternative pays the least of the tax. The burden of tax’s is shared by the supplier and demander. It’s just a matter of their relative substitutes to determine the incidence. This means that you can’t tax the rich. The rich are corporation owners and in essence the buyers of their product will pay part of the tax.
Yes it is. ALL costs are passed on to the consumer. There is no such thing as a free lunch. All monies spent on defense, airports, highways, hospitals etc. (EVERYTHING) is passed on to the individual workers or tax payers. Governments simply do the buying and redistribution of every-ones money. That is why governments should always be kept to a minimum size.