“Companies don’t pay taxes. They raise prices to offset taxes.”
Everybody always says this. Companies will raise prices to offset taxes IF THEY CAN but that depends on the elasticity of demand for the product. Some products, if they raise prices, consumers will stop buying or find alternatives for. Then their choices are to cut costs or lose money.
True, but try this small change to see some equivalency,
Companies Governments will prices raise taxes to offset taxes spending IF THEY CAN but that depends on the elasticity of demand for the product.
So much of government spending is vote buying. High SALT states are spending on the backs of the federal taxpayers. As taxpayers leave their states (elasticity?) they howl and try to blame the feds.
Ichabod1 replies:
Everybody always says this. Companies will raise prices to offset taxes IF THEY CAN but that depends on the elasticity of demand for the product. Some products, if they raise prices, consumers will stop buying or find alternatives for. Then their choices are to cut costs or lose money.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Thank you very much, Ichabod1, for inserting the science of economics where it is much needed.
Those of us who have been involved in product/marketing/pricing decisions are fully aware the the price elasticity of demand is a REAL THING--a very predictable and dependable result of price changes in the marketplace.