Theory, schmeory. Tell me what will happen if his business does not clear enough after-tax profits to justify the investment of time and/or money. (Hint: unless it's a "vanity" business or hobby, the business will fold.)
This is exactly the point I made earlier, and he said, well, not all business fits into the Theory of Perfect Competition so I guess it's possible for you...
Of course I'm no different than the overwhelming majority of other small businesses in that respect.
But just above he said, get this, that income taxes are not a cost, do not affect prices, and for these reasons the income tax is not a disadvatage to our exports...
lol
Theory, schmeory. Tell me what will happen if his business does not clear enough after-tax profits to justify the investment of time and/or money. (Hint: unless it's a "vanity" business or hobby, the business will fold.)The business will fold because it's not making enough profits!?! More FairTax Economics...
But there are NO income taxes to pay.
Seriously though if pricing is not done right then the business generally has no profits and does fold. YOur question merely points out what I have been saying -a business should try to operate at the point of maximum profit which will mean maximum income taxes and maximum after tax income.
Price theory has developed to explain why businesses succeed or fail due to pricing successes and failures. You seem to believe that a business can select any price it wants and still be successful. The income tax is NOT a cost of business but a tax on what is LEFT after the business operates. It does not affect the allocation of resources within the business as do ALL real costs.