Dear SALChamps03,
"Let's say bread costs me 75 cents a loaf at wholesale. I am being taxed at about 23% on my earnings, which raises my cost to 92 cents. Then I mark the bread up 35%, which brings the retail price to $1.24 per loaf."
Not quite.
Your earnings are your pre-tax net profit, not your costs. Not your selling price.
Income taxes are on income, not on revenues. Income = Revenues - All Costs.
If the bread costs you 75 cents wholesale, and your labor costs, rent, everything else, are another 20 cents, that totals 95 cents. If you then sell the bread for a dollar, you make a nickel.
Five cents is your pre-tax profit.
If you pay 35% of the nickel in taxes, that comes to 1.75 cents.
As to the corporate income taxes that supermarkets pay, well, supermarkets have notoriously slim profit margins, thus, they don't pay much by way of income taxes.
For the fiscal year ending Jan 1, 2005, Safeway, Inc. had:
Revenues (sales): 35,822,900,000
Pre-tax profits (earnings, income): 793,900,000 (2.2% of revenues)
Income taxes (federal and states combined): 233,700,000 (0.65% of revenues)
Thus, at least at Safeway, that $1 loaf of bread can be reduced to $0.9935 after reducing the price of the loaf of bread by the amount of Safeway's corporate income tax burden.
As for the 0.65 cent, don't spend it all in one place. ;-)
sitetest
LOL, see my 329 I was typing about the same thing as you were at the same time.