“The businesses pass along any tax as a cost of doing business.”
People say that all the time, but there’s a huge problem with it. A monopoly could sure pass along any tax increase, or any other increase in expenses. But in a competitive economy, what if one producer of a good or service is much more efficient than another producer of the same good or service? The inefficient producer probably can’t pass along tax increases because the increased price would make him less competitive, or non-competitive with his more efficient competitor.
Can a corporation also, automatically pass on all increases in salary and wages, in material or raw material costs, and all the other expense of doing business.
It’s a myth, or a half-truth at best, that any and every increase in business operating expenses can be passed on to the consumer.
And, also, if taxes increases can be passed on, on and on, why all talk about reducing corporate taxes? How would that make corporations more competitive if they can just pass the increases on?
They can’t just pass the increases on automatically.
Perhaps not automatically but a company must be profitable or in the end it dies. If taxes are increased 10% then either the company eats the increase in expenses by cutting their bottom line or else sheds employees, charges them more for their medical, fore goes raises or something else to make up for the attack on profits caused by an increase in taxes. In that way the taxes ARE passed along to the consumer in one way or another.