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.
“In that way the taxes ARE passed along to the consumer in one way or another.”
That scenario passed the increase along to the company’s employees in the form of compensation or benefits reductions. You pass increases along to the consumer mostly in terms of price increases, or providing less for the same price of packaged goods, as so many food producers have done over the years.
But a company simply cannot pass all increases in costs along to the consumer. That’s a myth in a competitive environment. Consumers can forgo the price increase and find other suppliers, or find substitutes for the product that increased in price to cover increased taxes or other costs. The consumer has choices.
I’ve heard Boortz say this for years and he’s wrong. One caller began presenting this explanation to him and Neal just cut the caller off and wouldn’t discuss it.