Your first point is obviously correct. Your second point, quite frankly, sucks. Businesses always figure tax consequences into pricing. So everyone in the market place will act accordingly.
Know that I still love ya. I look forward to your response.
5.56mm
Businesses always figure tax consequences into pricing.
Wrong-O....
They have no way of knowing what they're tax obligation will be because they do not know if their sales volume will place them above their "break even point." If they make a profit, then they have income tax obligations. But not if they operate at a loss.
And since they have no idea what their income tax obligation will be, there is no-way to pro-rate it into their cost structure prior to the sale. If they try it that way, a competitor will undercut their price with a bid that steals away the sales volume.