Prior to the tax removal, my 90 dollar income would not pay for the 100 dollar car. After the tax removal, my 90 dollar income might pay for the car if the company responds to tax cessation by reducing it's price to 90 dollars.pigdog's response:
That's quite a good observation that some of the Status Quo folks on the thread certainly miss.Quite wrong.Quite right.
Someone missed something alright. Both of you... You both missed the 30% tax on the $90.00 price making the total cost what was $100.00 after tax would now be $116.88 after tax.
No, Looey - the poster has the right idea. Since no one at this point is certain what the final price might be (the reader assumes a 10% drop - but that may be low), the selling price is obviously going to drop. An $nn.nn car would include the tax inclusive amount in the price - that's the convention used in giving the buyer a receipt.
The way you Squirrels are drifting on these last couple of threads it sounds as though you are now arguing that ALL income tax (wage-earners as well as businesses) will be removed from pricing. That (if true) would probably make any price drop more than 10% since, keep in mind, the revenue neutral rate is 23%.