Viper1 said:
The higher price doesn't shrink their profit margins unelss they don't raise the price an equivelant to match the higher tax. And if they did dip into their profit margins, investors would drop stock pretty damn fast. As for employees demanding a higher pay to offset an increase in income tax, go ahead and try that one. Keep in mind that it wasn't your employer that raised your income tax so I doubt they'll be sympathetic enough to give you a raise. Just also keep in mind they may raise prices to compensate for the higher employee pay. And also, be sure that the pay raise doesn't bump you into a higher tax bracket...you'd actually make less money then. And the free market doesn't prevent anyone from raising prices, it just ensures that lower prices are in their best interest. |
Supply and demand, and supply and demand ALONE determines what sets prices, nothing else. A business, if they can get away with charging more, will do this. Same thing goes with employees and so on. Doesn't matter if college education goes up, people can't get more money, if the market doesn't allow it. Doesn't matter either if your cost of gas goes up. Same thing with taxes. Unless it is applied to everyone evenly across the system, like you see in sales tax, it may ormay not show up in higher prices. And your comment about moving into a higher tax bracket means you get less money is BS. You get more money, just the rate you get it decreases. And in business, people will hustle, irregardless of what the rate is, because you always fight to maintain a profit, and you can never tell tomorrow what is going on.
What happens, if you want to argue about increase in taxes causing a rise in prices, ONLY if the rise in taxes causes companies to go out of business, and there is less supply. At that point, prices will go up, as supply goes down. Otherwise, businesses have to find ways to increase profits, that doesn't affect their operations and ability to make money.
