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Consider a simple supply chain of mining -> transport -> refining -> transport -> assembly -> transport -> retail The reason prices are able to stay relatively
by indubitable 9y ago
Consider a simple supply chain of mining -> transport -> refining -> transport -> assembly -> transport -> retail
The reason prices are able to stay relatively low is because players able to get by with very little profit made up for by enormous quantity. Tax on gross and suddenly you send the profit requirements at every link in that chain way up, and that's going to be reflected (strongly) in the price of the final products.
Even take Amazon as an example as just one link in the chain - the retail. Their total revenue is $136 billion, but their net income is less than $3 billion. Even if they're playing fast and loose with operating expenses, their margins are not huge. Change to gross taxation and they'd have to be. Just to get into the black, you'd see prices raise dramatically from them. And of course the same would be true of all of their suppliers, producers, and so on - which means they'd be increasing not only to compensate for their own increase in costs, but for all the increases that go all the way up the development chain of every product you buy. It wouldn't be pretty.
And corporations, unlike individuals, have another option. They can simply move. Citizens can't do this. Even if they move, they're unbelievably required to continue paying US tax - we're the only nation in the world that requires this of nonresidents. This idea would be devastating to the US.