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>Taxing the phone or the company’s margins should have the same effect, right? Wrong >They’re both costs on apple’s revenue. Hardly. Make zero profit and you
by crdoconnor 9y ago
>Taxing the phone or the company’s margins should have the same effect, right?
Wrong
>They’re both costs on apple’s revenue.
Hardly. Make zero profit and you pay zero tax on that profit.
- mattnewton 9y agoMy argument is that since apple can move the price, if you tax the company they increase the cost of the phone as much as makes sense and eat the rest. If you tax the phone, they leave as much as the increase on the cost to the end user as makes sense and lower the price beyond that, eating it. In neither case are profits or demand going to zero.
- crdoconnor 9y ago>if you tax the company they increase the cost of the phone Raising your prices in response to not making as much profit as you desired is not often a winning move in business.
- mattnewton 9y agoAnd a tax on the phone does this, so they either lower the cost and eat it, or suffer the same fall in demand as when the price of the phone increases to protect their margins.
- crdoconnor 9y agoPerhaps, but a tax on profits does not do this.