Imagine a world where there is no corporate tax. Apple does a price analysis and decides the profix maximizing sales point of a phone is $1,000. They price the

Imagine a world where there is no corporate tax. Apple does a price analysis and decides the profix maximizing sales point of a phone is $1,000. They price the phone at $1,000. Then, a 10% corporate income tax rate is put in place. Does Apple raise the price of the phone to $1,100? Is that now the profit maximizing decision? According to your claim "Ultimately, only people pay taxes," the answer is yes - Apple would immediately raise the price of the iPhone to offset the loss incurred by the new tax. Except that then, fewer people would buy iPhones. We already know that $1,100 is not the profit maximizing price point for a phone. So, the amount Apple would increase its price is a function of the price sensitivity of iPhone buyers. This is a little tricky to explain, but khan academy has a video that explains it quite well. https://www.khanacademy.org/economics-finance-domain/microeconomics/consumer-producer-surplus/deadweight-loss-tutorial/v/taxes-and-perfectly-inelastic-demand https://www.khanacademy.org/economics-finance-domain/microec...