7 ms·

This is completely illogical. The reason you're earning more money is simply because you are giving away less to the government - not because your actual costs

This is completely illogical. The reason you're earning more money is simply because you are giving away less to the government - not because your actual costs change in any way whatsoever. This has nothing at all to do with labor costs. You can apply the exact same logic to absolutely anything. E.g. if your cost of materials increases by $20 instead of your cost of employees. This doesn't mean you're paying more, or less, for these materials - simply that are not obligated to give away as large a share of your profits from any change in costs.

trhway 8y ago
>You can apply the exact same logic to absolutely anything. Of course. See my other post where i mention capital investments for example. > E.g. if your cost of materials increases by $20 instead of your cost of employees. yep. in case of 20% tax the net cost of the materials is $16, in case of 30% - $14. >This doesn't mean you're paying more, or less, for these materials - simply that are not obligated to give away as large a share of your profits from any change in costs. call it any way. In the end paying $20 for materials results in $16 decrease to the resulting after-tax business profit in one case and $14 decrease in another. Thus the materials became $2 more expensive to the business.