3 ms·

I'm guessing a 2-7% tax is on the low side of such balance.

• JumpCrisscross 7y ago
  > 2-7% tax is on the low side of such balance A 7% tax on revenues is a 50% tax on a business with a 14% margin. It's even more damaging when one considers start-ups, who run negative profits in their early years. (Seven percent is thus eleven months of runway in the Czech Republic for every 12 months a German competitor gets.) Seven percent is generally prohibitive to low-gross margin business, e.g. any tech company producing physical devices or doing anything next to retail. It thus compresses an economy's accessible tech sector to enterprise businesses. If these taxes remain confined to ad-driven businesses, that's a fair tradeoff. But given Europe's penchant for over-encroachment, it could very easily be over-applied. TL; DR Top-line taxes transfer wealth to high-margin businesses over low-margin businesses and from start-ups to incumbents.
• microcolonel 7y ago
  The tax is on revenue, so the thinner your margins, the more extreme the tax. Another reply here says that a 7% revenue tax is a 50% tax on a 14% margin transaction, but it's even worse than that, since the tax is on the whole revenue, including your margins.