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Because there are a number of thin-profit margin industries that wouldn't exist if you taxed revenue. You'd see more dollar marts and less grocery stores, for
by bduerst 7y ago
Because there are a number of thin-profit margin industries that wouldn't exist if you taxed revenue. You'd see more dollar marts and less grocery stores, for example.
- pwinnski 7y agoMore realistically, the price of everything in grocery stores would go up by the amount of the tax, as would the price of everything everywhere else. It's not clear that this would change much for most grocery stores: their own profit margins would remain the same. It would make things harder for the poorest customers, but many of them are already stuck with less-than-ideal higher-margin options for groceries.
- bduerst 7y agoNo, it would not. Consumers are price sensitive for food, and profit margins are not the same across different types of substitute goods. It's precisely how Dollar Trees and Dollar Generals have been pushing out grocery stores in the US right now, by not offering fresh produce, meat, or other traditional loss items. Planet Money even has a podcast on it: https://www.npr.org/sections/money/2019/04/26/717665452/episode-909-dollar-stores-vs-lettuce https://www.npr.org/sections/money/2019/04/26/717665452/epis... Imagine the grocery store in your area carrying only frozen and canned meat and produce, because that is what it would push.