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That's not true. If the cost to produce goods & services increases uniformly for every seller, then the price will increase, unless a merchant is able to absorb

by bhupy 6y ago

That's not true. If the cost to produce goods & services increases uniformly for every seller, then the price will increase, unless a merchant is able to absorb the increased cost to produce the goods & services while maintaining the same price. But if that's the case, then there was already a market inefficiency to begin with.

me_me_me 6y ago
Yes that why we have CEO's and executives swimming in money. Its because their businesses are 'competing'. What you are giving example off is a owner of sugar plant not being able to lower price on sugar and fluctuation in price of sugar beets would kill the business. But that is not a root issue. There is not much money in tax there either. Its the tax dodging monolithic industries that are the problem. And their margins are able to absorb the cost multiple times over.
- bhupy 6y ago
  > Yes that why we have CEO's and executives swimming in money. That's totally orthogonal though. Competitive businesses can absolutely have highly paid executives. All you have to do is run the arithmetic of how much you can reduce the unit price of a mass-produced good/service by dividing all of the highly paid executives' salaries/compensation. The answer is not very much. Consider that Uber is not a profitable business, at the moment, and yet their CEO is compensated $50M. It doesn't take a genius to determine that merely distributing his high salary across the millions of drivers (or software engineers) or even trip riders does close to nothing for the unit economics of the business. > Its the tax dodging monolithic industries that are the problem. And their margins are able to absorb the cost multiple times over. But the tax isn't targeted at "tax dodging monolithic industries", it's universally applied. Not every "digital" company is FANG, there are hundreds of thousands of small SaaS businesses that would be affected too. The distortionary effects are almost always unintended. There is an entire sub-field in economics dedicated to researching "tax incidence" -> https://scholar.google.com/scholar?hl=en&as_sdt=0,33&qsp=1&q=corporate+tax+incidence+%22empirical+estimates%22&qst=ir https://scholar.google.com/scholar?hl=en&as_sdt=0,33&qsp=1&q...

by bhupy 6y ago

me_me_me 6y ago

Yes that why we have CEO's and executives swimming in money. Its because their businesses are 'competing'. What you are giving example off is a owner of sugar plant not being able to lower price on sugar and fluctuation in price of sugar beets would kill the business. But that is not a root issue. There is not much money in tax there either. Its the tax dodging monolithic industries that are the problem. And their margins are able to absorb the cost multiple times over.

bhupy 6y ago
> Yes that why we have CEO's and executives swimming in money. That's totally orthogonal though. Competitive businesses can absolutely have highly paid executives. All you have to do is run the arithmetic of how much you can reduce the unit price of a mass-produced good/service by dividing all of the highly paid executives' salaries/compensation. The answer is not very much. Consider that Uber is not a profitable business, at the moment, and yet their CEO is compensated $50M. It doesn't take a genius to determine that merely distributing his high salary across the millions of drivers (or software engineers) or even trip riders does close to nothing for the unit economics of the business. > Its the tax dodging monolithic industries that are the problem. And their margins are able to absorb the cost multiple times over. But the tax isn't targeted at "tax dodging monolithic industries", it's universally applied. Not every "digital" company is FANG, there are hundreds of thousands of small SaaS businesses that would be affected too. The distortionary effects are almost always unintended. There is an entire sub-field in economics dedicated to researching "tax incidence" -> https://scholar.google.com/scholar?hl=en&as_sdt=0,33&qsp=1&q=corporate+tax+incidence+%22empirical+estimates%22&qst=ir https://scholar.google.com/scholar?hl=en&as_sdt=0,33&qsp=1&q...