4 ms·

If you think businesses will lower prices if taxation is removed, I think you're far off base.

by greedo 4y ago

SoftTalker 4y ago
If they are in competitive markets they will have no choice. If they are monopolies that's a problem regardless of tax policies.
- PaulDavisThe1st 4y ago
  Can you cite any known examples of reductions in some kind of non-explicit tax leading to reductions in prices (other than in cases where the tax is an explicit component of total cost, such as airline ticketing (at least since 2001)) ?
- greedo 4y ago
  Imagine a spherical cow. Markets are rarely competitive in a true sense. There are moats/barriers to competition, there's friction for users to switch to a different product. Companies often collude to keep prices static, or use a ratcheting mechanism to increase prices permanently[1]. [1] My trash removal company instituted a fuel tax 6 months ago when diesel was at an all time high. Diesel is now $.09 cheaper per gallon. Has the trash company stopped the surcharge? I'll leave it to your imagination. Oh and there are 5 trash companies in my area. They all charge within $.50/month for their service. I'm sure that's just the result of a competitive market.
  - SoftTalker 4y ago
    Diesel fuel has gone up a lot more than $0.09 per gallon in the last year or two. It's close to doubled in fact, maybe more in some areas. Yes in competitive markets you'd expect the pricess of commodity services to be close to the same. There isn't much differentiation other than price for something like trash removal. People will naturally choose the cheapest option. So all the services will cut their prices to the point where they will making their minimal acceptable profit. Of course it's possible that the trash services are colluding to maintain higher prices. That's illegal, but it probably happens especially in something like trash removal where there's a history of corruption and the people involved all know or are related to each other.
    - greedo 4y ago
      Actually diesel in the US has had pretty stagnant prices the last four years. The big drop in 2020 (due to COVID wiping out demand) skews the averages and the Russian invasion of Ukraine has driven this year's prices high. But it's still $.09 cheaper than when my trash hauler instituted a "fuel surcharge." 2018 - 3.178 2019 - 3.056 2020 - 2.551 2021 - 3.287 2022 - 5.013 https://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm https://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm

If you think businesses will lower prices if taxation is removed, I think you're far off base.

by greedo 4y ago

If you think businesses will lower prices if taxation is removed, I think you're far off base.

If they are in competitive markets they will have no choice. If they are monopolies that's a problem regardless of tax policies.

PaulDavisThe1st 4y ago
Can you cite any known examples of reductions in some kind of non-explicit tax leading to reductions in prices (other than in cases where the tax is an explicit component of total cost, such as airline ticketing (at least since 2001)) ?
greedo 4y ago
Imagine a spherical cow. Markets are rarely competitive in a true sense. There are moats/barriers to competition, there's friction for users to switch to a different product. Companies often collude to keep prices static, or use a ratcheting mechanism to increase prices permanently[1]. [1] My trash removal company instituted a fuel tax 6 months ago when diesel was at an all time high. Diesel is now $.09 cheaper per gallon. Has the trash company stopped the surcharge? I'll leave it to your imagination. Oh and there are 5 trash companies in my area. They all charge within $.50/month for their service. I'm sure that's just the result of a competitive market.
- SoftTalker 4y ago
  Diesel fuel has gone up a lot more than $0.09 per gallon in the last year or two. It's close to doubled in fact, maybe more in some areas. Yes in competitive markets you'd expect the pricess of commodity services to be close to the same. There isn't much differentiation other than price for something like trash removal. People will naturally choose the cheapest option. So all the services will cut their prices to the point where they will making their minimal acceptable profit. Of course it's possible that the trash services are colluding to maintain higher prices. That's illegal, but it probably happens especially in something like trash removal where there's a history of corruption and the people involved all know or are related to each other.
  - greedo 4y ago
    Actually diesel in the US has had pretty stagnant prices the last four years. The big drop in 2020 (due to COVID wiping out demand) skews the averages and the Russian invasion of Ukraine has driven this year's prices high. But it's still $.09 cheaper than when my trash hauler instituted a "fuel surcharge." 2018 - 3.178 2019 - 3.056 2020 - 2.551 2021 - 3.287 2022 - 5.013 https://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm https://www.eia.gov/dnav/pet/pet_pri_gnd_dcus_nus_a.htm