3 ms·
Taxing on gross is bad when your value add is simply integration. In the case of building computers - you take a bunch of components from individual producers,
by juan_juarez 14y ago
Taxing on gross is bad when your value add is simply integration. In the case of building computers - you take a bunch of components from individual producers, slap them together & call it a new product. The actual work done is very little & the margins are small but the total cost of the finished product has to reflect the cost of the components. Putting $10 of labor and $5 of infrastructure to make $5 of profit on top of a $1000 device become unfeasible.
Reading the article, they claim an operation like this is an ideal remedy to being "too big" yet their proposed tax plan makes it untenable.