Quote:
Originally Posted by DateDoc
Let me see if i can explain this so you can understand it.
Year 1 - Company A makes $100k in pre-tax net revenue.
Taxes are at 25% so Company A pays $25k in taxes and nets $75k post-tax.
Year 2 - Govt raises taxes and taxes go up to 30%.
Company A (knowing taxes will be higher) raised the price of what it sells by 10% and has a pre-tax net revenue of $110k (it would in fact be higher but I will spare those details for you).
30% taxes are $33k yielding a post-tax profit of $77k.
Company A actually made more $$ and paid the higher tax rate. Oh wait, they passed the taxes on to the consumer. The fact that they can do this is because all other companies will too.
|
Don't forget to add in the cost of Pizzer being delivered will go up 10%. The cost fly will go up and anyhing made from plastice will go up !
But wait the increased tax won't be passed on to us ?