"Wdtabor" wrote in message
...
In article , "Peter
Gottlieb"
writes:


The result is that taxes most definitely DO affect businesses, and since
they cannot pass along all additional expenses to their customers, part of
the tax decreases their profit and so effectively the business owners DO
pay
taxes (separate from their personal income taxes, that is).


A tax placed on bakers with names starting with the letters A to M could
not be
passed on to the customers because of competition from bakers with
alphabetically later names, but a tax placed on ALL bakers simply raises
the
cost of bread, since there are no alternate sources for the product
unaffected
by that cost.


But it does not necessarily raise the price of bread by the full amount of
the tax. The increased price will reduce demand and to optimize profit the
bakers will absorb some of the increase. But why discuss microeconomics
when there are macroeconomic issues...

The general observation that consumers pay all the taxes paid by their
suppliers is of course completely correct. It is somewhat amazing to
consider the true amount of tax that we all pay when everything is accounted
for.

But tax "reform" can only do so much. You can shift the burden around, and
here you hear the various usual Republican and Democrat arguments for whom
should be paying how much, or you can work at reducing the need for the high
burden, which is more along the lines of what I would prefer. However,
there are a lot of very entrenched self and special interests who do not
want change of the latter type and I doubt that any of the present players
have the true desire or if so, the ability, to cause any significant change.