• gowan@reddthat.com
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    1 year ago

    Corporate taxes typically get passed onto the consumer under the logic if it costs me .5% more to make a product or provide a service then the price will rise by that .5%.

    By making the cuts across the board this in theory drops the price of domestic goods which should encourage Germans to buy more locally thus stimulating the economy.

    Directed tax cuts might hurt the stimulus so they are aiming wider.

      • gowan@reddthat.com
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        1 year ago

        Except it doesn’t? If your competitor drops the price, because the tax break makes that possible while maintaining the same profit margins, then you are likely to do the same in order to not lose sales.

    • Croquette@sh.itjust.works
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      1 year ago

      People are already paying for these costs increase, so the companies will pocket the tax cut and tout their record profits.

      As we’ve seen after the pandemic when the inflation was soaring, companies rose their prices to keep their margin as they were instead of taking a hit on their profit.

      Under the current state of capitalism, if a company isn’t making the maximum profit, that company is failing.

      • gowan@reddthat.com
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        1 year ago

        If the company could make up for the change in price with an increase in volume they could drop the price. If a competitor drops the price they will likely drop the price at least in theory.

    • Croquette@sh.itjust.works
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      1 year ago

      People are already paying for these costs increase, so the companies will pocket the tax cut and tout their record profits.

      As we’ve seen after the pandemic when the inflation was soaring, companies rose their prices to keep their margin as they were instead of taking a hit on their profit.

      Under the current state of capitalism, if a company isn’t making the maximum profit, that company is failing.