3 Jun 2025 4:52 pm
Your assumptions are completely inaccurate.LowIQTrash » 35 minutes ago » wrote: ↑ You missed the entire point of my post again and went on a rant about Obama
My arg is this:
1. Inflation is a tax (Presumably you agree)
2. Based on inflation of relatively "sticky" (non-discretionary) items, we can approximate it at 100% over the past 10-12 years (Debatable but I didn't hear you say anything contradicting this, so let's assume this is true for now)
3. Chipotle's menu items have not gone up by 100% over that time period (Fact, go into a Chipotle store to verify)
The difference between Chipotle's current pricing vs what they WOULD charge if they simply passed 100% of the inflationary effect onto consumers is what Chipotle "absorbed" as part of their losses.
Corporate taxes would work the same way, in that Chipotle will not charge something absurd like $16 to offset the losses they would have to pay to the Feds, they would absorb part of the taxes. How much % is debatable, but the notion that "Corporations would simply pass the tax expense onto consumers" is a lie!
It is split between the 2 parties unless the goods/services in question are extremely inelastic (like insulin)
A 100% increase in inflation IS NOT the same as a 100% increase in tax!
Inflation hits ALL sectors of the economy so it's not JUST a tax increase. It increases your costs for labor, for supplies, for raw materials or food and forces all your fixed costs; rent, electricity, gas, delivery charges, maintenance, healthcare insurance, etc., and that leaves you virtually no alternative but to raise your prices accordingly. A singular increase in the minimum wages that a restaurant like Chipotle is forced to pay in California would NOT affect your rent, energy, gas, or most every other fixed costs.
Of course their prices haven't gone up by 100% over that time because not every sector had their expenses increased that amount. For example, if you own your factory outright as I did, you have no rent that can be raised by your landlord. How many thousands of businesses converted from oil to gas as I did when the price of oil shot up over the last 40 years that resulted in LOWER energy costs to the business? How much has technology reduced business costs over that time? I once needed 3 secretaries to handle the billing, purchasing, phone calls, and filing that only needed one secretary years later thanks to the innovation of first the fax machine, and then the computer to do all the billing and filing that took up banks of filing cabinets in the past. You see it in every business now where there were once a dozen switchboard operators needed in a large company to now where voicemail and new phone technology eliminated all that, and even down to the local McDonald's that eliminated many workers by adding kiosks to their store. There are countless other technological innovations that have provided far greater efficiency in production and other services as well, and price adjustments have been made all along. Corporate taxes DO NOT work the same way, and the only thing that prevents them from increasing their pricing for the full amount of the tax increase is knowing what your competition will do. I raised prices many times in my business even though I did not have the same cost increases as much of my competition did, simply because it raised my profits. You can like that or hate it, but it's done all the time.