Europe's largest economy has flatlined recently, showing no signs of recovery from a winter recession. The International Monetary Fund has predicted Germany will be the only major advanced economy to shrink in 2023.
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.
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.
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.
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.
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.
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.
Tax increases are passed on to the people. Tax cuts are passed on to the wealthy. I’m American so I should know.
Yeah but that’s the specific part where this falls apart.
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.
This happens. 👍 I’m sure of it! Trust the markets, everybody!!! 💰
No one is claiming this is perfect or happens 100% of the time.
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.
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.
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.