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Comment by Shivetya | Hacker News Reader

Funny how the say banks and multinationals will pay, I really think they should in turn put on every receipt how much the end consumer is actually paying in tax, all under the idea of disclosure.

Food places like starbucks and McDonalds they could put it next to the mandated calorie count. This sandwich will cost 400 calories and 40 cents in built in taxes and twenty cents in sales taxes.

People really need to understand just how much they are truly taxed, far too many see only the sales tax and not many more understand payroll. Indirect taxes is the big skeleton in the closet.

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The tax incidence of profit taxes falls pretty much entirely on the shareholders. The consumer is unaffected.

Companies that have their profits taxed at higher rates would sure LOVE to raise their prices to compensate for lost profits, but a little thing called competition prevents them from doing so.

>People really need to understand just how much they are truly taxed

Indeed. The level of tax literacy and misunderstanding among the general population appalls me sometimes. I can think of at least one example right now...

> The tax incidence of profit taxes falls pretty much entirely on the shareholders. The consumer is unaffected.

Well, only if you believe profits aren't used for anything except dividends. The "consumer" can be affected when they don't get new products, or existing products are worse, or when they fail to be hired as an employee, etc.

Theoretically if the profit tax approaches 100% then nobody will form companies because what's the point?

Rest assured, though, the levels we are discussing here will have zero effect on Starbucks' ability or desire to bring us new pumpkin vanilla spice lattes every winter season.

If the incidence of the tax doesn't fall on consumers it doesn't necessarily fall entirely on shareholders. You would expect the incidence to be shared between workers and shareholders.

Incorrect. It's just shareholders. The market value of labor is unaffected by the level of profit tax.

<quote>The market value of labor is unaffected by the level of profit tax.</quote> Only if you can guarantee that changing levels of profit tax would not cause any wide scale lay-off or hiring sprees that would certainly effect labor market saturation and thereby the market value of labor.

I guarantee that Starbucks and Google will not be pulling out of the UK if they do raise these rates to the proposed levels (or even higher). It would be cutting off their nose to spite their face.

Taxes are often based on profits, not sales. Profits are reduced by costs. Costs can be marginal costs (eg. the money McDonalds spent buying the contents of your sandwich) but they can also be fixed costs (eg. the cost of constructing the building housing the McDonalds you're buying from). Whether you buy the sandwich or not, the fixed cost remains the same.

So because the taxes paid end up being based in part on the fixed costs, it isn't really possible to determine what amount of tax is based on the sandwich you just bought. It depends on how the cost of the building (for example) is apportioned amongst all the sandwiches they sold. Along with everything else they do that makes money.

"how much the end consumer is actually paying in tax"

None? In AdWords auction model it is supply and demand that determine prices, not whatever Google wants to charge. It's just that now Google will have to pay some of that back as taxes.

And McDonalds is not there - they already pay whatever taxes they have to for serving you a physical burger. And yes, it is present in my receipts from McDonalds. So I know how much taxes I paid.

>>"how much the end consumer is actually paying in tax"

>None?

You misspelled "all."

You'd have difficulty accurately calculating it on a per-item basis, and chances are it'd be a PR nightmare like the time restaurants in Florida tried to charge for ACA compliance. http://money.cnn.com/2014/02/27/news/economy/obamacare-resta...

Not really. McDonalds can't charge a price that is much higher than local companies (i.e. companies that are both based in and operate in e.g. the UK). If they both operate with equivalent efficiency, they should both have the same profit margins. The difference is then only the fact that McDonald's shareholders are not charged for the tax on corporate profits, while the local company's shareholders are.

Tax is included in receipts in Canada, especially since the tax usually isn't in the price listed on the shelf.

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