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It boggles my mind that otherwise intelligent people have a hard time grasping this simple concept. Taxes are simply another cost of doing business, especially if they are applied to whole categories.

Even if they are applied to specific companies (to favor domestic companies, for instance), then they still have largely the same effect, since they allow the domestic competitors to compete in the market inefficiently, raising prices on the consumer.

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It's easy to understand that taxes are simply a cost of doing business, but intelligent people disagree that prices would decrease with any certainty if taxes were cut.

Companies don't set prices for products to achieve some specific return, they set prices at the highest point the market can bear. Cutting their tax rate doesn't have any impact on the greater market, so it's unlikely that prices would move at all. The more likely outcome is that owners and shareholders would see higher profits -- which definitely isn't a bad thing, but it's a very different proposition than a general price decrease for consumers.

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