Tax breaks to Business get passed on to consumers?

[IBMer]

http://travel.usatoday.com/flights/post/2011/07/airline-fees-tax-holiday/178394/1

The expiring taxes can total $25 or more on a typical $300 round-trip ticket. They died after midnight Friday night when Congress failed to pass legislation to keep the Federal Aviation Administration running.

That gave airlines a choice: They could do nothing — and pass the savings to customers — or grab some of the money themselves.

"We adjusted prices so the bottom-line price of a ticket remains the same as it was before ... expiration of federal excise taxes," said American spokesman Tim Smith. US Airways spokesman John McDonald said much the same thing — passengers will pay the same amount for a ticket as they did before the taxes expired.

This is why tax breaks never work, profit is always #1.

Yes I understand this isn't a real "tax" break, but the taxes are not being collected and will not have to be back paid so it is a type of tax holiday.

 

[BoberFett]

What's really bizarre is that people who believe corporations are so evil that they won't pass tax breaks on to the consumer in the form of lower prices, are apparently so kind-hearted that they won't pass higher taxes on in the form of higher prices.

That said, this whole airline tax break was a stupid idea to begin with.

 

[Pens1566]

Unpossible. I keep hearing it will trickle down.

 

[a777pilot]

All taxes on businesses are paid by the consumers.

 

[halik]

Sounds like they're colluding to me; not the first time that has happened.

 

[IBMer]

What's really bizarre is that people who believe corporations are so evil that they won't pass tax breaks on to the consumer in the form of lower prices, are apparently so kind-hearted that they won't pass higher taxes on in the form of higher prices.

That said, this whole airline tax break was a stupid idea to begin with.

Demand handles tax increase and increase costs.

For an example of this, look at the pizza industry right now. Few years ago, a large specialty pizza from Pizzahut was 12.99? Now you can get any pizza for $10 dollars, the Pizzone was $6 and now is $5. This with the increase in cost for food. Demand controls this because there is a lot of competition now in the pizza industry. This is why tax breaks don't create jobs, if there is no increased demand they will just pocket the change.

 

[BoberFett]

Demand handles tax increase and increase costs.

For an example of this, look at the pizza industry right now. Few years ago, a large specialty pizza from Pizzahut was 12.99? Now you can get any pizza for $10 dollars, the Pizzone was $6 and now is $5. This with the increase in cost for food. Demand controls this because there is a lot of competition now in the pizza industry. This is why tax breaks don't create jobs, if there is no increased demand they will just pocket the change.

So you think if the government levied a $1/pizza tax, every pizzeria would simply eat the tax in the name of competition? Or would prices go up $1/pizza across the board?

In addition, you can still get $12.99 pizzas. $5 pizzas are a different product.

Taxes have nothing to do with competition. Competition is a market force. Taxes are a government force. Apples and oranges.

 

[spidey07]

Sounds like they're colluding to me; not the first time that has happened.

Smells like it, doesn't it?

 

[her209]

All taxes on businesses are paid by the consumers.

All profits by businesses are paid by consumers.

 

[IBMer]

So you think if the government levied a $1/pizza tax, every pizzeria would simply eat the tax in the name of competition? Or would prices go up $1/pizza across the board?

In addition, you can still get $12.99 pizzas. $5 pizzas are a different product.

Taxes have nothing to do with competition. Competition is a market force. Taxes are a government force. Apples and oranges.

I am not talking about the $5 dollar Pizza Mia that they used or still have, right now you can get any pizza anyway you want for $10. That is a direct effect of supply being greater than demand because there are so many successful pizza joints right now, even as food prices are increasing. If a 1 dollar pizza tax was passed, pizza joints would be hard pressed to increase prices as they have been having to steadily lower them as it is and frankly they aren't exactly hurting right now with their CEO making $3,280,352.00 in compensation last year.

And I understand market force and goverment force are different and that they are apples and oranges, so why are they still touting "Job killing taxes"? The fact of the matter is that if demand isn't there, there is no reason for new jobs and business aren't just going to create jobs with all the new money they have form tax breaks they are just going to keep it or give it as bonus's to upper management like they have been the last 30 years.

 

[a777pilot]

All profits by businesses are paid by consumers.

That is also true.

I will say it again, and as often as I can: Income from any source ought not be taxed at all. The same for privately held real property.

Think it through then reply.

 

[JS80]

Sounds like they're colluding to me; not the first time that has happened.

I would hypothesize short term collusion, then race to the bottom with first mover being Southwest (would be a great marketing campaign like their bags fly free slogan).