
Originally Posted by
FastMan
Really, FastMan? How would that work?
Well, FastMan, with a consumption tax the price the consumer would have to pay for domestically produced goods would change very little. The producer would be able to drop the price of his goods because he/she would not have to charge for the cost of taxation he/she was burdened with before. They could drop the price of the product and still end up with the same amount of bottom line profit. For the consumer, the consumption tax added on at the store would bring the end price of the product being bought back to about the same level it was in the old system.
But FastMan, how does that help the domestic producer compete with oversees producers?
Think about it, FastMan. The oversees producer is still burdened with the corporate tax imposed by their country, which he/she has to account for in the price they charge for the goods they produce. Say their nations corporate tax rate is 20 percent. That's an extra 20 percent fixed cost they have to tack on the price of their product that the American producer does not have to do. Advantage our guys!
Cool, I get it. Thanks FastMan!
No problem.