🚀 go-pugleaf

klassen@sol.UVic.CA (Melvin Klassen) writes:

>>The idea that if corporations are taxed, somehow consumers will get off the
>>hook is absurd.  
>>Obviously corporations will pass the cost of new taxes on to consumers.  
>
>This is obvious only when the corporation has what the economists call 
>an "inelastic" demand for their products.  For example, foods like milk,
>and ICBC insurance for a taxi-driver, basically have an inelastic demand.
>
>If the demand for the product is "elastic", e.g., $8.50 per person for a 
>movie at the cinema, then the consumer can choose to consume less, 
>i.e., wait for it to come out on video, and then rent it for $5.00 per family.
>In this case, the corporation must examine their financial books,
>balance the increased fees against decreased demand, and see how it 
>affects the bottom line -- the "profit" or "return on investment".

True enough - I guess my ECON 101 is a little fuzzy.  I was trying to make a
more general point however.  That is that people cannot somehow expect to
extract money from corporations the way they might mug someone.  Corporations
are not an open source of cash that will passively endure increased taxation -
they pass everything back to the consumer eventually.  In the case of people
choosing to rent videos, they do pay a price for this choice: they have to
watch movies on a small square screen.

Ken Buckland
kenb@ee.ubc.ca