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Comment by gus_massa | Hacker News Reader

It's a 3% sale tax on corporations. It's more complicated, but corporations will just increase prices 3% and the consumers will pay it. If you are earning more than 25.000 anualy, you will get a negative total.

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This sounds like the "if you raise minimum wage by $10 then a burger just becomes $10 more expensive" which sounds true but never is [1].

> [2] Despite the different methodologies, data periods and data sources, most studies found that a 10% US minimum wage increase raises food prices by no more than 4% and overall prices by no more than 0.4%.

[1]: https://www.google.com/search?q=effect+of+raising+minimum+wa...

[2]: https://docs.iza.org/dp1072.pdf

The claim would be that prices rise, offsetting the cost to the consumer who are also workers. It does not do much if that is how it shakes out. The stated hope of those arguing for the raise is that the people at the top of the company make a lot of money and that money would be diverted to the workers. While I am sure that happens sometimes, I am not aware of evidence that this is often the case.

The $10 a burger price increase would be a stupid prediction unless the worker just sells one burger an hour and nothing else. If an employee's share of the selling amounted to, say, 10 burgers an hour on average, then a $1 price increase on burgers would counter the wage raise.

I agree. Also, the cost of the burger includes the cost of labor that may be at minimun wage, byt also the cost of the meat and the bread. That includes the salary of the farm workes that may be at minimum wage, but also the salary of the genetic engenneer making transgenic wheat and the salary of the oil field extraction employes that usualy have big salaries.

So the final increase is harder to calculate.

The people receiving $750 are neither all workers nor consumers of the businesses being taxed.

Sure as an aggregate I bet at least one Oregonian is a consumer/worker of any business with >$25M of income but if you don't spend at least 25k ($750 * (1/0.03)) at businesses making over >$25M then you're coming out ahead if prices go up by 3% at _just_ those specific businesses.

If corporations can just increase prices with whatever percent they need to offset some tax, why don't they just increase prices with 5% or 500% already, and pocket the profit, despite there being no tax that requires the increase? Seems like an obvious thing to do, and the incentive is totally there (free profit).

Competition. They wouldn’t be able to do it individually, but they could collude so they all do it. Of course that would be illegal.

I still don't understand why sales tax is so popular instead of taxing on cooperate profits. Sales taxes create all the problems, the tax is passed directly onto customers, and the administrative costs are higher.

Because it's easy to collect, whereas corporate profit taxes have lots of room for creativity.

It is definitely easier to audit profit taxes that has to follow a standard protocol than checking every transaction. Do we expect the auditor to call random customers whether they purchased bread on November 17 last year?

What exactly is easier about auditing profits, when they are the difference between a claimed number (income) and another claimed number (expenses), whereas sales tax is literally printed on receipts?

Thats why you hear about megacorps paying $0 in (profit) tax, but you never hear about anyone "dodging" sales tax.

I think you mean spending more than 25000 (on things subject to sales tax), not earning 25000.

Unles you are hordingypur money in the bank or burning it in the backyard, you are going to buy something that has the tax.

I think you must discount the taxes aplied directly to your salary.

You can also go abroad in the holidays, or perhaps buy online from another state (but they may close the "loophole").

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