“In that way the taxes ARE passed along to the consumer in one way or another.”
That scenario passed the increase along to the company’s employees in the form of compensation or benefits reductions. You pass increases along to the consumer mostly in terms of price increases, or providing less for the same price of packaged goods, as so many food producers have done over the years.
But a company simply cannot pass all increases in costs along to the consumer. That’s a myth in a competitive environment. Consumers can forgo the price increase and find other suppliers, or find substitutes for the product that increased in price to cover increased taxes or other costs. The consumer has choices.
I’ve heard Boortz say this for years and he’s wrong. One caller began presenting this explanation to him and Neal just cut the caller off and wouldn’t discuss it.
Another way tax increases can be mitigated is by an increase in productivity. Sometimes this takes the form of longer employee hours for no more pay and sometimes it comes from subtle threats of the consequences of NOT bringing about said increase.
I suppose you are correct in saying not every single tax increase can be passed to consumers but given that similar industries are generally taxed in a similar fashion then they are all in the same boat when it comes to being competitive with one another. If A suffers a bottom line hit then so will B. Perhaps the one that has the best cash flow/position and holds out the longest until the competition folds wins. Absent competition prices can safely rise.
There is more then one way to skin a cat.