[the other guy]

I had this in another thread but wanted to start it on its own.

Try to follow I will keep it simple. Joe has a hot dog stand. He sells hot dogs for $1.00. Of this $1.00, 10 cents is Joe's profit.

The city decides to place a 10 cent tax on the sale of hot dogs. Well Joe, not being as dumb as the city leaders knows that he can no longer sell hot dogs for a dollar each.

Joe was makng a 10% profit before, so he increases his price to $1.11. But then realizes that due to the increase in price he is now selling fewer hot dogs. So he increases price to $1.15 each trying to stay in busnisss. This seems to work but Joe notices certain poorer customers have stopped coming around.

Of course the city is now receivig less hot dog tax because Joe is selling fewer hot dogs. Of course the city leaders blame this on joe for increasing his prices and increase the hot dog tax to 15 cents. and it all starts over.

1. BUSINESSES DO NOT PAY TAXES THEY COVER EXPENSES, INCREASE IN TAXES RESULTS IN INCREASE IN PRICE.

2. THERE IS A TIPPING POINT, IF THE TAX INCREASES THE SELLING PRICE BEYOND THE MEANS OF CUSTOMERS--THE BUSINESS WILL CLOSE.