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U.S.A. National Sales Tax (NST) Hoax: “Firms will reduce their prices by 23 percent when NST becomes law”

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The Bill does not require prices be reduced. Firms will not reduce prices.

(1) IMPORTS. The prices of imported products do not have any U.S. taxes built into their manufacturing costs. The prices of imported products will not be reduced.

(2) 1-PERSON and other SMALL BUSINESSES. The average cost of production is higher for these firms (Microeconomics 3301). They will maintain prices in order to pay the 30% NST.

(3) BANKRUPTCY. Firms in bankruptcy cannot reduce prices.

(4) RETURN ON INVESTMENT. Firms that are not earning a high rate of return on investment will not reduce their prices.

(5) PROFIT MARGINS. Profit margins are never too large. Microeconomics 3301 states that “the purpose of a firm is to maximize profits”.

(6) MARKET SHARE. The only time a firm will reduce prices is if the managerial accounting model indicates that if the price is reduced, the resulting reduction in unit profit will be more than offset by increased sales volume and the total profit will be higher.

(7) DECEPTION. Proponents should know prices will not be reduced 23 percent because they give everyone $2,141.30 to pay the NST.

Read an analysis of the Bill on “Citizens for Tax Justice” that was written by another person who also scores high on a test of General Intelligence and on The Test of Critical Reasoning.

Previous notes on the tax: the rate, poverty, low-earners.

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