Friday, January 27, 2012

Homework#2


The question that I have chosen for this assignment is question number two
Imagine you are a business owner in a capitalist society.   Discuss the advantages and disadvantages to lowering business taxes.
Let’s say that I was the owner of a local grocery variety store.
In a capitalist society, this means that all or most of the factors of production are privately owned and operated for profit. What this means for me is that everything I make from owning my business goes towards my own benefit. The advantages of lowering taxes for me as a business owner, is the fact that it will be cheaper for me to run the business. Not only is it cheaper for me to run the business, but I will also be able to make a bigger profit. Due to the fact that there will be fewer taxes deducted from my income I can bring home more money.
With that said, the Government has to make money somehow, if the taxes are not being deducted from me, they are being added to my products. What I mean by this is that the government may increase the sales tax on products. This is bad because I will potentially lose customers, what may have previously cost 1.99 before may be priced as 2.15; any working individual will have a problem with over paying for products. Another disadvantage of business owners receiving lower business taxes is the fact that the citizens would be quite upset. It is not fare for them to pay extra because the Nations deficit has not been made up. Unfortunately someone has to pay for it somehow and often times it is the middle to lower class citizens who have to be the one to pay for it. I can kind of understand where this system is going because without business there wouldn’t be jobs, and there businesses if owners couldn’t afford to keep them open due to taxes.

2 comments:

  1. MArio, i like how you explain what is going to happen when You lower the taxes for busnesses. However i have to say that if the government was to lwer taxes for businesses, and raise them up for middle and lower class citizens, it would only benefit a small group of business owners. If you think about it, it comes out that you will be making more money hence you are paying less taxes, but i think there will be less custiomers at your store. It's because they will have to pay more overall, since the sales tax is to be increased, and for some people that means buying less, or not buying at all. I think if i raised your taxes, as a business owner, you wouldn't really loose as much as you think. At first it might seem like you would have to be making less profit, but then people would be spending more money in your store, since products would be cheaper. what i'm trying to say here is that it wuld actually be balanced out; your business would be better off with more people in the store buying more things since the prices are cheaper, and you paying little more taxes. I think few percent higher taxes wouldn't really hurt a booming business.

    ReplyDelete
  2. Mario,
    This blog is very well done and unique because you gave people a scenario which made it easier to understand the advantages and disadvantages of capitalism. The picture of the grocery store stood out to me because I wanted to read on to see the connection you made between capitalism and a grocery store. I completely agree with how a capitalist society helps businesses strive because the business owners have the freedom to control their profit and the prices of things. The only downfall to a capitalist society is when a business knows they have a unique product and can start overcharging people for their product. There is definitely the advantages and disadvantages to living in a capitalist country but no matter what kind of business ethics your country has.

    ReplyDelete