A “Groceries and Essentials Benefit” is basically a wage subsidy, and you can bet the grocery chains would raise prices by just a little less than the benefit, and if it’s like food stamps in the US, it’ll be chipped away at and rendered humiliating and useless.
We’ve seen this play out with gas tax reductions: resellers know a lot about price elasticity, and any savings from a tax cut gets quickly eaten up by price increases.
Here’s what we could do:
Tax the rich until we can afford to pay for services again
Raise marginal and corporate rates, forcing companies to re-invest instead of hoarding profits
Make stock buybacks illegal
Significantly raise capital gains taxes
(this is tricky) find a way to tax net worth as income
Doesn’t that suggest they’d get more market share by having worse quality, somehow?
Companies do all those things, and not always for good reason, but let’s get our econ 101 ducks in a row a bit. I don’t think it’s because of competition for buyers.
A “Groceries and Essentials Benefit” is basically a wage subsidy, and you can bet the grocery chains would raise prices by just a little less than the benefit, and if it’s like food stamps in the US, it’ll be chipped away at and rendered humiliating and useless.
We’ve seen this play out with gas tax reductions: resellers know a lot about price elasticity, and any savings from a tax cut gets quickly eaten up by price increases.
Here’s what we could do:
I mean, if we had actual competition they’d be forced to pull their prices right back down again competing with each other.
Lowering prices is only one possible outcome of competition though. So is lower product quality, and laying off workers. In general, cutting costs.
Doesn’t that suggest they’d get more market share by having worse quality, somehow?
Companies do all those things, and not always for good reason, but let’s get our econ 101 ducks in a row a bit. I don’t think it’s because of competition for buyers.