There is diminishing returns on those percentages, but every dollar is also being taxed into non-existence by the time it changes five hands.
I have a dollar, I pay 30% to the government off the top. I pay sales tax when I buy something for 70 cents. The store pays 15 cents in tax, and buys 40 cents worth of goods. The distribution company pays 8 cents in tax and buys 25 cents in goods. The warehousing company pays 6 cents in tax and buys 15 cents in goods. The international shipping company pays 3 cents in tax, and buys 5 cents in goods. The local representative buys 1 cent in goods, claims he spent 4 cents, and pays 1/10th of a percent in tax.
And that doesn't account for the labor costs, and the taxes they and the employer pay, or the fact that that original dollar cost the employer 10 cents in taxes.
EDIT: My math is shitty today, but hopefully the point stands.
THIS is partly why I understood the need for brexit. Sure the paperwork and movement of goods was easier, but all the taxes still existed and worse it was taxed in EACH country.
People here in the UK still haven't learned that buying local should save you a ton of money, but even the local companies are price matching upwards for profit, rather than considering the tax chain losses they aren't suffering.
There is diminishing returns on those percentages, but every dollar is also being taxed into non-existence by the time it changes five hands.
I have a dollar, I pay 30% to the government off the top. I pay sales tax when I buy something for 70 cents. The store pays 15 cents in tax, and buys 40 cents worth of goods. The distribution company pays 8 cents in tax and buys 25 cents in goods. The warehousing company pays 6 cents in tax and buys 15 cents in goods. The international shipping company pays 3 cents in tax, and buys 5 cents in goods. The local representative buys 1 cent in goods, claims he spent 4 cents, and pays 1/10th of a percent in tax.
And that doesn't account for the labor costs, and the taxes they and the employer pay, or the fact that that original dollar cost the employer 10 cents in taxes.
EDIT: My math is shitty today, but hopefully the point stands.
THIS is partly why I understood the need for brexit. Sure the paperwork and movement of goods was easier, but all the taxes still existed and worse it was taxed in EACH country.
People here in the UK still haven't learned that buying local should save you a ton of money, but even the local companies are price matching upwards for profit, rather than considering the tax chain losses they aren't suffering.