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Yes and no. The services that Google provides are already priced at the supply/demand meeting point. Tax is merely reducing profits that are already made.

Google is not going to insist on making X% net profit and will not put up it's rates just because a tax rate changes.

You can't pretend that Google dropped their rates in the UK by a few percent when the corporate tax rates dropped last year?



You neglect that a new supply-demand equilibrium will form, and since taxes effectively reduce supply, it will form at a higher price, with less demand.

End result : less sales, customers paying more, and Google earning less.

I do think you should consider that this will only raise prices for advertisers in France though. So it will be even easier for out-of-country advertisers to undercut France's local suppliers.

The problem is that most citizens don't realize just how big the state's take on a normal wage is. You believe it's ~55% of your income. Well, no.

In France, a business has to pay taxes to pay you, then you pay taxes on what you get (to make matters more complicated, these taxes are collected by your employer). In reality your bruto pay is about 130% of what you get quoted (just due to taxes). Out of that 45% remains (taxed at 55%). Then you have local taxes, since you have to live somewhere, these are at least 2% of income. And you add VAT 20% on most things you actually buy. This ignores various other things, like the fact that keeping track of all this requires people, and obviously the state doesn't pay for those, so they yet again increase costs for businesses.

But let's calculate. Out of what your employer pays you in France, you get to spend ... 100% * (100/130) * 45% * 80% = 27,6%. So the tax rate in France is 72.4%, for a person having a decent job in IT. We're not talking bank director here. And of course the French state is raising these levels. Also these are MINIMUM levels (for a decent wage), it's assuming you aren't investing in stock, assuming you don't own a house (or God forbid - more than one house), you don't own a car, ... If any of those are not true, you'll be paying even more.

I think it's beyond obvious that this tax level, even if it weren't going up, is not sustainable.


Sorry you've neglected to explain why a tax on profits is going to reduce supply.

You have totally ignored my point that changes in profit do not necessarily get passed onto the consumer. And my example was that Google pricing in the UK did not go 'down' when the tax rate went 'down'. So why would the price go 'up' when the tax rate goes 'up'.




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