Explain how taxes affect business decisions.?

Hong Hunkin: Taxes pose two issues for a business. First each and every tax required of a business is just another business expense. An increase in tax has the same effect as would a raise in cost of goods or the electricity bill. All businesses are there to make a profit. While that profit is not a fixed number that the business must have but it is generally a controlling factor if the business is to continue. A business may be able to absorb a raise in the electricity bill for a short time but sooner or later that business is going to raise their rates. If the electricity bill goes up enough that the increase in fees charged by the business are higher than the market will bear the business ceases to exist. The second problem with taxes are their complexity. Not only is the business required to pay the tax they must also pay someone to determine what that tax is and to keep records to verify that they paid the correct amount. Another business expense. From a business per! spective there rarely is any advantage to the business from taxation..***:D...Show more

Nicolas Cooley: They are like any other expense that has to be figured into the equation.