Tangle writes:
If Starbucks thought it could charge 2.30 instead of 2.10, it would do it today - tax or not.
Ok, so Starbucks doesn't think it can charge 2.30 without losing business and more importantly without making less money.
Charge more sell less, charge less sell more. Somewhere there is a price which brings in the maximum amount of money. I am quite confident that Starbucks has looked at that and came up with a price arround 2.10.
Now if you increase Starbucks cost of doing business they will make less money, less return on investment. If they can raise the price and do the same volumne they will do that. That is highly unlikely as if that were so the price would be higher right now.
So depending on how much the tax is, you put Starbucks into the position where its return on investment drops. If that drops enough they will stop investing in the UK and go where the return is better or the tax ciould make them lose money in which case they would just close up, and you lose the jobs and taxes paid by their employees and you lose the property taxes on their outlets.
They charge about $3.45 in the US and I think you have to be a complete idiot to pay that for a cup of shitty coffee. (I've always used Starbucks as an example that you could sell literal shit to the American public and they would buy it because no one knows how to say "the emperor has no clothes".)
When I was working as an exploration geologist for Phillips Petroleum they made a discovery off the coast of Northern Ireland. The well would produce 3800 bbls of oil a day. That's a good well even with the cost of offshore drilling. Phillips plugged and abandoned it because it wasn't big enough to get any reasonable rate of return on your investment because of the tax rates.
Good for you guys, it's not like unemployment is high in N. Ireland and better to send your money to OPEC.
Edited by petrophysics1, : typos
Edited by petrophysics1, : No reason given.