Most countries tax companies on profit or dividends paid out, not revenue. Revenue-based taxation would defeat any industry that depends on another industry that depends on another industry.
Think about it this way: You want to build an electric car. You need to buy a battery pack. Now the company that builds your battery pack, they need refined lithium. The lithium refiner? Well, they need raw lithium.
Say mining the raw lithium costs 1000€ for a battery’s worth. Now say all the companies involved make ZERO profit. Revenue tax is 10%.
Raw lithium mining company needs to charge 1100€ instead of 1000€ because of the tax. Now the lithium refiner needs to charge the battery manufacturer 1210€ because, again, the tax. And you now get to buy the battery for 1331€ because of the tax. Customer has to pay 1461€ for the battery in the car.
Meanwhile another company starts up. They mine raw lithium, process it, build the battery and then build the car. They only ever get paid once, so revenue tax is only on that 1000€. Customer pays 1100€ for the battery in the car.
This is also why companies get VAT back and only the final consumer really pays VAT. Otherwise every company would have to make everything from scratch to stay competitive, because every transaction gets taxed.
TL;DR: We only tax the actual profit. If you pass one dollar back and forth a billion times, you don’t have to pay tax on a billion dollars in revenue, only if it ends up with the person who didn’t have it originally does that person have to pay tax on that one dollar.
Funkt4st1c@lemmy.world 1 week ago
Oh, zero. Actually, negative because of all the government money theyre wasting and eating and profitting from (privately, anyways. All of these companies bleed millions daily)