re: Explain to me the new tax increases

quote:

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If they raise the corporate taxes on Kraft 10% then the price of every Kraft item goes up 10%.

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That's not 100 percent accurate.

Let's say Kraft Cheese sells for $2, and total costs are $1.80 before income tax. Taxable profit is 20 cents. They are currently paying 21% tax, so call it 4 cents per pack of cheese.

Corporate taxes go to 31% from 21%. Now, it's 6 cents per pack of cheese for taxes.

To make up for this, Kraft increases their cheese price by... 2 cents. Which is a 1% increase.