Small businesses are the "engines of the economy" yet they are often severely disadvantaged.
Introduction
Small businesses are often described as the "engines" of the economy.
They employ large numbers of people and they often come up with the kind of ideas that can change paradigms and create entirely new markets.
Despite this they face many hurdles and the regulatory landscape in most economies is set up in a way that makes life very difficult for them.
Most western countries seem to almost be designed to favour the incumbent large companies and corporations and I believe that this is actually bad for all of us.
We lose out on new products and services that may be life changing.
We also lose out on potential revenue that might be there if more small businesses succeeded.
Most Small Businesses Don't last Five Years
According to information from 2014 more than half of new businesses don't survive beyond five years in the UK.
This is due to multiple reasons but according to this Telegraph article some of the biggest factors for the failure (in the UK) are:
The UK tax system.
Lack of bank lending (a big problem for small businesses which are seen as high risk).
The high relative cost of running a new business (versus an established one).
One can sum up these problems as resulting in a lack of cash flow - something which is vital to the day to day running of a business.
I also suspect that these main issues are replicated in the US and many other western economies.
The combination of uncertainty from this latest UK election and the issues with Brexit mean we need to focus on stabilising our economy as much as possible.
I believe that one simple measure may help to energise the small business sector.
The Idea - Zero Business Tax for the First 10 Years
So the idea would be to have a zero percent rate of business tax on all new businesses for 10 years. It could also be combined with a zeroing of other taxes or refunds (e.g. for VAT).
After this period the tax rate would gradually be adjusted up to the regular rate over 5-10 years.
The exact way of doing this would need to be kept as simple as possible to avoid creating an extra administrative burden which small businesses are often least well placed to deal with.
Obviously this would reduce tax revenues in the short term, but I believe this could ultimately benefit the economy and eventually result in greater tax revenue in the longer term by:
Increasing the proportion of small businesses that succeed.
Increasing the success of new products, ideas and business models.
Creating more new jobs with greater security (hence greater income tax revenue).
Increasing spending, both directly between businesses and also via the people they employ.
Increased sales tax revenues (like VAT) as a result .
The Big Problem With This - Data
The biggest problem with anything like this is that it is hard to know the exact effects before you do it.
Governments want hard data and numbers before they try anything and this relates to one of the major issues of economics and behavioural economics in particular.
Even if we change a single economic element like this there are so many variables that interact in hard to predict ways that any form of modelling is likely to be subject to a significant degree of error.
It could be so far off as to be completely meaningless.
Indeed the only way of knowing for sure would be to actually try it. The thing is most governments don't like cutting taxes - it is a very scary thing for them.
One option would be to trial this - pilot this measure in selected areas for the purpose of data collection.
Whilst not perfect this would allow some information to make an informed decision.
Conclusion
I'm not an economist although it is something that is coming to fascinate me more and more.
These kind of issues are important examples of the interaction between monetary models (numbers) and human psychology.
It would be a very brave government that would even consider doing something like this - even in a pilot study.
For one thing it would not be popular with those with left wing leanings who do not seem to understand the importance of businesses for the success of any economy.
Personally I think that as growth slows down in most western countries we need to try more creative solutions to ensure that we don't get left behind compared to emerging economies.
I will apologise in advance if there is some obvious reason why this isn't viable or why it is an idiotic idea. Like I said I am not an economist - I am just someone who is interested in this matter.
I think it is good topic to have a discussion about though.
Let me know what you think in the comments.
Thank you for reading
As a bootstrapped startup owner who had to completely review his business' organization after the first year of taxes, I completely approve that suggestion!
That first year almost killed us. We knew it was coming but new companies are so unstable that we couldn't ready ourselves fast enough.
Thank you for sharing your experience - this is the kind of information I was after!
There are already a lot of tax schemes to encourage investment in the UK in small businesses such as 'SEIS' and 'EIS'.
In practice in the UK, if you're starting a small business and register as an LTD company the first £680 of profit a month is basically tax free (a tax-deductable salary to yourself that you don't pay income tax or national insurance on). That's assuming the business is your only job/ source of income. If you run a low cost business, like a consultancy, you also have things like flat rate VAT refunds that increase your turnover.
Beyond that, corporation tax is not that bad, one of the lowest rates in Europe. This is speaking as a small business owner who is happy with the status quo.
Yet it still seems to be cited as a major reason for small business failure. I think the only way to know for sure is to trial it and get some pilot data.
Definitely! I can only speak from my experience with a more tech focused business. I imagine someone with a more traditional business employing many workers may have a completely different experience.
Right. Thanks.
zero tax on start ups - ambitious but tempting
I often watch the Dragon's Den seems that aside from the tax (dont really know anything about UK's case) most start up owners don't do their homework and lack the right business mindset - except for not all of them go to the Dragons to borrow moneyyy.
As for zero tax for start ups yes please - all over the world
See why can't any party come up with a plan like this? I mean zero tax would be amazing to start a business up but not even that. If they did a plan where corporation tax was 5% for the first 5 years I think they would see a growth spurt.
Then again, how many people would start to close their businesses up and start again when the 5 years is approaching :). They would certainly need to think it through.
This is the problem that any government faces trying to juggle things around to see what suits. We are just guinea pigs being tested on really to see what works best. Its also a bit of rob peter to pay paul type of scenario. But something must be done to help small businesses because when we started off it was the hardest thing I've ever done.
Yes it would need to be checked for loopholes and people gaming it. A pilot could help to test different methods out.
The little guys are push out often before they have the chance to fall out. Less is more when it comes to regulation for small businesses.
Best,
Isaac
Being a two time business owner and two time business loser in the US. I agree these are issues that I faced. Cash flow was king. It's rough out there right now. I see small business in my area closing left and right. Nice post as it rung a bell with me. Later dude.
Thanks mate. I have heard similar things from friends who have tried to start a small business. Everything seems to be set up to favour the big companies and disincentive new companies that are starting out.
Like in another point you had. It was really hard to get funding for my second business. After 2008 all the banks really tightened up their lending practices. That was four years ago so, I am not sure what is going on today. Seems like the banks may have let loose again. Back then, I got approved for an SBA loan and they require lots of liability insurance for startups. My business was working with kids so I was hampered with lots of other startup costs and quarterly insurance fees. I even had to pay for flooding insurance because my shop was located near a water estuary. They don't seem to tell you all this until after you sign off on the loan. Hey I just followed you on twitter. My goofy VR channel name is @RealityMixed See ya man.
Yes I have heard that. I think it depends on the country - I have friends here in England that are still having difficulty getting loans for their businesses.
On Twitter? I will take a look.
I feel like if a small business made you tax exempt, it may be too ripe for abuse from regular people. I even think I would be too tempted to start deducting everything I do as a "business expense". I definitely pay a ton in taxes! We all do!
Very good point and this would need to be taken into account.
You make a good point. Additionally, you should see a huge incentive for companies to ditch employment arrangements for contractor arrangements (e.g., independent contractors in the US) because they could sell it to employees as a tax savings. That would result in even fewer taxes, so the revenue hit to the State would be even larger.
I don't know about every country, but the US treats LLCs (Limited Liability Companies). There is no corporate tax; profits are passed through to each member (the LLC equivalent of a shareholder) [source: http://www.nolo.com/legal-encyclopedia/how-llcs-are-taxed-29675.html]. The passed-through profits are treated as self-employed income and taxed as such.
Great idea if you ask me. I run a small company (15 employees) and the tax can be crippling (From NL)
Thanks - I would be interested to hear more on how it creates problems for you.
Thanks for pointing that out! I'll put it on my shortlist to write a post about! Thanks for the inspiration @thecryptofiend and have a great weekend!
You too enjoy your weekend. I am rapidly trying to learn more about such issues because I would like to someday have my own business (focussed on medical research) but I am still completely clueless when it comes to things like tax! Hence the rather crazy question. Let me know when you post it should be helpful for people like me.
The government will never do that because they got used screwing the small guy so they could be sponsored to sit on fat chairs from the big guys.
is that simple really.
Very true. I am curious to see if it would actually help in practice or just have a negligible effect if somehow it could be done. There seems to be a perception that taxes are a big problem for small businesses in particular.
My sister is an economist. She looks at local and British data a lot. She tells me that only 3 out of 100 small business make it after 10 years. Capital is the no.1 problem for these guys. The second one is competition. Small stores clump up in small areas and they all share the "pool" of customers, leaving them with almost nothing. Add to that the burden of tax and everything comes down quite fast.
Right. You should ask her to join Steemit!
I will
It's not crazy.. it's fk genius ;)
:)
In Canada there is something called the small business deduction. This is a reduction in corporate taxes for Canadian controlled private corporations, or CCPCs. The reduced rate of tax is available on active business income up to the corporation's business limit for the year. The limit in 2017 is $500,000. With that being said, unless you are earning passive income - IE rental income, interest income, many small businesses in Canada that are just starting off pay little to no taxes as is.
Interesting. So perhaps the problem in Canada would be for more mid-sized businesses that fall outside of that threshold? Is the 500K on all income or only on profits? I think it varies depending on the nation.
It is on all "Active" income. However it is a one time use tax credit. Once it has been used up IE: your corporation has earned more than $500,000 in net income in one of its fascial years, you no longer have access to it.
In my opinion if the Canada Revenue Agency really wants to help the medium sized corporations in Canada, they have to amend what is considered passive income. For the last 10 years I have operated a number of self storage businesses in Canada. I had 7 employees and two locations. However considering that CRA saw storage as a passive income, I was always forced to pay 50% tax. This seemed highly unfair because the income was not passive. There was much more effort involved in collecting rents and keeping my facilities in tip top shape than there was in collecting a interest payment
That sounds pretty ridiculous! One would think it obvious that storage facilities need constant work and maintenance.
There is more to the CRA's methodology of what is considered passive. You need at least 8 employees for it to be considered an active business. None of those 8 employees can be family members. This was really hard because most of the people who worked at the business were family members. I guess in essence the CRA just makes it really hard on family businesses for some reason
Perhaps they are worried about people abusing the system and so their remedy has ended up being overly harsh. It is not uncommon for that to happen when it comes to rules and regulations.
Pretty much, leave it up to a few bad apple to ruin in for the rest of us. I guess phantom employees in family businesses and corporations in general are a real problem in Canada, so I guess this is a great way to weed them out.
In some developing countries, some big corporations are given tax holidays for some years when they set up businesses in those countries. The government sees the impact such investments would make as far reaching, hence the need for such incentive. On the contrary, they have failed to see the impact that small and medium scale businesses can make on the economy when given necessary aid.
Giving tax holidays to small businesses in their first few years of operation would not be a bad idea at all. But certain conditions may have to be put in place. For instance, how much impact is such business making or would make on the economy of the local community where it is for instance? Also, government may need to consider the number of people the business is employing or can employ if given such aid, etc. Such aid should be justifiable by the business owner to qualify.
The idea has to be considered in such a way that both the government and the small businesses will win at the end of it all.
Beyond 0% tax or not, government all over, particularly in Africa should create an enabling environment for small businesses to thrive!
Thanks for such a great response - I completely agree. Whether this is the right solution or not governments need to reduce the friction for small and medium sized businesses to get going and thrive.
You're welcome..thanks for initiating this thought-provoking discourse @thecryptofiend! Small and Medium scale businesses needs some 'fresh air' so they don't get chocked to death by the big companies and goverment regulations!
In Sweden you get money from the government when you go bankrupt. Why would be a deal to give zero tax to starting bussines. I started business not long ago and VAT already increased to 21% Plus paying the accounting taxes and workers taxes. "If it moves, tax it" Even if it doesn't move - taxed it.
I'm not sure what you mean.
I agree with your idea of taxless small businesses for the first 10 years. It's simply unreal to expect from starting small businesses to achieve enough profits so that that they are able to pay huge taxes. Something similliar to grace period credit loans would be a perfect boost for those businesses to survive "death valley" development period.
Thanks. I think it is worth testing to see if it works.
I think zero tax for new businesses within their first 10 years of being in business is a great idea. I absolutely agree that keeping more money in the business allows them to innovate, create new jobs and grow their business. This in turn affects their success as well as overall economic spending. I'm no economist either, but the underlying principle here I feel is pretty solid!
Thanks that is what I was thinking too. I would love to hear from an economist or someone who has a grounding in UK tax codes as I may be mistaken here.
This post received a 33% upvote from @randowhale thanks to @thecryptofiend! For more information, click here!
Cool I wasn't sure if it would work. This is a very clever idea. I'm not sure about the game theory challenges it might face but I'm assuming you could adjust the prices upwards.
I'm not an economist either but what I would wonder is where would the tax come from that is lost on these small businesses. We are getting taxed at every corner in the UK and the union is still in a mess. When we first started our business almost 5 years ago the Scottish government helped us with various grants for rent, staff and on top of that the business rates under a certain threshold were null. This helped immensely and now that we are up and running, we can afford to pay our rent and rates. Dont get me wrong though, the rates do still need lookes at because it's a stupid amount of money we pay each month. Personally I think it should be based on your profit and not the rateable value of your premises. I don't know how the rest of the UK deals with the business rates issue right away but in Scotland we are protected.
Just my input of course.
I think you are falling into the trap of assuming that greater taxation leads to greater revenues. That is not always true.
I agree with that but thats not what i meant to put across. There will be problems not taxing new businesses but if they get help for their business such as grants and help with business rates then that way it ensures that people dont open and close businesses after the 5 years.
What problems.
I think there are simpler ways of ensuring that.
I don't know why my reply didn't show up there but I'll write again.
Problems such as the NHS which is funded by taxpayers and its already under immense strain.
Simpler ways such as what though? One way which may be possible would be similar to expelling directors from being director in a new company where they were proven to be fraudulent or whatever. There must be a record kept but thats the only way that springs to mind.
It happens sometimes.
The NHS has always had problems with funding and it always will. There is no solution to that problem.
That could be one way.
I meant to say by the way this was an excellent post. Got the brain juices flowing. Good talk man!
Regulation is more stifling than taxes. And it's not the actual tax rate as much as the insane amount of accounting that has to happen for equipment & depreciation, revenue, expenses, employee/payroll taxes. It's ridiculous. I mean, think about tracking taxes for Steem, Steem Power and Steam Dollars.
My wife runs a small business and has to fill out multiple zero dollar forms quarterly to provide that she doesn't need to pay a tax. Why waste the time with the forms?
true..governments need to give thoughts to the ease of doing business. The complexities involved in certain processes can be discouraging.
Yes I have heard that the forms and bureaucracy is a big problem too.
It's very true that startups need more help and we need to make things easier for them but I'm not convinced cutting tax is gonna be all that helpful - you just pay the business tax on your profits anyway so as long as they keep reinvesting all revenue (as they hopefully would) it wouldn't benefit them all that much.
And I could see established companies exploiting it by just doing spin-offs and 'invest' in them to save tax.
But yeah, worth thinking about and I don't have any better ideas...
Good points - it would certainly need to be examined for loopholes and possible problems with exploitation.
You would need some checks to stop people closing one business after 9 years keeping ALL the profit, and then opening another one with a similar name offering the same service, etc.
Yes.
Congratulations @thecryptofiend!
Your post was mentioned in my hit parade in the following category:
Thanks for the great article and the fantastic idea to help small businesses and their local economies. Over the long term I agree that tax revenues would increase. This also may be the only way small businesses can compete on a level playing field with the multi-national corporations. upvoted and followed :)
Thanks. I think it certainly could and it is something that is worth piloting.
Sounds interesting !! Thanks for sharing !!
upvoted and followed
Thanks!
Yes Yes And YES! Do it in the UK and USA. Hell do it everywhere! Resteemed so I can read all of it later. At work. Running my own small business.......and lunch is over....... --UpVoted--
Thanks - could you say some specific reasons why you think it would help?
This is not a bad ideea, first reason is that in many countries money go to private pockest of bad people. New technology can avoid taxes. For example, i am a eth farmer, by farming i provide services to ETh, they pay me, i dont need a company, i dont need aproval to start. The ideea is good, but gready political people will never accept.
What's an ETH farmer? Are you talking about ethereum?
Yes i am talking about Ethereum.
OK :) It's just when you said farmer it confused me.
:) Part of my friends call me Farmer :) i dont mind, for now ETH is my favorite legume :))
:)
Great article! Simply put and well thought out and presented!👌
This is true capitalism, not the present day corporatism we currently have.
Re-Steemed and upvoted. 👍
Thank you!
Paul Joseph Watson on his @PrisonPlanet YouTube channel covers it comprehensively here @thecryptofiend.👌
Thanks!
Good Luck with that. To be replaced by what; Anarchy, Socialism, Communism or Progressive-ism or perhaps Bi-polar Permissive Uni-Directional-ism???
Oppression is someone forcing their vision of "Heaven on Earth" on others. Usually at the point of a gun. How many more millions need to die before people stop trying to force "Paradise" on their fellow man.
Ronald Reagan drastically cut corporate tax, the economy boomed and tax revenue more than recovered. In recent history, Ireland did the same thing. Ireland embraced austerity, and cut the corporate tax rate down to 12.5% immediately after the GFC.
Ireland's economy recorded 24% GDP in 2016, unheard of growth in other economies inside the Euro Zone.
The best part of this picture is the iPhone with the Apple Logo. Apple is the (maybe) most valuable company in the world. They are ruthless capitalists and try to patent everything and sue everyone.
All of their products are made by Foxconn a Taiwanese based company that has gigantic cities of workers on mainland China, including children, living in barracks and working in conditions little better than slaves.
Things are so bad there that it is not uncommon for the workers to commit suicide because of the poor working conditions and the feeling that they are "trapped" and that this the only way to free themselves from bondage.
https://www.forbes.com/sites/bensin/2016/08/22/the-real-cost-of-the-iphone-7-more-foxconn-worker-deaths/#937b6fb55608
https://www.cnet.com/news/riots-suicides-and-other-issues-in-foxconns-iphone-factories/
Apple wants to do business so bad in China that they have agreed to follow the anti-freedom polices as laid down by the Chinese Communist Party. Money and profits rule.
https://www.theguardian.com/commentisfree/2017/jan/06/apple-china-censors-new-york-times
https://www.hongkongfp.com/2017/04/08/satirical-news-show-china-uncensored-censored-apple-hong-kong-taiwan/
Just like a Vegan who wears leather Nike shoes, I laugh at all the hipster snowflakes with their fruit phones.
Apple, Google, Facebook and others need to be broken up. They are clearly becoming too powerful.
Fantastic
Thank you!
Thank you for this. Local businesses are more sustainable for the environment as well, (such as local farms that can sustain their local towns), which is why it is so important to support local small businesses that support their local economy and families.
I agree.
This theory sounds to much like right. But the controllers can't allow small businesses to compete. They might break loose of the matrix and see the truth.
Well I think it would be useful to test out.
Yes I agree.
Interesting post especially about Zero Tax
Thanks!
It a brilliant idea... even 5 years will be good enough
It an amazing Idea
i guess a few years will be enough
Thanks.
The less government theft of our resources, the better. Even if their only motivation is to leave more businesses operating to be taxed in the future, it's still a good idea.
Thanks.
Taxes are evil!
I don't think they are evil.
nice post
thanks for sharing
Thank you!
I think this is a great idea to help build a more robust economy. Established mega-corps already have so many subsidies and advantages, it is about time small businesses get one.
That is my thinking. The big question is whether it would work and if it would actually help. That's why I think some kind of experiment would help.
Do you think that bigger companies or even the population would get to pay a higher percentage of taxes, just to get the costs covered, that result from this zero-tax idea?? I mean the money has to come from somewhere if you take it from another edge away...
Of course in the short term that would be true, however it might mean greater prosperity and greater tax revenue long term. Nothing is completely free.
In order for people to be truly free, government has to be limited to absolute essential work that only government can do in a free society; Courts, Police, Military, Diplomacy, etc..
The idea isn't to fund the government so it can do what it "needs" to do, it is to strip it down to its necessary core functions only and let people actually take care of their own affairs and those of their community voluntarily, rather than being forced to pay at the point of a gun.
The less government, the less cost and the less money wasted to inefficiencies and corruption.
If the government is having to hold fund raisers and is basically begging for money from the people, you know you are doing it correctly.
I am all about helping the little guy start with the several small businesses that I have started over the years. I never want to work for a large corporation.
It's ridiculous this year as a college student with only earning under 20,000 thousand dollars over the year we had to pay $600 to get our taxes done.
For sure. All those costs add up and the real price of everything is going up all the time. Over here in the UK we have rampant inflation for most necessities which the government figures don't really seem to keep up with.
I am sure that there is somone that always has it worse. The big problem with being a cash business is you never can prove your income and qualify for a home.
The average home in California is 12 x a person's annual income.
Small businesses shouldn't be taxed. We should just tax politicians, lawyers, and judges to discourage such behavior!
Lol yes but I'm sure they will get there fancy accountants to make it so that they get around the taxes!
That is true! They got us again!
Lol they always have us even when we think they don't ;)
I support this idea!
Great!
I think medium and small business should not have to paid tax, unfortunately, is the other way around.
Yes the big companies can shift money around in ways that allows them to avoid tax e.g. Amazon, Google, Apple.
I love the look and feel you used on this post. Was this all html or markup based?
Thanks. Both.
Great article as always, good sir!
My area has recently been inundated with big high street names and franchises, affecting the local shopkeepers something bad. To the extent that there was actually a petition going round to support those shopkeepers and keep the heritage of our area alive whilst recommending only sporadic visits to the other, more established chains. Or even a complete boycott altogether!
So initiatives like the "Zero Business Tax for 10 Years" are like gold dust for small startups. Anything to help struggle past those precious few first years.
Such is the life of a growing, independent business.
Again, beautiful presented by you. Awesome stuff, @thecryptofiend. :)
Thanks mate!
no, this isn't crazy at all..I mean small business is the backbone of any country. If small businesses go the middle class goes with it, so I am all for small business. The problem nowadays is everything is going corporate.
Great post! Upvoted followed and resteemed if you can do the same that would be great :)
Thanks!
You are talking about developed countries, in third world countries it is even worse, small businesses have no support at all, any tax benefits are only for big business, your idea is great but I don't think big business will like it.
Correct - it will create more competition for them. I don't think it would ever happen.
Small businesses are definitely the best! Very interesting post👍
Thank you.
Wow, amazing.
Great work, so interesting..
Thanks for sharing information.
Dear friend @thecryptofiend
Upvote and Resteem.!!
Have a nice day ^_^
Thank you!
You are welcome ^_^
Thanks.
You are welcome ^_^
There is logic in this and I think the governments are beginning to realise.
Big business come and invest and can pack and go when things turn unfavorable.
Small businesses are the ones that stick it through good and bad times.
Yes very true.
Corporations and Companies DO NOT pay Taxes. 100% of the cost is passed on to the consumer.
Since you are paying taxes on your income when you earn wages and every time you spend your hard earned money, you are being DOUBLE TAXED.
If you decide to save your money or invest in the economy through owning stocks or bonds, you are taxed again.
All of this taxation reduces the incentives on individuals/ businesses and reduces the standard of living and retards innovation. Capital shifted from the people who actually produce goods and services that is send to a government which can only take and spend without end,doeen't help anyone.
In addition, high taxes affects small and medium sized businesses to a much greater degree than a large multi-national corporation with their army of accountants, lawyers and off-shore tax shelters. This ensures that wealth and power stay in the hands of those who already have it and makes it very difficult for individuals to move upward in wealth.
The United Kingdom could be an economic powerhouse and a center for innovation. The educated and hard working people of the British Isles, can dominate the World's markets, if only they are allowed to do so.
No more VAT, a flat 15% tax on purchases of goods and services , elimination of all income and corporate taxes, no taxes on interest income or stocks; would propel the U.K. economy to new heights. Of course the "evil" rich will benefit too, but I never was hired to work for a poor person.
Only an army of "Takers", increasingly dependent on the cradle-to-grave welfare state stands in the way. Ironically, these individuals would benefit most from economic growth and prosperity.
Taxation is the Power to Destroy.
People Get The Government They Deserve.
I really don't understand this argument. Even if you look at it in this way they can end up pricing themselves out of the market. So they do pay.
No they don't. 100% of the cost of taxes is paid by the consumer. If you make a product or offer a service, taxes is a cost; just like labor, insurance, etc. and it is incorporated into all prices.
Although the tax is "hidden"from the consumer they still pay it in the form of higher prices.
On top of that, the consumer pays additional VAT or sales tax depending on the country.
If taxes are reduced or better yet, eliminated, prices drop as costs drop. Businesses that don't adjust their prices down, risk being overtaken by competitors.
A good example is the taxes on gas and diesel fuel. I pay 60 cents a gallon less for the same fuel as my friends who lives in a high tax area. The price I pay at the pump is exactly 60 cents a gallon less than him, which is 100% accounted for by the taxes.
Gas station owners make the same gross profit on a gallon of gas, however, it is likely that his gas station actually makes less, as they likely pay a bit more to buy their fuel because of the increased cost of fuel for the transport truck, etc.
The money I save simply is used to purchase other goods and services. In addition, the lower fuel price allows for lower costs. When I go to the market to buy Strawberries, grown near his home, I pay less than he does for the exact same produce, even though they have to transport it 300 miles by truck to get it to me.
The reason they can't charge more for Strawberries is we grow them here too. Our lower costs, force other growers to take less profit if they want to remain competitive with local providers, who have lower costs.
I remember seeing a television "Game Show" from the old Soviet Russia. In the game, contestants were asked the "Best Way" to improve the profits of a mythical hat company they owned.
The "Correct" answer that the contestants came up with was to simply raise the price of the hat. To a Western businessman, this is simply laughable.
I understand what you are saying but you don't seem to understand what I am saying.
I would recommend that you expand your thoughts beyond the 4 sentences you wrote in 2 replies.
That just illustrates my point. It seems you are unable to accept someone may disagree with you.
Everyone is entitled to their own opinions, but not their own facts.
All done here, moving on.