> It is baffling to me, as it is no different than thinking that "sugar taxes" are taxes that soda companies pay. There is even a straight forward analysis that shows it does impact the soda companies rather heavily. But it is objectively paid by the consumers. And nobody is really confused by that.
Businesses like to say that, to get consumers to back them politically, but it's not at all true:
When input costs increase, a seller must decide whether to take the extra expense out of their profit or to increase the price (or some mix of the two).
Taking the extra cost out of their profit obviously decreases profit.
Raising the price decreases sales (consumers won't buy as much at a higher price), which decreases profit. The change is not linear (look up demand curves). The seller, if they are smart, already found the price that maximizes revenue. Therefore changing the price will reduce revenue.
In reality, it's not such a science and there are other factors. Another fundamental factor is price elasticity of demand, which is how much a change in price affects demand. For sugary drinks, quite a bit - people can forgo them. For lifesaving healthcare, elasticity is less, for obvious reasons.
Businesses like to say that, to get consumers to back them politically, but it's not at all true:
When input costs increase, a seller must decide whether to take the extra expense out of their profit or to increase the price (or some mix of the two).
Taking the extra cost out of their profit obviously decreases profit.
Raising the price decreases sales (consumers won't buy as much at a higher price), which decreases profit. The change is not linear (look up demand curves). The seller, if they are smart, already found the price that maximizes revenue. Therefore changing the price will reduce revenue.
In reality, it's not such a science and there are other factors. Another fundamental factor is price elasticity of demand, which is how much a change in price affects demand. For sugary drinks, quite a bit - people can forgo them. For lifesaving healthcare, elasticity is less, for obvious reasons.