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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO) -- Ignore unavailable to you. Want to Upgrade?

To: Geoff who wrote (1343)	4/9/1998 8:33:00 AM
From: Ralph Bergmann	Read Replies (2) \| Respond to of 6439

One point to discuss here: Can higher taxes improve gross margins? That's my opinion. Ok, if taxes were raised most likely there will be price shock between population. But after a while business will go on as usual. The difference between production costs and selling price increases with increasing taxes. If the selling price is already very high it makes no real difference to increase cigarette prices by another 50 cents per pack to improve gross margins. The price pressure practically is reduced. I already brought up the example. We in europe suffer from steady tax increases of gasoline. Now we pay approximately 3.5$ per gallon in Germany. Did this prevent people from driving cars? No, definitely not. The number of cars instead doubled in the last 15 years. Now some politicians are discussing to increase the price for gasoline to 11$ per gallon within the next years and people are not scared very much. Ralph