Monday, July 2, 2012
Carbon Tax Dumb #1
Business Person A - "I have to put my prices up by 10% because the Carbon Tax is increasing my power bills by 10%"
Well no, it turns out that unless you are a power company, you aren't selling power as your product. So actually, whatever percentage the power usage is of your product, it will go up 10% of THAT.
eg: The guy who said his power bill was going up 10% and that electricity was 20% of his costs...guess what, 10% of 20% is 2%.
On average the rise in costs is 0.7%, so if your electricity bill is 20% of your costs, then you are probably a business who uses a reasonable amount of electricity and therefore you are supposed to incur a "hit" of sorts.
Why? So that you can perhaps work better? Smarter? More efficiently? Look for renewable energy options?
THAT is why there is a Carbon Tax.