Many prefer having ringtones.

“A ringtone is a really cheap thing…So I’m not too worried about the price going up, I can’t see people paying more that a dollar for that.”

The initial cost could be cheap, but taxing every time the ringtone goes off in public could increase the total cost indefinitely for no reason.

No, the price is decided by the shareholders or whoever is in charge of the pricing. The fact that people are going to buy something necessarily means that they are willing to pay, but that does not at all have anything to do with the pricing. An example would be the fat PS3.

“The myth that taxes [...] are ‘passed along to the consumer’”

It is not a myth as it actually happens.

Also, grocery stores and gas pumps are low margin businesses. What you pay is only a few cents more than they do. A ringtone is a really cheap thing, and at least at itunes they used to cost a buck. The royalties here are pennies. So I’m not too worried about the price going up, I can’t see people paying more that a dollar for that.

Many corporations – including AT&T – have to contend with share-holders. I doubt that share-holders would vote unanimously to allow the profits to directly tumble because of one entity demanding royalties.

Given that record labels are already taking a cut from any authorized sale of a ringtone, I highly doubt that AT&T is earning 100% of the profit.

As such, if a new royalty rate is tacked on to ringtones, the cost could be passed on to consumers in the same fasion the price of food has gone up in small food related businesses when the price of gas was soaring.

The myth that taxes and royalties are ‘passed along to the consumer’ has allowed politicains who knew better to hoodwink the American people into subsidizing huge corporatins for forty years.