Well, a few things:
- I never said anything about taxing business profit 100%. Obviously the rate needs to be progressive and sustainable. In fact, I am not even against lowering it. The point is that it needs to filter money back in to the economy. If a business utilizes its profits in a way that promotes growth, perhaps a tax cut is deserved. There are many options. Businesses are currently sitting on their money for asinine reasons like 'Obama is bad for the economy.' No, they're bad for the economy themselves. This slow growth seems so utterly artificial. Tax is a way to free that money so it can move again if business refuses.
- Taxing stationary profit will not make people lose their jobs. May it hinder companies from hiring more? We can agree on that, at least. As I mentioned earlier, tax incentives that encourage businesses to utilize their profit by expansion, hiring more, etc is a good thing. If we can limit taxation this way the lost funds are offset by welfare recipients who can find work.
- I don't care about the debt right now. It's a red herring.
And, of course, I welcome being ground into a fine, glittery powder for being simple in my understanding of economics.
My remark about 100% was to make the point that taxing companies more would produce a laughable increase in revenue at first for our government. Then companies would be forced to lay people off and stop hiring in order to pay for the tax increases. Now more people are paying into the system. The debt wouldn't be a red herring if all of our lenders called in our debts tomorrow. People thought the housing market bubble was a red herring. Bush called on congress to fix it in 2003 and McCain had his own bill to resolve the housing market crisis in 2005. Neither time did anyone want to do anything about it as if it weren't going to matter anytime soon. We saw how well it worked. If profits are earned by companies, then it shouldn't be the government's to take. I'm not arguing for the abolishment of the corporate tax, but the government coming in and taking profits through taxation in order to do what they please with isn't how things are done in the United States. They can't do that to a business anymore than they can do it to me or you. If a company does reserve profits, which they hardly ever do, then it's a reflection of their lack of consumer confidence. Right now it's a common practice because there's no certainty for the future of our economy. Profits rather than being saved and stored are put back into the company whether it's for hiring, transportation, or opening new locations.
