The Taxation of Profit; A How To and Explanation of Necessity
The recent wave of corporate tax inversions has triggered interest in what motivates these tax-driven transactions now. Corporate executives have argued that in
Reasoned taxes do not harm the competitiveness of companies. Rather, it is business model itself and the ways that the company implements their business model(s) which effect the competitiveness of a company. If it were true that taxation hurts business’ competitiveness, then how is it that American companies are being bought out by foreign companies or consortiums? How is it that our capital no longer is owning businesses, but rather, is becoming subservient to different countries and different worlds? Why is it that our capital is no longer supreme in the world, as far as ownership of the production units of wealth is concerned? It doesn’t matter how much money you actually have. What matters is how much wealth you own, and who owns that wealth.
The best way, I think, to tax a business is to tax the profits that are realized on after capital investment returns. The simplest way to do this is to tax the profits of companies on a progressive scale (allowing for ever increasing amounts to be made, nonetheless) while allowing for companies to write off capital investments that they make on their business(es) for the duration of the loan period and a few years after the loans have been paid off. This allows profit to still be made (sometimes in whopping great amounts) while tying businesses into the Common Wheel of society and the social unit in which they are based. After all, what good is a business that only extracts wealth from a given society and then isn’t even able to hold onto that wealth in the first place? What good is a deadbeat business to our society when there are other options available that can ensure harmonious coexistence between private interests and the public good? Why should we have to sacrifice everything so that fewer people can get a slightly greater marginal benefit?
This method of taxation is actually derived directly from Adam Smith’s “The Wealth of Nations.” Even he was not so foolish as to forget the Common Wheel of society and the general wealth, well being, and power of potential opportunity for every person in society to live full, prosperous, and comfortable lives. All that is needed is to bind our society’s consumption patterns to the environment in which we’re living. That is, technically, the one thing that Smith neglected to mention in his series of books, most likely because it was not something that had pinged on his awareness in 1775-76.
Businesses can either abide by the natural laws of economics, which states that wages form the principle method for economic exchange, and that taxation for public services is something that should be supported for our economic, environmental, and social well being, or they will be consumed by the society and/or the environment for their lecherous, greedy, and buffoonish beliefs that money, somehow, has some inherent value onto itself, and that that artificial value trumps our social, economic, environmental, and personal health and well being. Whoever said that being rich was the key to happiness was full of crap, especially if you become rich through social or environmental degradation. That’s the harsh scientific fact of this universe. Abide by it, or die. That’s all there is to it.