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They Don’t Deserve That Money, Let’s Tax It

When did it become acceptable for politicians to decide how much money a company is allowed to make?  When did profit become a bad word?  When did our government seize the power to decide how much is too much and to tax away any profit they deem excessive?

The AFL-CIO and many Democrats are now pushing for a new tax on stock transactions.  It would specifically target large firms, like Goldman Sachs.  Some of these firms have recently started to make money again and now, some of it might be taken from them.  The proposed tax would be very small, about a tenth of one percent on all stock transactions, so it would not have much of an impact on small time traders or the average middle class investor.  It would, however, have an impact on large firms that trade a huge volume of stocks each day… and that is exactly what it is intended to do.  Apparently, making a profit is wrong, and it needs to be seized by the government so they can use it for more programs and entitlements.

Thea Lee, policy director at the AFL-CIO, spoke of the proposed tax and said,

“This would discourage numerous financial transactions.  People flip their assets several times in an hour or a day.  They make money but does it really add to the productive base of the United States?”  source – The Hill

Lee is claiming that since the profits these large firms are making do not add to the productive base of the United States (which is a false statement), they are fair game for government confiscation.  Does this seem like a communist/socialist statement to anyone else?  Lee does not want these companies to make money.  She wants to reduce their profits by taxing transactions.  This will ultimately result in less transactions being made in order to avoid paying the tax.  What’s the point of this?  What’s so bad about a company making a lot of money?  Isn’t it great that a company like Goldman Sachs is now making money and is able to pay back the TARP funds it was loaned?  If the profit is made in an honest and lawful way, why should there be any reason to be upset about it or try to tax it away?

Here is a simple economics lesson for those who suffer from wealth envy and think “profit” is a bad word:

If a person has an idea for a product or service, he or she may decide to create a business around that idea.  The goal of that business will be to make a profit.  Would anyone want to go through the stress of starting a business if they knew they would never make any money?  Of course not!  So, now this person has started a business.  If the business starts to make a profit, then the profit can be used to grow and expand the business.  If the business expands, then more employees will need to be hired.  This means more jobs and lower unemployment.  If the business starts to make lots of money, it will continue to expand (which means even more jobs created), and employees will most likely start to make more money.  So in the end, we have more jobs and higher wages all because someone was allowed to make a profit.  The higher amount of jobs and better wages will also trickle through the economy and result in more cars being bought, more electronics being bought, more houses being bought, more people going out to eat at restraunts, more vacations being taken, and much more.  All of these things help the economy, so what is so bad about a profit?  Why do liberals hate it so much?

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