Wednesday, February 15, 2006

Are Corporate Profits Bad?

A better question might be, "what is done with the money from corporate profits?" Does this money just go to private incomes for fat cats or does it go into things like research and development? Is it invested in improving the corporation's infrastructure, or does it just go to a bunch of wealthy people to buy bigger "show boat" homes?

How the profit money is used becomes a more important question, in my mind, than whether there is a big profit, or not.

The tax system can address this question.

Assuming it is better to invest in things like "plant and equipment," "research and development," "job creation," "the community," rather than investing in fat cat people, the tax system can address this need.

Raise personal income taxes on the wealthy, but maintain generous deductions for business expenses, investments and charitable donations.

The important question is not "is there an excessive profit?" The question is, "where does the profit money go?"

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