Is There A Point To Company Tax?

Hey Jessconimsts

As economic disparity continues to widen and the rest of the world looks keen to catch up with South Africa's Gini coefficient, many politicians are calling for taxing the rich and of course taxing the companies. The only way to correct the wealth gap is to put into law a way to remove wealth from the rich, so it can be given to bureaucrats and somehow trickled back to the ordinary citizen through various social relief programs and jobs.

Taxing companies more has long been echoed as the solution to all our problems if we can make more money out of working businesses that satisfy consumer needs we can do more with it than they can do in the market with the funds their goods and services earn them.

The profit motive

Companies all over the world, large and small open their doors each day with the idea of making money. That's what they there for and their only objective. Providing goods and services that people want and make their lives easier and people are WILLING to pay for in exchange for these goods and services. Company income is just a fancy way of saying we're grouping everyone's labour involved in the company and focusing it on something that is profitable and that the market wants.

Avoiding the burden

Governments look to companies as a source of revenue using capital gains tax, corporate tax and in some cases, value-added tax. While some companies with means will look to use creative accounting to reduce their tax obligations and pay accountants large sums of money to do so, it creates a world for ineffective use of capital. Instead of companies using their wealth to grow more extensive and more competitive and reduce prices, they are hoarding cash in tax havens and making accountants and bankers rich to help them avoid paying tax.

Since you get well nothing for paying tax, this creates an artificial need for bankers and accountants while moving the capital from production to financialisation as to not be punished by the government. Reducing the possibility of job growth and defeating the purposes of the taxes in the first place.

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Corporate tax collectors

Companies don't earn money; they are a holder for income based on a groups labour. So how can something that doesn't make money pay taxes? Companies don't pay taxes; they're merely following a ruling by the government to work as more efficient tax collectors from the people. In the case of value-added tax, companies aren't paying that, they are passing the cost onto the consumer, and you pay that additional tax, making your purchasing power weaker and stripping you of more wealth.

So before you think that tax the companies is the simple fix, remember, for every tax out there, somehow the consumer ends up paying for it. The only ones trading labour for cash, are the only taxable sources in any economy.

Have your say

What do you good people of steem think? Are you for taxes? Against taxes? Want moderate taxes?

Holla at me in the comments! All my commenters I will now refer to as Jessie. Jessie is a good friend of mine, but Jessies got a girl, and I want to make her mine.

So have at it my Jessies! If you don't have something to comment, simply comment "I am a Jessie."

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