> Free markets are very brutal and at the first glance are bad for humans, but their efficiency gives the tax base for redistribution. Also they're inherently moral, because if you can do something for your fellow citizens and swap your labor for their money and back, then you shouldn't expect to be entitled to their surplus earning redistributed via the welfare system.
At first, you seem like a sensible person, but then you seem to be completely ignorant as to what "moral" means.
You can't feed poor people with "morals", you need a productive tax base and good redestribution system to do that.
If you have a farm, you can't kill your chicken to feed the starving neighbour if your own chidren are starving. You need to keep the chicken alive because they will feed you and if they produce enough eggs you can help your neighbour too.
When you overtax your companies you make them uncompetitive and you have less tax to redistribute. It's just simple mathematics, no morals are needed to understand that. No tax = no social safety nets. Tax comes from profit. Profit comes from margin. Margin is destroyed by higher costs. If you increase the cost, you need to close the border so all the companies can share the same cost of labor. You'll squeeze more from the companies and make more social payments but less capital for the companies to invest and hire more people. So you're just making the stuff companies produce more expensive for all. (because you need to close the border to remove outside competition)
It's not rocket science. When societies got rich then they started having social nets, not before.
Where do you think the tax comes from? If there is no profit, there is no business and there is no tax base?
Taxes currently are for both the busness and the employees.
On the producer side:
- business pays tax on sales (or VAT)
- business pays tax on profit left
- business pays tax on each employee in the form of empolyers "contributions" (just another way to tax the work of the empolyees)
- persons pay income taxes and social contributions
- persons (owners) pay divident taxes
On the consumer side
- sales/VAT tax
- import duties on stuff you buy
- various local taxes on property, vehicles and etc
In EU many contries have on the producing side 35-39% and on consuming side around 20% VAT, e.g. the govenment takes about 50% of an average workers pay.
Who pays the worker? The business by making a profit.
A good explanation is both correct and tactful. I'm not sure your comment is either of those things.
I think the root cause is that you are trying to use the one word "profit" to mean different things. Admittedly the word profit is poorly defined (good financial reporting doesn't use it). For example:
> business pays tax on profit left
No. A company's profit is what is left after expenses and taxes (if you disagree with that then I'm unsure what to say). I am not an accountant so I'm not going to try and define earnings for you (gross, net, etcetera). Your sentence is just incorrect: maybe incorrect for the same underlying reason as why I wrote my original comment?
I could dissect many of your other points for being oversimplified or country specific (different juisdictions do things wildly differently). For example VAT/GST systems and US sales taxes have very little commonality (think where the money goes and what can be claimed).
> Who pays the worker? The business by making a profit.
Obviously incorrect, since a company can pay their workers and make a loss. Losses can go on for a long time (some people have different incentives than company dividends).
I think overall you are trying to say that businesses need profits (that's almost a tautology) and that governments need businesses. That makes sense.
Rationally you might think that people should therefore want profitable businesses. Unfortunately, voters and governments don't actually have to make economic sense over periods of many years.
> Obviously incorrect, since a company can pay their workers and make a loss.
It's not incorrect, it's a simplified model. For debt to occur this capital should be generated somehow. It's true that you can finance a business by getting the profit from some other entity that has generated the profit. So it's not wrong to assume that the money hasn't just appeared out of thin air to fund the salaries. No profitable business no capital to invest.
> Unfortunately, voters and governments don't actually have to make economic sense over periods of many years.
No matter how long the stupidity lasts that doesn't mean that this model is incorrect. No profits = no taxes in the grand scheme of things.
At first, you seem like a sensible person, but then you seem to be completely ignorant as to what "moral" means.