A recent writer wanted to know why, if businesses would not use profits to hire more people, there should be an aversion to raising taxes on capital gains. As a career business consultant, let me take a stab at it.
Businesses exist for one purpose: to make money. They do not exist to employ people. In fact, since people are their biggest expense, the fewer the better. Businesses expand and hire more people for only one reason: to make more money.
On the other hand, government does not exist to make a profit. It operates on other people's money. Expansion of payroll and budgets means more clout for the bureaucrat -- and can occur only by getting more of other people's money. The greater the burden placed on business -- medical insurance mandates, workers' and unemployment compensation, paid leaves of absence, wage mandates, pension benefits, capital gains taxes, etc. -- the higher the profit that must be achieved to justify an additional employee.
It doesn't matter whether you classify corporate profit as "obscene" or "greed." This is the reality of capitalism and what makes our economy go "zoom." Government often works at cross-purposes to the free market, and it's precisely because of its unmitigated expansion during the past 40 years that we find ourselves in a sorry predicament today.
Never miss a local story.
Michael J. Raymond
Editor's note: Michael Raymond is a member of Bluffton Town Council.