The Perfect Business: All Profits, no Losses

My father's father made leather goods; especially saddles, bridles, and other necessities for horses. I still have a few of his leather-working tools in the basement, and when I need to make a new hole in a belt, Grandfather's tools still work fine.

Grandpa's son-in-law, my Uncle George, was a farrier. As a boy, I recall coming across him in the park across the street from our home, where he was putting new shoes on one of the horses that were still occasionally used to pull lawn mowers in those days. I was impressed with the skill and obvious competence Uncle George, a wisp of a man, manifested in dealing with those large animals.

Both Grandpa and Uncle George saw their careers wane, and finally expire, with the advent of the automobile. Perhaps at one time, they might have said to themselves, "Automobiles! Now THAT's the business to be in!"

And today, perhaps, publishers, seeing the amount of information available on the internet, sigh and say, "The electronic publishing business! Now THAT's the business to be in." Or how about steamship lines, seeing their business lost to airplanes? Or movie houses losing customers to video-rental stores? How many times have businessmen looked wistfully at the greener grass in a newcomer's yard!

But if you wish to partake of the prosperity of a new business, you can. You can become an owner of any business that attracts you, by buying its stock. We all remember the wonderful stories of the fortunes earned by the lucky few who bought Polaroid way back when, or IBM when the computer was still a fuzzy concept for a future day.

There's a downside, of course. Your purchase of a stock does not insure the prosperity of the company. Stockholders lose money, too, although it doesn't get the publicity that the big winners get, unless the losses are so universal that shareholders are jumping out of windows in skyscrapers. And to obtain the stock in the first place, you have to obtain the money to buy it, and that means working. Literally, you invest your life in the stocks that you buy, which is one reason it is so painful to see them dwindle in value. (And why it hurts so much to see the value of your savings—part of your life's work—shrink via inflation, or fiat money.)

And no one can invest in every company. Even the most diversified shareholder only has investments in a relative handful of businesses, while others, even more profitable, may be unknown to him.

But there's another way to share in the prosperity of business, without buying a share. There is no downside, and the cost of investing is nil. Moreover, you share in the prosperity of every business, not just a carefully chosen few. It's called taxation. Do you think the airline business is a good business? Well, put a tax on airline tickets—and airline fuel, the aircraft themselves, and the salaries of airline personnel. How much will it cost you to do this? Very little, and the cost is paid by the airline itself, and its personnel, and its fuel suppliers. They provide you with the wherewithal to tax them! Computers? Now there's a very good business! Tax each computer, each printer, modem, monitor, scanner, mouse, and floppy disc. Tax the buildings that house the businesses, and the people who work there. Do you have a particular fondness for the hardware business? Tax every nail, every nut and bolt, hammer, and saw, and, of course, the people working in the store, and the building itself. It's a pat formula, and you can apply it to every business in the state, virtually automatically. Moreover, you can decide what is or isn't a business, so no one can escape you by claiming not to be in business. After all, you write the laws! A few nitpickers may find what seem to be loopholes in the law which exempt them from your predations, but you also own the courts which interpret the laws, and even if you are wrong, you can bring such endless pressure to bear on the unruly that they eventually fall into line, with the other sheep. After all, you've got nothing else to do, while they have a business to run---for you!

Some businesses will prove less profitable than others. Never mind; your investment is nil. Inevitably, some will fail: too bad. But you won't lose anything; you had nothing invested.

Indeed, your only connection with the businesses upon which you prey is a negative one. Although you collect a percentage from each and every transaction, you do nothing to accomplish the sale, manufacture the product, ship it, store it, advertise it, or market it. On the contrary, your myriad rules and regulations placed barriers at every step of the process.

It doesn't really matter whether a business is doing well, very well, or barely making ends meet. You get your share regardless. Those that are, in fact, doing very well, will get their just (?) deserts when you tax their income, having already taxed their inventories, real estate, sales, and the incomes of the workers.

This being the case, and it is, why are taxing corporations—governments--invariably wringing their hands about insufficient funds? If there are profitable businesses in the state—and those which are not profitable will not be around long---how can the organization which preys upon them not also be prosperous? It has to do with public relations, and bookkeeping. The taxing firm is willing to disclose to its victims a budget, which certainly makes the enterprise appear on the brink of insolvency. The true picture, however, is seen only in the CAFR, or Comprehensive Annual Financial Report, which is available only to those who specifically ask for it, and know how to interpret it.

I have the CAFR from my state, Missouri, and it shows that for every year since 1989—as far back as the 1998 report goes---the state averaged a surplus of about two billion dollars. It is a fair assumption that most of the businesses in Missouri which are taxed to raise this sum had nowhere near as great a profit! It makes you wonder about the oft-repeated maxim that our tax system insures that the rich pay their share. Where taxation is concerned, the poor are taxed so that the rich can become even richer. And the taxing corporation not only reaps obscenely high returns on its "investment," but it pays no taxes upon them!

Truly, the taxing business is the business to be in!