Inflationomics

Stirring up Envy

I find it interesting that the U.S. Congress is taking notice of Apple, Inc.’s tax planning (avoidance, not evasion) and questioning Apple’s motives.  It would be one thing if Congress were asking Apple executives how they came to be one of the most successful (profitable) companies in the world, with an eye toward improving the way the U.S. government is run, but no! They want to find a way to change the rules to squeeze more money out of Apple!  (Make applesauce and juice out of them!)

Does anyone notice the irony? The world's largest debtor (the U.S. government run by U.S. Congress) eyeing one of the most successful companies in the world to see how it can squeeze more gold out of the goose that's laying golden eggs all around the world? Isn't it obvious that the world's biggest debtor is desperate to find more money so that it can continue its profligate ways?

Of course, sensible people might ask who should be allowed to use the money that Apple, Inc. has earned and accumulated—the profit-making company that has earned it and employed thousands of people in self-perpetuating jobs, or the U.S. government, an entity that can't balance its budget, has trillions of dollars in debts, and squanders billions on make-work projects that are consuming the wealth of the world while inflating its currency out of existence? In other words, which is better? Trusting responsible, profitable businesses with billions of dollars, or trusting debt-ridden, profit-consuming governments with those dollars? (Never mind asking who has the right to the fruits of his/her labor.)

Hint: This is not a trick question. The best answer is the responsible profitable businesses. To the extent that we allow governments to consume wealth through taxation and profligate spending, we make ourselves poorer in the long run. Why would anyone think this is good? And yet, governments around the world continue to grow, continue to consume, continue to harass profit-making companies and individuals by appealing to voter jealousy. But, it's more than that. Somehow, people think that governments are entitled to the money they take from taxpayers and that it's just a matter of determining how much is "fair" for each taxpayer to pay and then collecting the money.

Perhaps, someday, someone will stand up to big governments and question their motives and their methods of raising ever more in taxes, adding more debt, and printing ever more money until we are all poor. Perhaps, someday, people will realize that if we kill the incentive for companies to earn a profit by taking those profits away, that we will kill the reason to work hard, save, and invest and make this world a richer place in which to live, rather than a poorer place. I hope I live to see that day!

Robert Jackson Smith

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