Profit

[MikeF]

At what point is a business making excessive or immoral amounts of profit? Is there a profit margin businesses should be limited to? Why or why not?

I do not see limiting profit margin as the metric to focus on. If someone sells pencils in the street at $1 and it cost them 10 cents each to build inventory, is 90% profit obscene in this case?

What I see as more important is limiting the amount of power and influence money can have politically.

I would also distinguish between essential services such as utilities and non-essential commodities, products, and services. In the latter case, the market should decide with fairness in markets maintained with appropriate regulation.

 

[It Aint Necessarily So]

What amount of wealth would you set as the cap?

This is just a principle. I don't have suggestions for what those caps should be.

Are we talking about annual income or net worth?

I would limit the total wealth any individual or business entity could amass. I don't care how quickly they get there.

 

[Nakosis]

I would say it's immoral if they're not using that money for the public interest. It looks like they have some deficiencies in that area, particularly with fire prevention and homelessness, so if they're making that kind of surplus and not fulfilling their responsibilities as public servants, then yes, that's immoral.

Yes, it could be immorally put to use. So I don't think the amount is so much a moral issue as how it is made and how it is used.

 

[Left Coast]

How much profit should the government make?
For example the state of California recently made a 31 billion profit/surplus in tax revenue.
Is it immoral for a government to generate more tax revenue than is needed to run the state?

How much excess tax revenue should a government take in morally?

Public budget surpluses =/= profits. I do think that at some point taxation becomes too excessive, although I don't pretend to know where that line is, or if there even is one line.

 

[Nakosis]

Monopolies come to mind here. The difference with government in democratic countries is that we (collectively) choose it. But that diverts us onto a tangent for another thread.

Do not have a choice in what products to buy? What services to make use of?

 

[Revoltingest]

Year end

So if I make 15% in one year, but lose 25%
in the next, then my average income over
2 years is about negative 5%.
Your plan would ruin businesses with any
volatility. Or should such businesses not
be allowed to exist?

Hey, would I get to carry forward the loss
from one year to reduce taxable income in
the next?

 

[Left Coast]

Do not have a choice in what products to buy? What services to make use of?

In many industries, no you don't. Or your choices are extremely limited, to only perhaps two options.

 

[ChristineM]

So if I make 15% in one year, but lose 25%
in the next, then my average income over
2 years is about negative 5%.
Your plan would ruin businesses with any
volatility. Or should such businesses not
be allowed to exist?

Hey, would I get to carry forward the loss
from one year to reduce taxable income in
the next?

Average profit, not income.


I haven't got a clue how the US tax system works

 

[Nakosis]

In many industries, no you don't. Or your choices are extremely limited, to only perhaps two options.

Like what?
I'm thinking on many folks who choose to "live off the grid" grow their on food, create their own energy, build their own shelters. Perhaps an extreme example but the choice is there.
We choose otherwise for our convenience or are forced to by government regulations.

 

[Subduction Zone]

One huge problem that I see with limiting profit is that it will only harm small businesses. Large businesses have armies of accountants trained in how to move money around.

Profit? What profit? Oh those earnings? We needed to reinvest them . . .

There will be loopholes and they will use them. Where the new businesses will often still be one man or woman setting out on their own. They won't know how to play the game.

 

[Left Coast]

Like what?
I'm thinking on many folks who choose to "live off the grid" grow their on food, create their own energy, build their own shelters. Perhaps an extreme example but the choice is there.
We choose otherwise for our convenience or are forced to by government regulations.

Internet service providers, for example. Examples abound in medicine, with medical device manufacturing and supply being dominated by very few players. Google is another example.

 

[Nakosis]

Internet service providers, for example. Examples abound in medicine, with medical device manufacturing and supply being dominated by very few players. Google is another example.

Depending on the area, there are plenty of choices for internet providers. Easy to pick and choose among the best deals. Or even life without the internet.
Yes, I know barbaric but I still remember life before the internet.

Medicine, lots of choices in insurance providers. Wasn't that promised by Obama?
Usually the company's HR department makes this choice for its workers but the choice is there.
If you are on government assistance then the government makes the choice for you.
The choices are there though it may not be you who makes them.

 

[Quagmire]

At what point is a business making excessive or immoral amounts of profit? Is there a profit margin businesses should be limited to? Why or why not?

I think it depends on what you're selling. I mean if somebody's willing to pay $10 for a pet rock (pretty healthy profit margin right there) that's their choice, and if they want to give me their money for something you don't need hey, I'd take it.

On the other hand, if we're talking about something that people can't do without, something you have to buy, that's a little different, especially if we're talking about monopolies.
If you're charging exorbitant prices for things like groceries and medical supplies just because you know people have to pay whatever you ask, then you're holding they're well being for ransom and it's basically extortion.

 

[Left Coast]

Depending on the area, there are plenty of choices for internet providers. Easy to pick and choose among the best deals. Or even life without the internet.

No, there really aren't "plenty of options." And in many areas, you have only one.

Telling people in the modern world to go conpletely without the internet is not a viable or reasonable solution. Or if it is - go ahead.

Medicine, lots of choices in insurance providers. Wasn't that promised by Obama?

No, I don’t think so. And I didn't say anything about insurance providers.

Usually the company's HR department makes this choice for its workers but the choice is there.
If you are on government assistance then the government makes the choice for you.
The choices are there though it may not be you who makes them.

I don't understand what any of this has to do with how much profit should be considered excessive. Your whole aim here seems to be to pull the thread on a tangent about government or taxes. Let's get on topic, shall we?

 

[Heyo]

At what point is a business making excessive or immoral amounts of profit? Is there a profit margin businesses should be limited to? Why or why not?

There is no fixed margin and there can't be. In a very lucky economy where everyone easily makes 20% it isn't excessive to make 25%. In a recession it would be usury.

And it would rely on how you make your excessive profit. Are you just lucky selling something that is in great demand? Let's say a pop star with a smash hit. You can make hundreds of percent profit without exploiting anyone. Not immoral in any way.
You can use your (quasi-) monopoly to sell overpriced goods and services, which is not nice, even if legal.
You can exploit your workers, paying them pennies while you rake in the dough. Also not nice, even if legal.
You can exploit your suppliers, maybe in third world countries. Also legal, also not nice.

In short, to make a high profit you have to rip off your customers, your employees or your suppliers.

 

[Nakosis]

No, there really aren't "plenty of options." And in many areas, you have only one.

Telling people in the modern world to go conpletely without the internet is not a viable or reasonable solution. Or if it is - go ahead.



No, I don’t think so. And I didn't say anything about insurance providers.



I don't understand what any of this has to do with how much profit should be considered excessive. Your whole aim here seems to be to pull the thread on a tangent about government or taxes. Let's get on topic, shall we?

Ok, well it is you deciding to isolate what choices are available for you are whatever groups of people you are considering. And, that's what folks do. Limit their own choices and blaming it on mega-corporations.

Personally for me, mega-corporation is irrelevant. A, do I want it. B, can I afford it. Even C, can I find a cheaper alternate. Or D, I suppose. Can I live without it.
You have to admit that in many cases we can choose where to direct our money. Though not all, especially when it comes to the government.

Ok sure maybe every 4 years or so you can vote for a candidate but in between your ability to cast a single vote, the person you voted for can almost do whatever they want for the next several years without much you can do about it. Whereas tomorrow I can decide to change communication service providers.

 

[exchemist]

At what point is a business making excessive or immoral amounts of profit? Is there a profit margin businesses should be limited to? Why or why not?

No. There is no way to determine what level of profit is "fair" - and very often it is hard to determine what the true profit actually is, as it depends so much on how costs, capital depreciation and investment risk are calculated.

But the regulatory authorities should make sure that businesses do not profit from an undue imbalance of power between buyer and seller. That's what we have anti-monopoly (antitrust) legislation for, for example, and other forms of market regulation.

 

[Left Coast]

Ok, well it is you deciding to isolate what choices are available for you are whatever groups of people you are considering. And, that's what folks do. Limit their own choices and blaming it on mega-corporations.

No, that literally isn't what I'm deciding in all cases. You're acting like the market is created ex nihilo by each individual. It isn't. Our purchasing choices are limited by what's feasibly available.

 

[Nakosis]

No, that literally isn't what I'm deciding in all cases. You're acting like the market is created ex nihilo by each individual. It isn't. Our purchasing choices are limited by what's feasibly available.

Actually I'm relying on personal experience. Which is admittedly limited but it is an example of what is.
Some may have more or less but your position seems limited by numerous variables.

 

[Left Coast]

Actually I'm relying on personal experience. Which is admittedly limited but it is an example of what is.
Some may have more or less but your position seems limited by numerous variables.

My only "position" here that I've offered to you is that monopolies/oligopolies exist. Which is a demonstrable fact.