Viewing a single comment thread. View all comments

HildemarTendler t1_j20st8q wrote

Reply to comment by Rooooben in Exxon sues EU in move to block new windfall tax on oil companies by davetowers646

>no business is guaranteed profits

What sucks about this is that many parts of the US government need the stock market to continue going up. Lots of things like retirement funds, futures markets, employment, etc. requires the economy to continue growing. So feeding profits to companies like Exxon helps with that, basically giving them guaranteed profits. It really sucks.

112

Rooooben t1_j21486b wrote

That was a huge mistake. Getting retirement and putting them onto an investing club hoping that businesses will always increase profits, while we have contrary tax laws that push businesses to SPEND all potential profits and encourage hiring and growth. At the same time we say “oh but to fund 401k, the companies have to LOOK good so people keep “investing” their retirements. In order to do that, businesses need to extract profit and pay dividends - reducing the money that can be used instead for growth, since we don’t tax business expenses like cost of goods sold or employees (payroll tax is not the same because it’s the same for every employee, not pro or regressive like income tax).

We have two different incentives pushing opposite directions, invest money, helps our economy, or profit-taking, pleasing the investor class, but does very little for our general economy (no incentive for the profits will be re-invested at all when they can use financial instruments to multiply the invested money)

81

Curious_Associate904 t1_j221qiq wrote

This is basically already a law in the US, if someone harms your potential profits through some kind of unprovoked action you can sue as anti-competitive behaviour or a slew of other US business legal statutes which would be considered wild in Europe. More or less for the reasons you mentioned too, the dependency on financial instruments means that the mechanics of those financial instruments require protection.

14

SutMinSnabelA t1_j23iyzs wrote

Will be interesting to see how EU manhandles them though. They do not take price manipulation and such things well. They are just as likely to fine additional costs on top of the tax for trying to dictate their markets.

2

AtomicBlastCandy t1_j25r9oh wrote

Agreed, a company could be insanely profitable but if they aren't showing consistent growth then they get hammered by Wall Street. This leads to pressure to do shitty things like offshore and lay off workers things that I find morally wrong but are considered part of a company's fiduciary duty to their shareholders.

1