Help Understanding

Discussion in 'Economy' started by Lunchables, Jan 6, 2012.

  1. Lunchables
    Offline

    Lunchables Rookie

    Joined:
    Jan 6, 2012
    Messages:
    2
    Thanks Received:
    0
    Trophy Points:
    1
    Ratings:
    +0
    Ladies and Gentlemen hello, i'm Lunchables. I'm not the sharpest tool in the shed when it comes to economics in general so i'm going to ask you folks. =D

    What would happen to the US economy if every business/corporation or whatever took their profits and returned it to the US government so the government could cover costs and deficits and what not for 1 year?

    I realize companies and whatever businesses call themselves could not expand themselves, but are there more profound effects on not just companies, but us citizens as well?
     
  2. DSGE
    Offline

    DSGE VIP Member

    Joined:
    Dec 24, 2011
    Messages:
    1,062
    Thanks Received:
    30
    Trophy Points:
    71
    Ratings:
    +30
    The problem is that if you don't get to keep your profits then there's no incentive to produce the things you sell. If the government said to you "all the money you earn over $20,000 we're gonna take away from you", you'd react to that by not working as much anymore. It's costly for you to work. Work sucks, you could be doing other stuff with your time. So once you've earned the 20,000, why would you continue to work anymore? So the result is that not only do you get less money, the government gets less money too because you're not earning any money for them to take.
     
  3. xotoxi
    Offline

    xotoxi Platinum Member

    Joined:
    Mar 1, 2009
    Messages:
    30,322
    Thanks Received:
    5,203
    Trophy Points:
    1,110
    Location:
    your mother
    Ratings:
    +5,492
    Hi Lunchables.

    May I call you Lunchable?
     
  4. Lunchables
    Offline

    Lunchables Rookie

    Joined:
    Jan 6, 2012
    Messages:
    2
    Thanks Received:
    0
    Trophy Points:
    1
    Ratings:
    +0
    Ahh, thank you. That makes sense lol, I guess I lack a little common sense as well.
     

Share This Page