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Tuesday, February 10, 2009

The Tax Man Cometh: Our Public Goods and Services Depend on Profit

The notion that the goods and services provided by the public sector are the result of the pursuit of profit is usually a bit difficult to accept, but their origins are the same as the goods and services provided by the private sector. Here's why.
We are a people of government, and our government, like all governments since the beginning of time, collects revenue. The source of this revenue is a predictable as death. Governments tax the wages, rents, interest, and profits that are paid by businesses to the factors of production (resources) they hire. And so it is that business, while producing goods and services in the private sector, also generates the income that governments tax to produce the public goods and services the community wants.

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