Business Quote by Ludwig von Mises
““By rendering their enterprises profitable, the consumers shift control of the factors of production into the hands of those businessmen who serve them best. By rendering the enterprises of the bungling entrepreneurs unprofitable, they withdraw control from those entrepreneurs with whose services they disagree. It is antisocial in the strict meaning of the term if governments thwart these decisions of the people by taxing profits. From a genuinely social point of view, it would be more “social” to tax losses than to tax profits.””
About This Quote
Source Book: Human Action by Ludwig von Mises, 1949
People allocate resources by rewarding successful producers and penalizing unsuccessful ones; taxing profits interferes with this market signal, while taxing losses would be more socially aligned.
In simple terms: Markets reward success and punish failure; taxes should reflect that.
Key Takeaway
Tax profits less, tax losses more.
Themes
economics
property rights
government policy
market signals
Mood
analytical
critical
neutral
Type
economic
political
philosophical
When to use this quote
- business decisions
- investment choices
- government budgeting
- entrepreneurial risk
Key Concepts
liberalism
spontaneous order
taxation theory
Questions to Reflect On
- How would taxing losses affect entrepreneurial risk?
- Can society benefit from rewarding failure?
A Different Perspective
Taxing profits may discourage investment and growth.
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