What, it disappears then, does it?

Every dollar of profit given to the shareholders of corporations is
a dollar that could have been spent paying producers or workers more, paying more tax, or
investing in infrastructure or innovation.

The people who receive it do what with it? Err, spend it or invest it, meaning that it goes to workers, producers, tax, investment or infrastructure.

17 comments on “What, it disappears then, does it?

  1. As a note, money that comes in to us, goes on roughly four things. Costs of sales (largely payments to big corporations, but one key micro business), investment (largely payments to big IT corporations), paying us (workers, although evil capitalist exploiting ones – mostly through PAYE, but some shareholder redistribution) and tax.

  2. In my line of work, the biggest single cost, by miles, is salaries.

    And, due to the way corporation tax is structured vs. income tax here, we “distribute excess profits” to the workers (all 4 of us) in the form of end of year bonuses.

    So, from our perspective, a CHF paid as a dividend is largely wasted, since it gets taxed far more than if we pay it as salary. Which is IIRC the opposite of the UK.

  3. Where is the quote from Tim?

    If its The Mourning Star ( and that is how it should be spelled considering it is the Journal for murdering death-cult scum) it is hardly worth a quote.

    If from somewhere that should know better , occasioned by Brexit/Trump Derangement Syndrome , that is more news/refutation worthy.

  4. “If its The Mourning Star ( and that is how it should be spelled considering it is the Journal for murdering death-cult scum) it is hardly worth a quote.”

    I don’t think they’ve ever mourned those deaths, that would be an admission it was wrong. They were just necessary sacrifices for the cause.

  5. The Usual lovely phrasing. When they talk about dollars ‘given’, I take it they’re not talking about the customers freely exchanging for goods and services. Or the employees deciding they don’t want to take a chance negotiating for better pay.

    No, I take it they mean ‘every dollar they are allowed to keep’ ?

  6. Sorry, just reread the quote. They mean ‘every dollar they are allowed to compensate their investors with’. Which is Tim’s point.

    More coffee!

  7. I love the implication that the investors do nothing and are lucky they get whatever scraps the rest of us deign to give them.

    abacab – “In my line of work, the biggest single cost, by miles, is salaries.”

    A good line of work. I would guess in mine the biggest single cost is management.

  8. ‘or investing in infrastructure or innovation’

    If you don’t get profit, you don’t invest. Idiot.

  9. This is a category error. The only reason—literally the only reason—for a company’s existence is to make profits for the shareholders. All the other things on that list are ancillary to that goal at best and inimical to it at worst. It really does amaze me that there are people who still believe that the purpose of a business is to provide goods or services or, even worse, to employ people.

    The source of this wankery is here.

  10. “Yah, we don’t pay dividends to our shareholders and don’t plan to.”

    “Wait, why is everybody shorting our stock?”

  11. Being owned by stockholders is essentially a loan taken out to buy the capital assets needed to run the business. Dividends are the interest paid on it. Shareholders are more tolerant than banks about you temporarily varying the rate of interest, but anyone who has loaned you money is going to want a return on it, or they’ll want their money back.

    It’s like if you take out a bank loan to buy an office complex and a bunch of computers and photocopiers and stuff to put in it, and then declare: “This stuff is now mine. Why am I still paying the bank all this money when they’re not contributing anything to the business? They’re not putting any new money in. They’re not sat in the offices here doing any of the work. They’re just parasites sitting back and feeding off our hard work in perpetuity.”

    But funnily enough, if you stop paying you’ll suddenly find your offices repossessed and sold off to repay your debts, and yourself out on the street. Mysterious.

  12. Leftists believe, as a matter of dogma, that profits do disappear.

    Which follows from their belief that the evil capitalists put their profits into something all leftists call “coffers” – where they will never be seen again, much less help create economic growth, new capital, or even jobs.

    I’ve never actually seen a “coffer” (other than Mrs. Clinton, I mean) but I imagine it looks something like Scrooge McDuck’s vault.

  13. Who are the major investors in listed corporations? Retirement funds. Those wicked shareholders are us, the workers.

  14. ““Yah, we don’t pay dividends to our shareholders and don’t plan to.”

    “Wait, why is everybody shorting our stock?””

    Jeff Bezos seems to be doing quite well using that model.

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