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What is private sector profit and how does the US Government benefit?

  1. JON EWALL profile image75
    JON EWALLposted 5 years ago

    What is private sector profit and how does the US  Government benefit?

  2. SportsBetter profile image78
    SportsBetterposted 5 years ago

    Private sector profit is what business earn when they sell goods.  Businesses shouldn't be stopped from making a profit, that is why they are in business. 

    The questions shouldn't be hows does the Government benefit.  It should be how do corporations benefit from Government. 

    The problem isn't profits, it is businesses that gain power and money from the Government.  The problem is government giving specific groups power over another.  Everyone should have an equal opportunity and not receive special benefits. 

    Government has too much power to auction off to big business.  If they didn't have this power corporations wouldn't be able to lobby to government.

  3. Lions Den Media profile image60
    Lions Den Mediaposted 5 years ago

    Hi Jon - Profits basically are the difference between the price a product sells for and what it costs the company or person to produce the good or service. So if a product is sold for $100 and it cost $75 to manufacture the "gross" profit is $25 on revenue of $100.

    Private sector profit is the choice between a willing seller and a willing buyer exchanging goods and services, that one party believes is beneficial to the other, in exchange for money. This free exchange between goods and services for money is called commerce. This capitalist model of free will between people buying and selling, results in providing the money to pay employees necessary to manufacture goods or provide services that people decide to purchase, whilst also providing the money to purchase new equipment and raw material to make the goods that people want.

    A portion of the money is retained by companies in the form of profits which are then taxed. This money is reinvested into plant and equipment which produces more jobs in other business sectors, for which the government receives taxes.

    The government benefits immensely by paying nothing to business owners to collect income taxes on the money earned by employees, as well as the taxes paid by the business on profits. In fact, if a company were not to make a profit there would be nothing for the government to tax.

    Another benefit government receives is that when a business owner dies the assets and profits that have been taxed previously at different levels are now subject to an Estate Tax on the entire value of the business and its assets. An example of this can be seen in the case of the Miami Dolfhins where the team was sold to pay the Estate Tax after the owner died.

    So essentially business owners and employees do all the work and then the government takes what they earn predicated on a belief that without government business could not succeed.

  4. umeraziz profile image33
    umerazizposted 5 years ago

    profit of business entities not under direct control and ownership of government is known as private sector profit.

    government tax the private sector profit to raise its income and these taxes are returned to us in the shape of law and order, army, infrastructures, health and education. Government work for our well being.. Government's benefit is our benefit..

    1. Lions Den Media profile image60
      Lions Den Mediaposted 5 years agoin reply to this

      Umeraziz - the US Constitution obligates the federal government to provide for the common defense, NOT health, education, infrastructure etc. Those issues are State's Rights issues and the responsibility of the sovereign States.