Thank you for your remarks, Drake. Although I usually type quite quickly, resulting in typos that I miss, I try to use my faculties as well as I can when answering so that something can be added. I try to avoid dismissive posts.
I think everything you say makes sense if you equate capitalism with "maximize profit to the exclusion of all other values, restricting only by what is illegal".
It's not that I equate capitalism with this moral (or immoral) imperative, but rather that I identify it as the ecosystem in which reward/loss results. One is perfectly free to "lose on purpose", if you want to call it that, and decline to leverage capital to gain more capital. I was actually discussing this with my wife the other day: how could one be sure to avoid any zero-sum interactions with others? The conversation started when I asked her whether any 'moves' in the financial markets could be construed as immoral in and of themselves. For instance, could shorting stock be considered to be problematic? Some people (usually those with skin in the game) say yes, because you profit by others losing and are thus hoping for a company to fail. But on the other hand, it's simply a prediction, and how can an accurate prediction be construed as having a moral component? Is truth immoral? These and other questions were discussed, and finally it became evident that all financial interactions - at least in our present time - must contain at least
some zero-sum component, where your gain is someone else's loss, or at least their relative loss. For instance if your fortune increases a million-fold, and someone else is sitting on the sidelines, you've made them 'lose' insofar as you now control a vast majority of all resources compared them, even though they never ever thought to enter the arena with you. And the simplest version of all is applying for a job: you get it at the expense of anyone else getting it. You win by them losing. Nothing else could be more straightforward. So this type of thinking, applied at the macro scale, leads me to conclude that the game must have winners and losers, and that declining to try to win doesn't mean you're not in the game, it just means you are deciding (consciously or not) to have a weak position in it where others decide your fate.
Let me put it a different way: do you believe it's wise for people to put away money in their 401k for retirement? Should they not be hoping for maximal return in so doing? And if so, is any ceiling on their return not simply a result of them not knowing how to do better? Who wouldn't say to their stock broker or fund manager "Do better if you can!" You want your wealth to leverage more wealth. That is capitalism. It's not a question of whether it's 'at the exclusion of all other values', but rather just a matter in almost all cases of "how much of a return can I get?" The moral side almost never enters into it unless you're in a very strong financial position indeed, like corporate board members, CEO's, or powerful fund managers. And then...do they not have a responsibility to their investors to make profits? It's not as simple as saying "to the exclusion of all else" when it's hard enough to ensure profits at all sometimes. So, what...if you can buy a bond at 4% should you decline and say, "hey hey now, that's too much, give me a bond at 3% instead"?
I don't know if Costco lobbies the government to get sweet tax deals. They might. But I would bet they don't push the envelope like other companies. Now, I can't say if that is altruism. It could be profit-driven. Knowing that customer service is much better when you've got the cream of the employment pool for that type of position, when workers are happy and motivated. In many cases, I believe that is true. But either way, it is "good" capitalism.
I don't disagree that one can govern with moral principles, or without them. In Costco's case I suspect it is all profit-driven, although I can't be sure. If so, it then becomes merely a coincidence that the best profits are made from acting in a humane fashion. What if the reverse was the case? Is the hotdog price rule enforced there a matter of principle, or of PR? Incidentally, I would like to mention that Costco seems to have morphed away from their "Price Club" roots and have become a rather expensive store, not unlike Whole Foods, whose claim to fame is reasonable prices for mid-upper ends goods from a label you trust. That's fine, but their corporate choices have certainly led them away from being a bulk discount store. So like it or not they've ended up being priced out of their original business model. At present they are actually more expensive than most other grocery stores near me.
If you go out with a friend and then say "huh huh, huh huh, I mentioned my business that you're not involved in, now I'm deducting this lunch, you are entering a gray area.
I get it, you mean that dishonest reporting should be avoided. Generally it's not vague at all from one's POV whether a deducted expense is in the spirit of the law or not. But it sounds like you mean that you should indeed otherwise make every last legitimate claim you can?
Then there's trying to leverage a law clearly not intended for you. Like a tax break directed to help farmers who raise livestock, that you exploit by planting just enough sheep on your golf course to try to claim it. If it doesn't hold up, oh well, that's just a calculation of doing business. If they reject your claims, you just pay some penalties that are offset by other questionable claims that you got away with.
Doesn't this get into the originalist/literalist etc legal debate we've seen on Ornery from time to time? Should people really be hunting for the purpose a tax law was created, or should they merely follow the law, and if it has usable loopholes to use them? Isn't that something legislators should correct, rather than taxpayers? The golf course example seems pretty simple, but maybe there are other cases that really aren't. At a certain point maybe the game design is what it is and the problem should be identified as design flaw rather than tax cheating? That's a complicated topic, maybe. For instance many people would accuse Trump of cheating on his taxes, using real estate loopholes to avoid taxes. But I'm not so sure. If those laws exist, and he abides by them, should he not use them? There are after all many risks in business that the government gives you no help with, and yet you're punished if your venture fails. Maybe a little extra help through tax law is actually warranted, depending on the case.
All of which is why I'd rather see a flat income or preferably consumption tax.
I sometimes debate with myself whether consumption taxes are worthwhile. Don't they punish the activity the society needs most in the current system?
I wholeheartedly agree with your assessment that our current crop of entrepreneurs, old money, and power brokers are never going to loosen their grip on the people making and enforcing the rules that could constrain them. Look at how they howled and howled until they managed to eviscerate the CFPB. Now under Biden they are getting modest support, but ultimately will remain too weak to really restrain any big banks. The penalties they can levy are a pittance compared to what companies rake in.
Yes, the fines vs profits calculation, which auto manufacturers and banks frequently make. But what I would like to point out is that the current state of things is IMO a necessary result of an over-capitalized system. The more things are for sale, the more those who own them will have more and more power. That's one reason why I am wary of crypto, beyond the facts regarding their solvency, real value, and honesty: I do not think it is a good idea to add more and more things that can be monetized and turned into tradeable securities. The appeal is obvious, that very rich people love crypto because it introduces more and more realms (blockchain, NFT's, digital concoctions in general) that become the new real estate, for those with deep pockets to occupy, leverage, and dominate. And this is natural, since there is already a global problem of there not being enough stuff to buy. That's a different and complicated discussion, but long story short there's a reason why the whole world looks to plant $$ in the U.S. - because there aren't that many other great options that are safe. It stands to reason that opening up brand new markets would be very appealing to Capitalists. While I can and do blame the 'old money' you mention (although much of it is actually new, not old, but is perhaps old 'in spirit') I don't blame them, exactly, for things being this way. That is a result of the capital markets such as they are. They verge toward consolidation over time. The monkey wrench in that machinery is the advent of mega-corp tech companies which can arise relatively quickly, which is another problem largely attributable to dominance in capital markets.
I guess my ultimate point after this long diatribe is that the system doesn't generate these results by accident, whether the dot-com bubble, the GFC, the takeover of real estate by Blackstone, or any of the other parts of it. It's just what happens when markets are set up like this. Regulation acts as band-aids for old problems (like Basel III for the GFC) but doesn't stop the new problems. I guess I feel like using IRS loopholes is kind of the least of our problems, or at least not at the top of my list of worries in the system. I wouldn't be too bothered by the ultra-wealthy having to pay more taxes; not at all.
