EXCESS-PROFITS TAXATION AND PROFIT LIMITATION.
The need for some form of profit limitation in wartime is generally recognized. Spending on an economy geared to peacetime production is such that excessive profits must inevitably arise at many points. The conversion of a peacetime economy into a wartime economy not only creates new scarcities, but it also requires businessmen to produce goods, which they have never produced before. Under these Circumstances costs cannot be accurately estimated and profits may prove to be excessive. Furthermore, higher prices may be needed to encourage production by marginal producers, thereby giving windfalls with aspect to output previously produced. On the other hand, it is the duty of the government to see that a few do not profit from the sacrifices of the many. Profits have a positive contribution to make even in a wartime economy. Profits have a positive contribution to make even in a wartime economy. In most sectors of the economy, the normal peacetime role played by profits in determining what and how much will be produced has been taken over by the government. But the profit motive still has an important part to play within this framework by providing incentives to control waste and inefficiency and to keep production costs from rising. The profit motive is not, of course, the only factor contributing to these ends, but its importance should not be underestimated.
- DOI
- 10.2308/tar-7038822
- Volume
- 18 (2)
- Pages
- 103-110
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref