Of these the most useful
consists unquestionably in its power of taxation. It can constitute a
system of taxation, in respect to the semi-monopolistic corporations,
which would deprive them of the fruits of an excessively large margin
between the cost of production and the price at which the product or
service could be increasingly sold. Net profits could be taxed at a rate
which was graduated to the percentage paid; and beyond a certain point
the tax should amount to much the larger fraction of the profits. In
this way a semi-monopolistic corporation would not have any interest in
seeking profits beyond a certain percentage. A condition would be
established which, while it would not deprive the managers of a
corporation of full responsibility for the conduct of its business,
would give them an additional inducement always to work for the
permanent improvement of the economic relation of the corporation to the
community. They would have no interest in preferring large but insecure
net earnings to smaller ones, founded on a thoroughly satisfactory
service, a low schedule of prices, and the constantly increasing
efficiency of the plant and organization of the company.
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