Profits Cure Disease

Written By: Tim Nerenz  |  Posted: Tuesday, April 27th, 2010

If you were told you have cancer, would you want Congress to: a) eliminate taxes on companies developing a cure, or b) eliminate their profits?
That strips the great debate right down to the nubs, now, doesn't it? Are you a free market capitalist or a state socialist?
Choose now, because once you are diagnosed with a potentially fatal disease it will be way too late to change your mind. As for me, I'm betting on "Team Profit".
Because the sure cure for cancer is not going to be discovered; it does not exist. It must be created through someone's hard work; and it will be the rightful property of those people who develop it. They, not society, will own it.
The opportunity to profit from what you own is what makes people work harder, smarter, and most importantly when it comes to cancer cures, faster. Taxing those profits diminish the incentives to work hard, smart, and fast.
In a free market, whoever gets there first with the sure cure for cancer will become wealthy beyond comprehension - and well-earned would be an understatement. But when that happens, the state socialists will start whining about the income gap.
So here is question two - are you better off with: a) an income gap and your cancer cured, or b) pay equity and early death? Welcome, defectors from "Team Tax".
Now at first, only rich people will be able to afford the sure cure for cancer. It will be just like cell phones and microwaves and hip replacements, where rich people will use their money and influence to be first in line.
At that point, the state socialists will be going berserk - outraged that only the rich are getting cured while the poor continue to die. They will demand that we tax the rich to even the playing field, and put a new "windfall profit" tax on the cancer cure providers.
If the world were a caring contest, that would be a good idea; but the world is a paying contest, so it's a stupid one.
The high profits from selling the first units of the cure to the rich provide the investment capital needed to expand production and lower unit costs, making the cure for cancer available to less-wealthy people. If you tax those profits, there is no money to reinvest and the cure will be only for the rich forever.
Question three - how do you get more money out of rich people: a) giving them a cure for their cancer in return, or b) increasing their marginal tax rate? "Team Tax" is now losing members.
The profit/investment/cost reduction cycle repeats and accelerates, so very soon the sure cure for cancer will be accessible to even the poorest members of our society. The fun will really begin when Wal-mart starts selling it - poor people will be doing cartwheels into the stores, while the millionaire talking heads on MSNBC will still be whining about the greeters not getting benefits.
Risk and reward, profit and loss, producing things people want at prices they can afford - this is how free market capitalism works; more importantly why capitalism works.
Profits, not taxes, will bring the sure cure for cancer to the whole of society, along with all the other products and services that improve living standards for everyone. If we want to raise living standards, it is foolish to tax profits.
If you "Team Tax" people would rather see people die than see someone make more money than you, then please do not lecture me about morality. If you hate profits, then you hate poor people, and it's about time somebody called you out.
In our tax-and-grant, government-run medical research industry, the only guys making a profit are the folks selling those lapel ribbons we have been wearing for the past 30 years for all the diseases that the all the non-profits haven't cured yet. It is taboo to criticize non-profits because they Care for a living, while we are just amateurs at it. Yeah, well.
Personally, I would rather cure a disease than show everyone how much I care by wearing a ribbon. That is why I am a free market capitalist; that is why I am a Libertarian. That's why you should be, too. Now, before you contract a fatal disease.
Submitted by Todd Welch.
Tim Nerenz is an international businessman, Libertarian writer and speaker, published academic, and former LP candidate for U.S. House of Representatives from Wisconsin.