But they can reinvest 'profits' today, for free, by running internal R&D programs, acquisitions, sponsoring a charity and investing in its staff, all of which are deducted from revenue as costs of running-a-company before calculation of taxable profit. Look at Amazon as a famous example which grew enormously year-on-year by reinvesting and thus generating zero profit.
'Profit' is primarily a signalling mechanism to indicate to the market as a whole, and potential investors in particular, that a company is 'successful'; it has so much revenue and such low costs that it can't find a way to spend the money . But it's basically a waste as that money could be achieving something for the company or its staff. Thus Governments punish companies by taking a slice of that profit as a way of saying 'if you don't use the money productively, we will'.
Which is a very generous form of taxation compared that to personal income taxation, which comes out of gross revenue before the costs of being-a-person have been met.
A use tax is basically sales tax, and the problem with them is they are regressive by nature (people with less income spend proportionally more of it on taxable goods).
This is basically Gary Johnson's "Fair Tax" proposal, and it ultimately hurts the poor and allows the millionaires to pay less.
'Profit' is primarily a signalling mechanism to indicate to the market as a whole, and potential investors in particular, that a company is 'successful'; it has so much revenue and such low costs that it can't find a way to spend the money . But it's basically a waste as that money could be achieving something for the company or its staff. Thus Governments punish companies by taking a slice of that profit as a way of saying 'if you don't use the money productively, we will'.
Which is a very generous form of taxation compared that to personal income taxation, which comes out of gross revenue before the costs of being-a-person have been met.