Profit is always ethical –- theft is always bad (though it may be good to steal from a thief, but only if you know you are stealing from a thief, and you do so to give it back to those who had their money stolen from them –- this is the story of Robin Hood, who stole from the government, from Prince John, who was taxing everyone too much, to return the money to the poor). Theft is taking something from someone else by force. Thus, taxation is theft –- so long as the government arrests people for not paying taxes. The line in the tax code that states that the income tax is based on the “voluntary compliance” of the citizenry should either be taken seriously or stricken from the code. I would prefer the first idea. Leaving it in there is insulting to every taxpayer.
People who mistake profit for theft are thieves themselves. They cannot tell the difference between good and bad. So, what is profit? The gain from any transaction. Any gain resulting in mental, physical, or spiritual betterment. From the Latin prefectus, an advance, from pre-, forward, and facere, to make. Thus, profit makes us advance. Profit is growth –- it is life. Thus, those who make the most profits are doing the most good for the world.
Thus, we need to stop taxing profits, including capital gains, as this actually punishes profit-making, and thus punishes good. All income taxes should be abolished, stricken from the Constitution, and (If we must have a tax) replaced with a very small federal sales tax. If the purpose of taxation is to generate revenues, this will generate the most revenues without punishing people for doing well. It is likely to generate the most revenues overall of any form of taxation, and will do so while allowing for increased economic growth, once making money is no longer punished. And it has the added bonus, for those who hate profits and thus want the rich to pay more in taxes, that the wealthy will pay more in taxes, since they in fact spend more money. Further, there’s no non-compliance for the regular taxpayer. The way sales taxes are paid, the tax payer isn’t threatened to pay it; it’s built into the prices. But if you do decide to support such an idea, please note that it is important that we rid ourselves of the income tax first, and do so in such a way that it cannot legally return –- otherwise, we will be in danger of burdening everyone with both kinds of taxes.